VP Debate, OpenAI Financial Churn, and Guest Mike Maples Jr.

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Scott and back in San Francisco. Samor. I'm here to... Well, it's not a mayoral debate. We're doing something different. We're going to be interviewing me and the person from ABC and someone from the San Francisco standard. They're going to be interviewing the four of the mayoral candidates. There's four mayoral candidates in San Francisco, all quite different. And I'll be interviewing them each of them today, one after the other.

I changed the format a little bit, or we changed it because debates they just performative. So these are real in-depth interviews with each of them with us asking them tough questions. I think it'll be substantive. And generally, the San Francisco mayoral race, the candidate's range from crazy to bachelors crazy. No, as always, thank you Fox News. Even hanging around with Jess Tarlov too much.

Oh my God. No, they are not actually. Daniel Lurie is a center, so to say. He's a... He ran a homeless organization for a long time, a very famous one. Mark Farrell is very considered very pro business. London breed has obviously been mayor for six years. So it should be... Who is Ron Conway supporting? I don't know, actually. Although I just texted him the other day about... He's a national politics now, Scott. He's moved on to national... He's big time.

I love you, but I have to say. Who are the tech pros planning to recall before they've even been real active? Oh, I just said, you know, they've gone, so we don't have to listen to them. Actually, the city is seeing a mini boom with AI. And so things have turned around a lot more than you realize. I think you've been... You're listening to Elon's Rance and Fox News a little too much these days. Is that what you think?

I don't know. I just just like... You don't assume you haven't been here. So you must... There's a lot of big issues. And San Francisco has always been a leader in innovation and everything else. So it's a boom and bust cycle for this city. So we'll see where it goes next. And AI is definitely giving it a shot in the arm in terms of stuff.

But still suffers fentanyl crisis, homeless crisis. But the new Supreme Court law has helped it a lot to help clean out those those encampments just like every city. And you... You're always a bit of a booster. Do you see a notable... Notable uptick in the lifestyle in San Francisco? I do. I do. Since the pandemic, I think San Francisco gets everything in the extreme. And then it solves everything in the extreme if that makes sense.

You know, every city is suffering from these issues. You know, however well they covered up whether it's a blue city or a red city. Every major city has to deal with the commercial real estate crisis with drug issues, etc. etc. So, you know, mental health crisis as you talk about a lot. So I think it's just a... It's a different kind of city. And that's why it's born so many amazing entrepreneurs and people.

And I think if you had to pick a city who's given the most to business, San Francisco would be one of them. Or the San Francisco Bay Area would be the top one. It would be the top one. Not even... No other city comes close except New York. And that's with finance and stuff like that. So, I don't know. San Francisco any day of the week, given how much it's contributed to your life. Yeah, you're a fantastic advocate for it.

Well, I just think it's contributed to our country in ways that other... Like, I'm sorry, but what is much of the south, all the big cities there, not compared to San Francisco, not compared to New York, even Boston, maybe Dallas and the fossil fuel industry, I guess, would be... Or the car industry? Oh, I don't know. The fastest growing cities in the nation are in the south. I don't like to defend the south. But yeah, yeah.

Look, they're all... There's some amazing cities in the United States, including San Francisco, which has... Your right has been the epicenter of the part of the economy globally that has grown faster than any other part of the economy. Yeah. It just overall... You're going to rank them over 100 years. You're going to have to give it to California, just well, in our country at least. And so that's all I'm saying.

Oh, California is the fifth largest country in the world by its economic output. And it always... I mean, I grew up in California. And they've provided me... I still... Although I don't spend much time there. Until I sold my original scripted trumpet in Netflix, respond in the room, Cara. Or I can go to the barely-also-tell and hang out of the pole lounge.

I'll be there starting Friday for you. Oh, no. Oh, no. Anyway, I like being here, I'm also interviewing Yvall Harari, who wrote, say, Piancy is a new book out called Nexus about AI. And then I'm going to the Berkeley Haas School to talk to the students there, because I like the music. Are you going to the Haas School? I am. Wow.

Anyway, exciting week for Cara's wisher. Anyway, we've got a lot to get to today. There's a lot going on, including Tim Walls and JD Vance facing off on the debate stage. And obviously, OpenAI, which has been the big bright spot in San Francisco in California. But it's got a lot of financial churn going on. This has cost a lot to become the most famous tech company in the world.

Plus, our friend of pivot is Mike Mapels, Jr. co-founder of the VC from Floodgate. I've known him for a long time. He was an early investor in Twitter, Twitch, Lyft. Really smart guy. He's got a new book, Pattern Breakers. Why some startups change the future. And actually, be a good person to ask about OpenAI about. He's a very thoughtful VC, which is a very low bar, but, but he really is. So you'll be interesting discussion.

First, Scott, did you watch SNL? Jean Smart hosted the season 50. Can you believe it? Premiere, which featured Maya Rudolph playing Kamala. Andy Sandberg is Doug M. Hoff, Jim Gaffigan and Tim Walls. And let's listen to a clip. I got to be honest here, folks. When Kamala Harris called me and asked me to be her vice president, I said, uh, yeah! This is personal for me. I love this country. And as a former teacher, I need the money. This suit is from Costco. It's a Kirkland brand.

They made great dog food. Thank you, Tim. As for the Republican side, Bowen Yang played JD Manchus. I thought it was brilliant. Let's listen. Anyway, hello, hello. It is I, JD Manchus. How much do we love Donald Trump? You're just a saffron. You told me, JD, you're like a son to me, because I don't like you. And I'm stuck with you.

So did you like it? Do you want to? You know what? Actually, I'm a best said. I didn't see it at my boys' room. So it was all football all weekend. What did you think of it? I thought it was great. I thought, you know, Maya, I was, I don't know if this show overall was the best one they've ever done. But I thought Samberg as Doug M. Hoff was really actually very good. And, and Maya Rudolph playing Kamala. She's got everyone of her kids. She's very good.

She was really good. Drama, drama, drama, drama, pajama, you know, it was everything with her name. It was, you know, we were expecting it and it delivered. I thought it was quite good. We'll see, you know, we'll see how the election goes. But if Kamala Harris wins, she'll have a job for a while. And the guy who plays talent, Trump, I'm blanking on his name. He was quite good.

But he was more poignant than Trump has been recently. A lot of Trump's recent speeches have really gone off the rails in these word salads, but forgetting words and stuff. I think we need to start talking about his cognitive difficulties very clearly. But we'll get to that in a minute. California governor Gavin Newsom speaking of California's vetoed an AI bill designed to provide safety regulations against

AI misuse. The bill had divided the tech industry with opposition from open AI meta and Google but support for manthropic and Elon Musk. Very strange. But, folks Newsom said he'd not believe the bill was the best approach to protecting the public but is working with AI leader to Dr. Fafi leader to develop responsible guardrails state senator Scott Wiener who we had on the show who got co-author bill called the move a missed opportunity for California to lead.

And lots of people had issues with how broad the bill was and I have to say it definitely you could drive a truck through some of the you know how to keep people safe and legal issues. I do like the California's as usual is on the cutting edge of the legislation around tech. But what do you think? Well, it was vetoed right.

Yeah. I mean, what's what's just as interesting here is who was for the legislation and at the topic, which is a kind of distant number two or three and Elon Musk were in favor of the legislation. And as I understand and read the legislation, there was a component in there that saying that would only apply to companies that spent more than $100 million.

And I saw the simply as the slow down open AI bill because and I find that I think we need a progressive tax structure, but I'm not sure we should have progressive regulation. And that is I'm not sure that small AI companies pose less of a threat. And so that was a very existential they do pose less of a threat in terms of income inequality. But I immediately when I saw Elon Musk who claims that Washington should just get out of the way.

Backing this bill and then the number to backing it became clear to me that and then when I read the fine print that this was basically trying to kneecap the leader of the AI. of regulation. In addition to that, Cara, I just did some quick analysis here. So in video and open AI, let's just talk about Nvidia and AI in California as you were talking about San Francisco and how the state's economic boom, I mean, just the amount of value they

added the economy. So Jensen Huang is now worth about $105 billion. He's worth more than Intel or Boeing just in personally. So Potomac Gavin Newsom wakes up in a cold sweat every night, imagining a phone call from Jensen Huang saying, Governor Newsom, I'm moving to Austin. So I mean, you want to talk about the most valuable constituent right now in California is I think the governor has to be very sensitive to ensuring that California maintain its

alchemy of innovation. I think he was smart to veto this and we need America has, I mean, we constantly talk about the need for more regulation. And I think I think that's absolutely true. But if you're going to have regulation, it needs to be systemic across all AI. What are your thoughts, Cara? I think it should be a federal bill. Again, I like the California

does lead in lots of ways, but this one was, I think it was overly broad. I think a lot of people were mad that he pushed that Scott, who I think is a really interesting legislator, pushed it forward so quickly and didn't sort of wait a second. And with Gavin bringing in Fei-Fei Lee and some names, I think that's saying we want to do this, but we want to do it in a way. He is definitely squeezed between business interests like Open AI and

the excitement around an open AI or an Nvidia and others. And there are a lot of people who live in, like I was saying, Ron Conway is one of them, trying to really get the California moment back, which happens over and over again. Like this is not a new fresh thing for California. By the way, I didn't even mention the film industry in California too. Like Hollywood. Like just, I think it's really difficult to try to, because they of course have issues

around AI and AI usage too. I think it has to be, California should be the leader in this legislation because of, like, got Hollywood they've got, or most of the, most of the Hollywood companies are located here, immediate companies in that regard. And we've got the biggest companies, Google, Open AI, Meta and Nvidia, to say nothing of all the others, Netflix and things like that. And so I think it probably was wildly broad, I think, in terms of being

able to be sued or other, or required. It was too, it was unspecific in the interests of a good thing, right? It was the interest of safety in AI. So that is the good thing. It's a question of how you do it. And there's going to be, you know, I know a lot of people like, oh, the corporate interest one here, I'm like, the corporate just should have a little bit of a say here too, right? Even though they may have too much of a say in many ways.

So I think there'll be another bill. I think that, and I think California will continue to, it's not going to be Louisiana for, for f**kishar. It's not going to be any of those states. So it's got to be California. And then ultimately has to be a federal bill. And we'll see if Commonwealth Harris wins, there certainly will be a safety bill. If she has control of anything, that will be probably top of mind for her in terms of creating innovation

in this country. Anyway, but speaking of another stock that's not so good is the co-founders of Trump media are dumping their stock in a company that companies co-founding firm United Atlantic Ventures. So most of its stake after the end of the lock up agreement and stop large investors from selling shares. Former President Trump has insistity. We will not be selling it in his shares. I bet he is in the back. I just feel like there's

a backroom deal here. This year he has seen a stake in the company drop from 6.2 billion to 1.6 billion. And that's 1.6 billion to high. You know, this idea of sticking to his word to keeps true social floating. I think there must have been a side. I just feel like he somehow is going to benefit no matter what in some backward way, like selling his watches instead of campaign donations or whatever. Right. It's just, it's always a script of some

way to get money into his pocket. So yeah, it's become it's become a tracking stock for the likelihood he's reelected and he figures out a way which he likely would give in the clip to accuracy that the American voter would probably be endorsing to a certain extent if he's reelected to prop it up and get his investors their money back. But I think it's off about 75% in the last couple months. It has a, it's had a bit of a bump in the

last few days actually. It's up about 20, 25%. It's just become a tracking stock for whether people believe he'll be reelected or not. It's definitely strange when uncharted territory here. I don't know other than to say, I mean, let's just talk about a little bit on the company. It's it's effectively, it's not a company, right? It's just it makes no money. It's user growth is flat and it's smaller than our podcast. But go ahead. I think that's

right. It is. No, it's right. I check it all the time. Yeah. So it's not, but it's become sort of a vessel. It's sort of the ultimate. It's sort of the ultimate meme stock. The firm reported 836,000 revenue last quarter, a 30% drop year on year. So it's actually declining. I don't know how many social media companies are seeing their revenues decline and a net loss of over 16 million. So it loses, it loses basically 18 bucks for every dollar it takes

in and it trades at 488 times. I mean, it's just not it's not a company. It's it's it's almost like a shit coin where they say, okay, there's nothing here, but you can speculate on it. And did I ever say I was offered a shit coin when these companies have been clients as we're going to do a project. It'll cost 10 million. It'll be the profit. She coin. It'll be something about access to learning or technology. We think it'll go out at a market

cap of two to 300 million. You'll make 30 to 50 million. We'll make 30 to 50 million. And I'm like, and then what what happens? And they're like, well, most of these companies come under selling pressures, I said, and I'm like, so basically we dumped a bag. That's what you're saying. And this was happening everywhere in 21 and 22. Yeah. It's scams. It's called a scam. It should be zero dollars. This is just a piece of shit. I mean, if

he loses, if he loses, it'll go down to less than one. If he wins, I wouldn't be surprised. Yeah. I guess what's really interesting caras, I can tell you based on how the stock trades in the pre market on Wednesday, I will be able to tell you who according to the public, one or lost the VP debate. Oh, all right. Okay. All right. Although that sometimes doesn't matter. Okay. Speaking of which, let's get to our first big story.

Senator JD Vance and Governor Tim Walls are set to face off Tuesday in the first and only vice presidential debate of this election cycle. The 90 minute debate will be moderated by CBS's Nora O'Donnell and Margaret Brennan. What a team. I think that they're both really fantastic. They're not fact checking. This is interesting. The candidates, my friends, will not be muted. Those CBS says it's reserved the right to change course, if need be.

Vice president debates historically don't have a big impact on elections. I think that people will watch this. I'll be interviewing you all, Harari, at the time. Talk about, they're not. I thought with David Muradid, an ABC was perfect fact checking, lightly fact checking. Again, nobody didn't. He fact checked. They're going to have them fact check each other, which I really don't like. It confuses voters, I think. But I don't love that in decision,

but they don't want to be dragged into a political fight, I guess. But what does Walls need to do and what does Vance need to do? These are all performative anyway. Yeah, look, everyone's

going to say it's more important. The only thing we know in Jess Tarlau said this, and the only thing we know is that both sides will claim victory and everyone, all of the median everyone will say that it was more important for the Harris campaign for some reason, that what happened here, that it just seems even though it are tied, it seems like everything she does is more important because we've become numb or their campaign has managed normalize

this strange behavior you would never see from anyone else. So there's no mistake that's out of bounds. It's like, okay, and I'm sure you would correctly kind of equate this and I think you'd be right to women's behavior. There's just less room for error here on the part of the woman running for president, whereas the other person, it's a sort of well, you know, well, he's got, you know, Trump's going to be Trump. He's like, I think I think JD Vance, if you've read Hillbilly

allergy, I think that guy's brilliant. I really do. I do not. There is something very strange and very dark about his views on the intersection between government and economics and women's rights. His view of women is just very, very, very, yeah, okay. Yeah, there's something. There's just

no other way. There's just no other way. Like something happened and he really does, you know, whether he's describing childless cat ladies who hate themselves and hate their lives, we're talking about the rights of the unborn, which seems to be basically saying women are vessels for birth and really lose all rights. It's all very, it feels very strange. Having said that, I bet he's going to be an outstanding debater. I think he's very smart. And walls, this is, well,

my prediction is of following. If you watch the debate, I think it's going to be reminiscent of Carter Reagan in 1980. If you watch the debate, you're going to think that walls one because he's more likeable and comes across, this is like a dad who when his kids friends leave the house, he says, shit like, watch out for deer and text me when you get home or when a check comes, he's the kind of guy that says to the waitress, what's the damage? He's just so likeable, right? And I think

Vance is not likeable. I bet the people who listen to it, more of them will give it to Vance, because I do think if he stays disciplined and on topic, I think he's a very bright person. And I think he's actually probably a pretty good debater. What's your projection? We went to Yale Law School, speaking of elites. Yes, he went to Yale Law School. I think he is so profoundly unlikable. He's not going to win no matter what he does. First of all, he's creepy.

He's, he doesn't like women. It's so clear. He hates them. It's weird. And I think the numbers are so clear. People really don't like him that this, like Wallace has a positive rating. Vance has the historically lowest rating. He's a creepy guy. I think he'll be insulting. And I think he's got to explain why he wants to tax people without children more than people with children and make them pay and be punished. Something happened to this guy

sometime in his life. And it's, and I'm sorry for for child JD Vance, but adult JD Nance needs to get therapy. Anyway, also on the ticket, speaking of heinous behavior, Donald Trump's latest attack line is calling Kamala Harris mentally impaired. It's a heinous insult. Even Republicans couldn't take it. It's just bizarre. He also called for a violent day of at least retaliation to end crime in America at a rally. One violent day will take care of crime. It's like one dictator for a day.

I think he's, if you watch any of his speeches, something's gone wrong in this guy's head. Very significantly. Even from the last month or so. And using terms like this is sort of him unhinged, I guess, even though, and I don't think we should grade him differently. Calling someone mentally impaired is insulting to people who have mental impairments. It also is sexist. It's also weird. And a lot of what's he saying is weird. I find it really disturbing,

actually. Biology's ages. Two-thirds of people over the age of seven, he has some sort of cognitive impairment. It's just part of aging. And I think you're starting to see signs of that from him. And, you know, vice president Harris, like or a dislikeer, doesn't show the, that type of behavior. I have noticed it. And I'm trying to start. I'm trying to separate myself from my bias. I do think he's become more meandering and wandering. And his,

he used to go on, you know, these kind of digressions or tangents all the time. And now they're just sort of inco, they're a little bit incoherent. But you know what, Cara? I don't think, I don't think his base cares. I don't know if they care or not. But I definitely think it's incredibly repellent. And I think it's harder to hide what is going on. You know, just the way we were tough on Biden, this guy is losing his marbles in a way. He was always a nasty prick. But now he's a craziness.

I mean, he's like a mentally speaking of mentally impaired. I think he needs to get tracked by a doctor. He's the meal ticket for so many people. It'll be difficult. Anyway, Harris also appears to be taking her advice, speaking of fact, she's brilliant because she's showing some openness to her crypto. She said it's important for the U.S. to maintain dominance and blockchain technology in a major economic speech last week. Recent policy documents also say Harris would encourage

innovative technologies like AI and digital assets. You know, I think she had to throw a bone to the crypto folks because they're putting all kinds of money. And there's little war between all the crypto folks, ones that sort of want this more regulated crypto so that they do really well in this sort of wild west crypto bros. You suggested she outlined a couple basic policy measures supporting

crypto and she did. So what do you think about that? She's triangulating. She's just trying to take away. She's trying to remove cudgles and crypto is we talked about this a few episodes ago. There's so few places where there's undecided voters where I think people upper grabs. I actually think one of them is young men. The Latino votes really interesting. The Latino vote is totally moved away from Democrats. It used to be Democrats were up by like 40. I mean, they just used to own

the Latino vote. And now it's not a toss up, but it's been dramatically shifted. And I think it's really, I think it's a lot of it. It's too is that we should almost do away with the term Latino in the sense that I got a bunch of deserved shit from people. When I said I was taking my son to Africa for some charity work to like, well, where in Africa boss? I mean, that's just a dumb thing to say. And Latino voters, I mean, talk about conservative Cubans in Florida. They have a much

different viewpoint than, you know, undocumented workers or they can't vote. But recent citizens who had immigrated from parts of Central America. I mean, they're just it's very hard to start labeling and drawing conclusions from a group of people that you just label as Latino. Yeah, I would agree. It's a wide ranging. They contain multitudes. You don't do that to white people for sure. And they're very different kinds of white people everywhere. But what's amazing about it. And

some ways they're more heterogeneous and more disparate than say white males. Yeah. They're in what's kind of inspiring about it. If you think about it, is they're just becoming quite frankly. They're becoming more American. They're identifying with certain components of our country. And others are identifying with other components of our country. I see it as the Latino community or that community is just becoming American. They're just attaching their rights and the different

things that work for them or don't work for them. Yeah, absolutely. Finally, very quickly, a familiar face we cover in the election. One that you like. I know you do. Amazon is in late stage talks with former NBC and MSNBC. Williams. I know you do. To host a live election night special at Amazon Prime Video. And then you know, and if you don't like his take, you can buy another one. That's the big joke. What do you think they're getting in the live news game? Like Netflix and

Amazon has stayed away from it. They have all stayed away. Like every time you Netflix is in the news business, I've heard that from the Netflix executive to a million times. And same thing from all these the Amazon's, the Googles, we're not in the news business. We don't want to be in the news business. But now they kind of want to be in the news business. What do you think? Well, first I just want to for a moment, backtrack to what's the name David Mure the guy to the

ABC. Handsome. The ABC debates. But he posted, he did, they did a, I posted a clip on threads of one, you know, they have those feel good shows at the end where they're like, okay, we just said 27 minutes of how fucked up the world is. We're going to talk about a dog, you know, marching across the nation to find his owner. And but they had the loveliest episode about this young couple, we planted a tree and they take a picture in front of it. It was just, did you see that? I love

that story. It was so lovely. Yeah. And it was on ABC news tonight. He was just sitting there. 80% of my comments or 80% of Amazon thread with this guy has no credibility. This guy is the worst journalist in the world. And I thought to myself, how many of these are bots just trying to undermine the credibility of ABC because they, they had the willingness to fact check. I know, I went back and I thought, did they not fact check her? Well, they, it's not that they didn't fact check her.

They didn't quite frankly press her sometimes. And they said, you didn't answer the question, madam vice president. That's because he was a font of lies. It was like 33 to one. But go ahead, that's different. I think anyways, I thought what I'm saying is, and I think you agree, is I just, it seems to me, anyways, I don't know him, but he's so handsome. I empathized with him in a weird way. Brian Williams or David Meer, they're both. Yes. Yes. But going back to Amazon,

yeah, they're smart. They want to get into the live. They wanted to get into sports. They want to get in big events that night. They might get me more people have Amazon prime than ever. Christmas tree of pet go to church on a gun. That's, that is our essentially our common bond or our thread are connected to issue. And Brian Williams is so perfect. I just can't wait for the first like, that's like getting a mooster drive convertible. And you're like, I just like, I don't know what that

means. But it's, I like, I get it sort of. I love Brian Williams. I just, I know, I know we got in trouble for the helicopter thing, but I'm going to forgive him. Forgive him. That was today's age. And today's age. So what? I know he looks like nothing. Are you kidding? Well, though, he shouldn't. He's not killing bears or like sending dick picks out or nobody likes. Glory that wasn't earned. Anyway, that's fine. He shouldn't have done it. But nonetheless, he would be great. I think

it's that's what he just said. I literally don't think it's a good thing. But it's that. And he doesn't age. You got to love a good looking guy who doesn't age. I have to give you a statue of limitations every week, essentially. But I think I'd never say anything offensive. You know, you know why they don't wear many scripts in San Francisco? Oh, no. Okay. Because it would show their balls. Oh, that was wrong. That was wrong. That was wrong. By the way, the Folsom

Street Fair was here here yesterday. And it was there's a lot of balls showing. Nonetheless, it's very dicey to get into news, I think. So I think it'll be an interesting thing. But I think if anyone can do it, Brian Williams is a great choice. All right, Scott, let's go on a quick break. We come back open AIs financial wins and losses and we'll speak to friend of pivot Mike Maple's junior about spotting a successful start. They're not writers, but they help their client shape

their businesses financial stories. They're not an airline, but their network connects global businesses in nearly 180 local markets. They're not detectives, but they work across businesses to uncover new financial opportunities for their clients. They're not just any bank. They are city. Learn more at city.com slash we are city at cit i ti.com slash we are city. Support for pivot comes from Miro. You're wrapping up one project and looking ahead to the next.

Congratulations. At this point, it's normal for most teens to take a moment to regain your bearings and sort through the successes and failures that popped up. But unfortunately, these retrospective meetings can get tedious, especially to end up discussing the same pain points over and over. Well, you can revitalize your next retro with Miro. Miro is a visual collaboration platform that helps you run an effective engaging and actionable

retrospective. It helps you make sure your team members' voices are heard. It's got helpful features like templates and icebreakers that let your team share issues, express ideas, and solve problems together. There's also a private mode where people can anonymously add notes or vote. Miro also has AI enabled tools that you save a ton of time summarizing notes. All in all, Miro lets you innovate faster and feel stronger as a team. Whether you work in product design,

engineering, UX, agile, or marketing, bring your team together on Miro. Your first three Miro boards are free when you sign up today at Miro.com. That's three free boards at m-i-r-o.com. Support for the show comes from Zell, which Caruswisher uses all the time. There are a lot of scams out there that are very obvious like a text you might get from an unknown number that has more

spelling errors than words. There are a lot that aren't so obvious, and you might be surprised at how sophisticated the inner workings of a scam can be, so it's more important than ever to stay vigilant. Don't open links sent by unknown numbers. Only send money to people you know and trust and educate yourself on how to spot the signs of a scam. Learn more at zellpay.com-safety. Scott, we're back. We're learning more about OpenAI's current financial situation as the

major funding round comes to a close. The New York Times reviewed some of OpenAI's financial documents that reported the company expects around 3.7 billion dollar annual sales this year. Very impressive. But OpenAI also expects to lose roughly $5 billion due to operating costs and other expenses like salaries and office rent, etc. And compute, obviously. Should investors be concerned, I mean, interested to know what you say here about how much money OpenAI is spending.

Obviously, you got to spend money to make money, that kind of thing. But main revenue sources are sales of its services to companies, chatbots, subscriptions. OpenAI will predict its revenue will yield $100 billion in 2029. That's a lot more, which will roughly match the current annual sales of Nestle's or Target. That's a really big revenue leap. Talk about costs in line with the new

funding, theoretical profits, etc. What do you think of that? I think this has all the makings of a company that's going to become one of the 10 most valuable companies in the world. The fact that they're losing this kind of money, this isn't out of line for companies that grow this fast or this kind of line comes to mind. More Netflix. They're expecting about 3.7 billion in sales. They think next year, and they probably already have pretty good,

they probably ask chat GPT what the revenues would be next year. But they're going to do $11.6 billion next year. And the losses here are not extraordinary. They can absolutely find this money. I wouldn't be surprised if they increased the spend and increased their losses because you've probably seen that graph, but it shows the adoption, the seminal technologies that really resonate with it, it's radio or the facts or the telephone or mobile. It's kind of zero to mass adoption, keeps

getting the cycle time, keeps decreasing. And also, what you have is what I call fast as zero to monopoly time. And I think just as you have this wind-tell monopoly, I think what we have emerging already is what I'll call the open video monopoly or do-oply. Open AI has something like a 70 plus percent share of what is supposed to be an emerging market. This is like Google in the early days. I agree. I think I people are making it. It's a lot of money, but it's cost a lot

of money. And if they don't, they will get run over. It's the best value in AI right now. Look at there, I mean, for it, there are four 25 revenues are going to be, if they're in fact going to be about $12 billion. That means they're raising money at 12 times revenues. The average SaaS company trades at six times. And then if you look at any of these other guys, they're trading at 50 to one. Right now, open AI is the best value. And let me be clear, I think the whole space is overvalued.

But I'm sort of, I don't know, say I'm a convert, but I am using this thing. I upload board decks now and say, pretend you're an aggressive VC. What questions would you have for me when, you know, we're out. I'm talking about, I upload our, our download numbers. And I say, what components or what channels distribution channels should we be thinking about? What topics are we missing? And it gets it wrong a lot, but you always, it, it's just such a great thought

partner. Yeah, interesting. Apple was one of the big names participating in this open AI funding round. And they pulled out of those talks, according to the Wall Street Journal. I'm not sure. I didn't do any reporting. So I don't know why. Yeah, I have no idea there. But I don't understand why they would leak that they were even involved in it to begin with. I don't, I don't,

I don't know. I would imagine when Apple shows up, they expect a lot. I mean, Apple's like, the, the, you know, when the hot girl comes to dinner or the hot guy, whatever, they're just kind of expectant. I got to imagine Apple is a, we like X, Y and Z. And probably at some point, they said, no, we're not going to do that. I got to think Apple really expects and usually gets a lot from any terms they asked for in in in in. They don't quite have this company on its back

to do that, you know, I mean, to, to back foot. Anyway, Sam Altman is also denying the reports that he's getting a giant equity stake. I think it was 7% of the company last week, though Altman and opening a CFO, Sarah Friar, did note in a meeting that investor had raised concerns, Alman not having an equity stake. He makes money all kinds of ways. But what size equity stake do you think he should ultimately get it get open AI chair Brett Taylor told CMBC the

board had discussed the stake, but no decision in me. It's kind of have a stake. I think it's kind of silly and kind of performative that he didn't. It makes sense is his, his, his, his incentive should be in line with the companies. I don't, I don't know why that's weird. Well, so typically what you do is be careful, you ask for. So typically the person who sides are the group that decides, a CEO's compensation is the compensation committee. I've always found that the toughest part about

management and being on a board is compensation. And because you don't want to pay your people too little, you don't want to pay them too much. And CEO compensation has gone absolutely batchid crazy. It's gone from 30 or 40 times the average dollar's worker to over 300 times because what happens is basically you get weaponized as a board member. You like showing up and getting a free dinner and making a quarter to a half a million dollars a year. And typically the CEO was the fraternity or

sorority rush chairman. They're very likable over time. You get to like them. They're doing a great job. I think shareholder value or they're doing an okay job in the face of real challenges. They're very good at managing their board. They cherry pick people who will like them and do what they want. So generally speaking boards are kind of bought off. And they also don't want to do any work. So they

hire towers parent or a comp consultant to come in and help with compensation. And this is what the comp towers parent comes back. And it says, okay, a tech company that is doing 3.6 billion growing this fast. This is how much the median is zero is the lowest paid person in a similar company, similar industry 100 is the highest paid person. And they say right at the median this person should make X. But no one on the board says oh, Lisa's just an average person. They're like

let's pay them at 60 or 70%. The problem is is that when you pay people 1.2 times the average every year, they end up doubling their salary every 6 to 8 years and you end up with just out of control. CEO compensation. Anyways, having said that in a company like this typically, typically what you would find is that he or she would get options on somewhere between

4 and 6%. Now, given the extraordinary valuation of this company at 150 billion, they could go get an amazing CEO for 1%, but because he's been around so long, I think that they could justify saying this guy should have 4 to 6% of the company. 4 to 6. Well, interesting. Ice effects don't make a little less. Yeah, at least 3 for sure. You're right. He could be bumped up to chairman and get a stake, but he's got to have a stake. It's kind of ridiculous. He won't be chairman.

They like Brett Taylor. He's doing a good job. Yeah, they do. You're right. Yeah. Anyway, we'll say good luck Sam. You're paying for dinner next time. Neither of us are worried about this company, even including all the drama around it. I bet if you looked inside and thought that or Microsoft at any day of the week, there's all kind of always drama. This is just the company of the moment. I think that's why it's attracting. Also, Sam, as you said, they didn't kill the king

and therefore the king gets to decide. Anyway, let's bring in our friend of Pivot. Mike Maple's Jr. is the co-founder of the venture capital firm floodgate. He's written a new book, pattern breakers. Why some startups change the future? Let me say, I was just telling Scott a second ago, you're one of my favorite people to talk to because you're so smart. You always give me good insights. Although at the same time, with many VCs, it's a low bar.

I've always appreciated your insights. It was always different and unusual. Let's just get into it. Just for people who don't know you are an early investor, you've always been a very earlier investor in Twitter when it was ODO, Twitch, Lyft, and many others. We're going to talk about current companies too because we'd love your thoughts. We just discussed the OpenAI, funding, etc. recently. What exactly defines a founder or company as a pattern breaker? Why'd you call your

pattern breakers? Some books are written because people are smart. This one is written more out of feelings of anxiety. I'd noticed that over 80% of my exit profits had come from Pivot. Over and over again, I'd see these situations where Twitter, they can't decide who the CEO is, they've got the fail well, all kinds of drama, and they have great success. They weren't doing a

whole lot of best practices that I could discern. Then, company after company did all the right things, hired all the right people, had a higher performance culture, and then shut down because they didn't work. I thought maybe I was just a lucky fool and I should retire before I get exposed. To give you a sense how crazy it was, I didn't even say this in the book, but like Twitch, I didn't know I was a shareholder in Twitch. I had invested in Justin TV. That's what it was. It morphed into

companies, Twitch and Socialcam. Socialcam gets bought by Autodesk, so I just thought that was the company. Then one day, Twitch would make 84 times our money. I have to tell my LPs, hey, I'm really sorry about this, but we have this big windfall and I don't have it in my financials. Do I need to restate them? They're like, no, we're good. Just send us the money. I thought, okay, is it possible that I've just been lucky the whole time?

I couldn't explain the success with normal frameworks. I thought, okay, I need to figure out if there's something more worth understanding or I need to go find some new line of work before I, you know, look, what luck give if luck will take it the way to, you know, usually. Why pattern breaker? Meaning they do what? This is one of the reasons I'm interested in talking to you folks because I think both of you

have interesting takes on this, maybe pro-ancon, right? So what I came to believe is that the way startups win, startup capitalism is a different kind of capitalism. So most people, when they think of capitalism, they think of it as corporations. And corporations try to create competitive modes and they try to build economies of scale,

network effects, and brand, and supply chains. And you know, in many ways, when you invest in a normal company, you're betting on its ability to persistently compound more than most people think it will. But a startup, you start to realize, doesn't have anything to compound. And so startups create value in a different way than building modes. They create value by changing the subject. So startups lose, or at least minimize their upside when the future is going to be a

new and improved version of the present. Because then the startup has to compete by the rules of the incumbents. And businesses never a fair fight. The only question is who gets to fight unfair. And the default is that the incumbents will fight unfair because they have the advantage of the incumbent see. So what a pattern breaker does is they refuse the premise of the rules. And they show up with something radically different. And they show up with something that can't be reconciled with

anything that's come before. So you don't, they force a choice and not a comparison. They can't be true. That's a really good. So I'll give an example that's not even in the startup realm, but it would be a pattern breaking example of recent times, the Tesla cyber truck. Now you may like it. You may dislike it. When I saw it announced, I thought he might be joking. Like I was like, is he really going to ship that thing? But nobody, when they see a cyber truck,

ever says, well, so how does that compare to an F-150? So Elon kind of says, live in my future or don't, but you have to choose. So pattern breaker is the idea was that we tend to operate according to consistent patterns. And that's actually not a bad thing. That helped us avoid saber tooth tigers or helps us fit in socially and communities and stuff. But pattern, pattern matching creates a bias as well. It causes you to not not see other other opportunities. Yeah.

I would say the better comparison would be even though he was incumbent someone like Steve Jobs, actually, when he would take things off of the computer. And he's, he'd always say, like it or not, this is what I'm doing when he would take dongles off the side when he would do memory. He did a bunch of things like that. And he goes, well, either pick my choice or don't, but this is what I'm doing.

I agree with that. And to take that even a step further, right? Like Steve Jobs didn't think of the quote unquote market for smartphones, like it was a map that exists and you got to go find the treasure in the treasure map. What pattern breaking founders do is they propose a radically different future that can't be reconciled with the present. And then they teach the rest of us how to think about it. Right? So they don't like the problem with the notion of product market fit.

Is it it suggests that there is some market to go be discovered that exists in some objective tangible way. But but but sometimes the product creates the market. And so it's the pattern breaking founder with the pattern breaking idea that creates the new market and and and create something that that we didn't even know we wanted or didn't think could even exist before, right?

Nice to meet you Mike. It doesn't just all bubble up to what I think is somewhat conventional wisdom among early stage investors that it's you're really not investing in a concept or a company or investing in a team. And that team has the ability to recognize patterns and if and when necessary make a pivot and that you face the enemy. I mean, I I reduce everything to to war.

And the reason the Americans were so successful is that when we were more agile that when our the leader of a platoon got killed the the rank and file were just very good at adapting and figuring out a new strategy in the in the fog war and the heat of battle. Isn't that really what you're looking for as an investor? There's a little more to it than that. But but I'll be curious about kind of how this lands with you Scott because I know you've started companies before, right? So

you're not just playing a founder on TV, right? But like so what what I believe is that founders need to harness particular forces that enable them to change the subject, right? So like the lift founders were great founders, but they they harness two things they had an inflection, which was the iPhone 4s had a GPS locator chip. So an inflection is a new thing that happens in the world independent of startups. And most of us don't even know that they're around us all the time.

Most of us don't realize the thing in our pocket gives us a new form of empowerment. But but in the case of the iPhone 4s you could have you could have had the idea for rides sharing before that. But you wouldn't have been able to implement a system that embodied that idea until you could algorithmically locate everybody who wants to be a rider or driver. So the so that's the inflection. So the inflection is important because it lets the startup wage asymmetric warfare on the present.

So so the one question I asked founders that maybe not everybody asks is hey this sounds like a great idea. I'm excited about it. Like tell me some more. But before we even get there, could you explain to me what inflection this thing rides? You know what what is the external change event? And what is the specific form of empowerment that it offers and who does it empower and why now and only now can that empowerment be unleashed? And so a lot of the companies that I worked with,

that's why they pivoted successfully. They were they were they were riding an inflection that was important and profound. But their first product was a reference implementation of the inflection, right? And then they when they realize they weren't quite on target, they adjusted. And so then the other the other thing is the insight. And so I believe that a great startup has to not just be

right, but it has to be non consensus and right. And it goes back to pattern breaking. My view is that if if a customer has the option to buy from the incumbent, why would they buy from a startup? And so there has to be something about it that's radically different. And so though so I take your point founders matter a lot and that there's a whole other set of things about how do they act different, not just how they think different. But I do think that some ideas embody more power

than other ideas and that those powers can be understood. And that that why I care about this so much is that I don't care about failure in the conventional sense. I care about failure when the founder loses their time when there are three years into an idea that they don't believe in anymore or that they're you know, they're doing it out of obligation rather than passion because they pursued something with a caped upside without knowing it. Just a double click on that. I invest

a lot of small companies on nearly the scale or the success of floodgate. But I was I think of in a sort of a similar way what's the offshore storm? And that is I used to surf when I was a younger man. And whenever I go to Hawaii or Costa Rica with our gray waves, I'd convince myself I was a good surfer. And I realized, you know, waves are almost more important than the surfer. And I was think market dynamics will trump individual performance. And I would ask any company similar to what I

think you're saying, what's the offshore storm here? What's going to create waves that are coming such a you're just going to be an amazing surfer. And we're going to think you're a better CEO than you are because you knew what big waves were coming. I mean, like ziggin when you're zagging, I think the genius of some of these companies, Nvidia, does zagged. It said, we don't need factories. It's all about the IP. Netflix said the fastest, the best broadband in the world is something called

the United States Postal Service. We're going to start sending zeros and ones to the USPS. It's and they just saw these waves and they weren't afraid when everyone's barking up the same tree. They just weren't afraid to just go entirely the other way. And by the way, Scott, that's when it hit me. I was surfing. That's like so it inflection is a wave. I was like, you got to ride the right wave.

Okay. You're bringing up what you know in the book, the right amount and the this quote from you, the right amount of disagreeableness can be a founder's ally in developing breakthrough ideas. Now at the same time, it can lead to toxicity. You mentioned Elon. He was he was very disagreeable, it's morphed into toxicity now, right? In a way that's everything is disagreeable, right? Talk about that balance because I agree with you. I think I'm a disagreeable person. I think

it's one of the reason I'm successful because I disagree. No, but I go, I'm like, I want to do podcasts now 10 years ago. This is what I even though and a lot of people said no. I'm sorry, anything. Don't say. But we talk about this disagreeableness and when it becomes kind of, you know, I was right before and you'll see that I'm right again because it's not always the case for sure. Yeah, so I'm going to tread carefully on this question because I'm a little bit more positive

on Elon than you might be. Yes, I know that. So like the way I do. Is your VC looking for his next deal? Let me see out there with a fond open is critical of Elon. Okay, well, let me so I haven't invested his company. Anyways, but I'm sure you're fondness for him is genuine. So let me just let me just kind of describe. Like one of the things that I tried to do and and you know, their trade offs to it is I try to keep my tribal affiliation small.

So because like Elon contains multitudes and you know, like if you look at at NASA versus SpaceX to launch a kilogram, SpaceX can do it for a 20th of the price. And so I say, okay, I'm pretty interested in that, right? Like I like I'm glad that that part of him exists in the world. And then when I look at when I look at what he's done, you know, to enable Starlink over the Ukraine. And so there's like, there's things about him. I wouldn't do those things.

But but I try to I try to kind of separate, you know, the things that he does that are really positive and and not try to like paint him with one single negative or positive brush. I think that people are just complicated. And especially people who change the future. And so I'm I'm a little more more sympathetic to him than you might be. I mean, I understand your objections to him. But if if if complicated means having 12 kids and living with none of them and and humanizing

we get what I'm saying is like I'm not I'm not just a shill for Elon, right? I have an invested in his startups. I'm not like I'm not trying to say I'm not trying to be tribal about it. Right. I'm like you have a very calm attitude. Mark, Mark, Benioff has the same one. Here's the only thing I would say about the cutting prices. He was allowed to blow up rockets. NASA isn't like so he can be more disagreeable and risk taking. Then you know what I mean? It's

very easy to figure out the way to do it if you're allowed to blow things up. And so I think and by the way, I think that's good. I think we need more of that. Right. Like so, you know, but NASA can't. So attacking NASA. NASA actually can't blow things up. But I'm not attacking him. I'm just saying a pattern breaker changes the future. You're acknowledging the truth. He can put shit into space

for less money than anyone else. And I'm saying that all things being equal. I like it. So like the thing that Elon brings that I think we need in the you know, an ingredient in this recipe is he builds things, right? Like when he says he's going to blast rockets into outer space. He does. And when he says he's going to make an electric car work that's interesting and awesome. He does. And

you know, I got a lot of time for people like that in this society. Right. All right. Here's my Q. You strike me as infinitely likable and reasonable and balanced and separate the person from the politics. I'll all all other things that I think are important. Good lessons for younger people. I'm just curious when when I was in living in San Francisco in the 90s and raising money, there was this sort of the I called it the code of the white guy because all these sees at that

point and it's gotten better. But all these sees in the 90s were white men. And no matter how competitive they were, how much they may have disliked each other personally, they would never see anything negative about each other. It was very much a gentlemanly kind of clubhouse rules kind of environment. And some of the stuff I've seen out of EC's shitposting each other the last 12 months, it is so aggressive. And as someone who's quite frankly not not shy to be judgmental,

probably overly judgmental about people, some of it makes me blush. What why do you think it's happened in the last 24 months? And what what can you give us a sense for why you think it's sort of burst out under the open and whether you think it's bad for the venture community? Yeah. So and this goes back to I think I learned this from my dad a little bit growing up. So my dad was a pretty prominent executive at Microsoft back in the day. And he used to he used to

we used to talk a lot about just the dangers of tribalism. And and one of the things that we talked about a lot is how being too affiliated with a tribe makes you stupid. And so like like for example, like I'm an Oklahoma sooner fan growing up. And I just love the sooners right now I'll all shit talk about the sooners versus who their plan and stuff like that. Now fortunately the stakes don't matter. So it's just like me being a fan. But what I find is that people get that

way with their religion or with their politics. And I don't care which side of it you're on. I don't care if you're pro Trump or pro comular Harris. I see no limit to people's stupidity on both sides and how they're acting. And I think it's because they've let their tribalistic urges get the best of them. And so like I'm like interested in immigration. I'm happy to talk about it. But I won't talk about it by parodying somebody's talking points. Right. And if I get if I make

my political tribal identity too big, I'm just going to become blind. Nobody's going to listen to you. Nobody's going to listen to me. And I'm not going to listen to anybody else. Right. You're very sensible. I hate sensible people. Let me ask you. I'm going to switch you from this just for a minute. But there's so many AI startups now. We just talked about what was going on open AI. And we thought losing money all the Michigan's it doesn't matter. This is a world

changing company. Right. It's been doing astonishing things. Ultimately, it probably will settle itself out. But what would you get you to invest in one? And what are you interested in, especially considering all the competition now? There is a lot of open AI, Google, Microsoft, Anthropic, it goes on and on and on. Yeah. I haven't done a whole lot of AI investing. No. It's so we've had a couple of ones that have been good. So applied intuition is a company that helps with

autonomous vehicles and EVs. But it's enterprise software, really large contracts. And then I invested in a trip Adler's new company, the guy from Scribd. It's called created by created by humans. And it's trying to try to let creators create licensing deals with the LLM companies. Open AI is really not my kind of investment. I mean, I wish them very well, along with Anthropic and all these other guys. But my business is hard, but not complicated.

I'm wrong 85% of the time. Air BnB. Yeah. And when I'm right, I have to be spectacularly right. And so I'm really good. If 5% of my investments, I make 100x on the first check and another 10% or so I make more than 20x on the first check. I don't see a path to doing that investing in open AI right now or XAI or it's not a venture investment. You're a venture

investor. It's no longer a venture investor. Exactly. And by the way, a lot of people call themselves venture investors in today's world are unrecognizable to me for what I think it is. But that's up to them. I'm, you know, I'm not trying to comment on their strategies. I wouldn't expect them to have an opinion on mine or at least I'd rather say what my own is. So, so I don't know. I mean, I'm rooting for the company to succeed because I like their products

and I think they're doing interesting things. But I don't really think of it as an investment. I don't think of any of these companies that are high prices investments. So how do you invest in this sector then? Yes. So the struggle for me has been I see lots of inflections everywhere I look. You know, so there's I see all kinds of ideas where I'm like that is very empowering. I could totally see why I would use it. Millions of people would use it. That's amazing. But what I can't

answer is why won't there be ten just like it? And it goes back to you got to be non-consensisant right because if you're not non-consensisant right, your opportunity gets arbitraged away. And so I have to find something that's not only empowering, but I have to say these guys have a structural competitive advantage somehow to win the future. And there haven't been many of those, right? There's been few and far between to be honest. It's been tough.

In the in this sector. Yeah. I just mentioned Airbnb. You had talked about it that you you you passed on this. Stutually. Yeah. Talk. Talk about what why you did that and what do you look for when you make those misses? Like how do you as an investor when you everyone's going to I can think of it doesn't different people who missed. What is the what happened there for you

and what do you do to change that as an investor? Yeah. So first of all, it's helpful to just consider the backdrop that these startups are wild in the early days like people talk about startups the wrong way. It's like trying to spot a beat to finch in the Galapagos islands with a super long beak that has an adaptive advantage that allows it to survive in a new way, but like you've never seen

one before, but it's wild, right? It's like a mutation. So so with with Airbnb, the prior week we'd been pitched by a company called Mojo Mix that makes it let you pick cereal online and it'll assemble it and ship you in a box. And my partner Anne said, this is dumb. Why are we talking to these people? This isn't even what we invest in. And I was like, okay, that's fair. I tend to be the optimist.

Anteza be the skeptic, you know, when we look at this stuff. So then week later, we go into conference room. It's air bed and breakfast. This is a year before they'd applied to YC. And and and looks at me all these cereal box like what the hell another cereal company. And I kind of look back at her like, no, it's air bed and breakfast. I don't know what's what's this cereal about. So I ask him and he

says we're funding the company by selling cereal boxes. And so I was like, okay, so it's an Obama O's and Captain McCain crunch and then and then I say, okay, well, what does air bed and breakfast do? And he says, well, our advisor says that you like demos and not slides. I said, that's right. So he fires up the product and he can't get it to work. And so I'm like, okay, that's cool. We'll do it. Let's just go to the slides. He's like, well, I didn't bring any. So we're like 20 minutes

into this meeting full of cereal boxes in a conference room. And I still have no idea what air bed and breakfast does. We're just kind of kind of looking at each other in this room. And so but, you know, he I knew even at the time that he had this certain X factor, but I let myself get preoccupied. I thought somebody's could get murdered in one of these things because you know, at the time, it was barely more than a WordPress site. You know, you you invite a guest to your

house or apartment and then you serve in pop tarts the next morning. They sleep on an air mattress. And I was just like, this is just crazy. You know, and unfortunately, because Anonide's stupidly passed on this company, when lift says, hey, we're going to do this ride sharing thing and or, you know, people are like, our strangers are going to want to get in a stranger's car. And and I were like, I will take a walk on that wild side. You know, I can see it happening. So,

but with Airbnb, it was just it was just such a discombobulated meeting. And the idea was so crazy. And you had couch surfing.com, which was free and it was going nowhere. And I just, I just wasn't awake enough. I just my mind was not open and awake enough to the possibility of what it could be. Right. And you know, as a venture, you have to do that. You have to sort of. Yeah. And and I told myself, I'm going to learn as much as I can from that mistake and never repeat that

mistake. Cause like in corporate capitalism, you know, Buffett would say rule number one, don't lose money. Rule number two. Don't forget rule number one. In my business, rule number one is don't pass on Airbnb because I would have made six thousand times on money. If I'd say it, I could have made no good investment. The rest of my entire career had still been really good.

So, so I spent a lot of time really understanding what I got wrong. And, and, you know, another good lesson in that is quite often the best seed opportunities don't present well. And it's incumbent on you to be awake to what it could be rather than, oh, the entrepreneur didn't present well. I'm out. You know, that's right. Which awesome happens. Which often happens.

Maybe more often than not. As some Mike, when I think about the different life cycles of a company and the kind of incumbent asset classes, angel, venture, growth, IPOs, public company, mature, declining, distressed, I have, and I've invested across all the different asset classes and been involved in companies across that entire lifespan. Hands down the best investments I've ever made have been distressed. I think angels by far the worst. My

sense is that's consumption not even investing. And I think venture is a close second. I think venture investing is so difficult. And with, I think two thirds of investment in AI and is now coming from just four big companies that kind of the big four. And that just an increasingly smaller number of not only tier one VC firms, but increasingly smaller number of partners at those VC funds are getting all of the deal flow because it's not the check. It's the signal

about the early company and these VCs have developed amazing brands. My sense is that just the venture venture or venture capital as an asset class is getting more and more challenging and more and more concentrated that all the returns are clustered amongst a smaller and smaller number of firms and people. Your thoughts? Yeah. In general, I agree. In general, I think that venture shouldn't be thought of as an asset class because the venture and just like startups, the average isn't any good,

right? Only the extremely rare exceptional is very, very good. So this is the way I think about it. So, you know, those old British guys in the Anorak coats who like have journals and they spot these trains coming and going and everybody thinks that they're socially maladjusted and dorky when it comes to trains. I'm that way when it comes to startups. So like I can't do any job other than invest in startups because I keep a I have this and I'm happy to share it someday if you are

ever interested. I keep a list of every startup that's a hundred bagger and I create a time capsule for them. So I want to know not just why do they succeed. I want to know what exactly did it look like at the time you would have had to decide and that's hard because even the founders misremember how it really happened. You know, people remember stuff differently when it works. And so, but like

I get just like fascinated with that, right? Like I like I'll talk your ear off about like what I've learned about like these time capsules are looking at these startups and what the great ones were and what was rare about them, what we can learn and which of our frameworks would have worked, which of them wouldn't have worked. But like I just it's kind of like Buffett and Munger would just

read Fortune 500 reports all day. Like I just I just love doing that. And so I think you can still succeed if you're if you're like a train spot or about it, but but but you'll notice I don't pay that much attention to other VCs. And so because even the good ones, even benchmarks, Sequoia, they're wrong more often than people realize. You know, it's the magnitude of the right ones is very high. But I think that a lot of it has to do with just being interested. So so I would agree with you in

the main. I'd say as an asset class, VC is bad. Just like as an asset class startups would be bad. Right. You're you're trying to find the exceptional. And and then you know, you're trying to find not just the exceptional, but who can persist in being exceptional. And that's really hard too, because there's plenty of people who are exceptional for 10 year window, but where they just right place right time. Very few venture investors are exceptional over many years or decades or

you know, different sea changes of tech. You know, I think that that so I so I would agree with you in the main. But if Sequoia let's be invested in their next fund, I'm probably in. Yeah. That's a good point. I like that. We will end on your train spotter. You're an odd train spotter. I love that. All right, Mike. Thank you so much. What a thoughtful discussion. Again, Mike Mayable's junior. And by the way, his father was a legend. I remember him. Thank you. And again, the book is

pattern breakers. Why some startups change the future. Thank you, Mike. Nice to meet you. Great to see you all. Thanks for taking the time. All right, Scott. Isn't he a smart guy? Really interesting. Yeah. I seem very nice too. One of my favorite people to talk to. It might be really good. He'd be a good kind of. He's not elder, but a statesman for the industry. He is like the Tim Walls of Ventracapalus. Anyway, we'll be back for wins and fails.

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off your Lumen. That's l-u-m-e-n dot me-slash-pivot for 15% off your purchase. Thank you, Lumen, for sponsoring this episode. Okay, Scott, let's hear some wins and fails. Do you want me to go first? Or do you want to go first? Actually, no first. Okay, I would say fail, and it's not a fail of the story itself, but the Washington Post had a story about a woman in Florida who got into trouble because

her transgender daughter was playing on the girls volleyball team. This is a story about parenting, and this community loved them until someone dropped a dime on it and then created hate. What a ridiculous thing. They loved the person and then suddenly didn't. It was so ridiculous, and it's a beautiful story about parenting. This woman is what a wonderful parent, that's all I had to say. It's just what a fail of society not to value what this woman's done for her

daughter, her transgender daughter, and it's worth reading. I would recommend it, and it's just, you know, at the same time, Will Ferrell has this show on about a partner, a writing partner of his, who became trans-amazing. Will and Harper. Will and Harper. I just love these pushbacks by parents and Will Ferrell and everything else. Both Will and Harper and this story are worth watching, and I think it's a fail on our society for making this so hateful.

In the positive, I did a beautiful interview with Joanna Coles and Sam Beath. They have a new podcast. I'm going to give them a little touting here. It was really fun. They're really, they're trying to do Scott and Care a little bit, and I wish them good luck in doing so. I thought it was a really nice conversation. They're still developing rapport, and there's no penis jokes, but really good job girls, ladies. Okay, so I have two wins. My first win is the death of Hassan

Nasrallah in the last couple of weeks. Nasrallah and basically the entire senior, the entire kind of senior staff around with the term as of Hezbollah have been taken out. Fun fact in the last six weeks, Israel has eliminated more terrorists from the US most wanted list, and the US has managed to do in the last 20 years. I think the world is a safer place.

With Nasrallah no longer in it. Vice President Harris said, regarding his death, Hassan Nasrallah, was a terrorist in the American blood on his hands across decades, his leadership of Hezbollah destabilized the Middle East and led to the killing of countless innocent people in Lebanon, Israel, Syria, and around the world today. Hezbollah's victims have a measure of justice. I thought that was well said. My other win is the life of Chris Christofferson, who passed away.

What a man. Okay, hold on. So a country singer, I put out a thread on this. You know, I'm writing a book on masculinity and I'm trying to find great role models. Anyways, this guy, all right. So obviously a country singer played college football. He was a

golden glove boxer. He was a Rhodes scholar. Masters in English lit from Oxford, Army cat, and then decided to go join the army where he roached the rank of Captain as a helicopter pilot, a Grammy award winner, a golden globe winner for best actor, eight kids, seven grand children. I mean, talk about just a stack of patriotism, creativity. He was known as being a very gentle person. He was known more as a poet than a songwriter, a great songwriter, Sunday morning

coming down best song ever. For the good times, me and Bobby McGee helped me make it through the night. I mean, I really do believe that I've been so distressed. I think so many young people have such a bias against America. They generally don't recognize how many, how wonderful America is. And I think that the basis of that amongst our rights, our rule of law, our blessings in terms of our resources, our constitution, all that. We have so many really impressive Americans.

And anyways, I just read when I heard he passed, I used to go see movies with my mom and my mom was a huge barbers strison fan. And so anything with barbers strison and we saw and he was in the original Astara's born. And I didn't really follow him that much. Well, that's not the original stars born is made actually four times including a very famous version in the 50s with Judy Garland and James Mason. Is that right? Yeah. But go ahead.

And so when I heard he passed, I looked him up and I thought, my God, this is just what, this is just what you want from men. Someone who is incredibly strong understands this fidelity and appreciation for what it means to be American, gentle, thoughtful, nice, really valued education. And by the way, just kind of outstanding at everything he tried. He was also known as a very generous person to other artists. So anyways, Rest and Peace, Chris Christofferson, that's my

dead at the age of 88. What a wonderful American life. And then my loss is, and I imagine you saw it, but there was a wonderful or really well done article in the Wall Street Journal about how men are continuing to fall behind. And I just want to make sure I get the, that's why you sent it to me.

Rachel Wolf, by the way, about 30 people sent me this article. But for a variety of reasons, whether it's a lack of real role models in schools or in the homes because of single-parent homes, whether it's that young men literally mature biologically later, whether it's the disappearance of middle-class jobs for men without college educations. There's just so many things that seem to be stacked, whether it's a predisposition towards addiction that's greater than

women in divorce homes or single-parent homes. Girls interestingly have similar outcomes as girls in dual-parent households. But boys come off the rails. It ends up that while boys are physically much stronger, they're emotionally and psychologically much weaker than girls.

And a lot of these factors are really coming together in a very, very upsetting way. And Richard Reeves, who's kind of my Yoda around this stuff, the president of the American Superboys and Men, just came out with a study about what a toll addiction and drugs are taking on young men. And since 2004, the incremental deaths of amongst men of deaths of despair, in other words, the new incremental number of men that are dying because of things like drug overdoses dying by

suicide, gun deaths, it is 400,000 men. So we have lost more young men in the last 20 years to these deaths of despair incrementally above the average, the baseline before that, then we lost in World War II. And I do think that, unfortunately, because of the advantage that I received and my father received, that there is not the same level of empathy and recognition of

just the data here. And there aren't nearly as many programs or thinking about moving in to help with programs for boys from recently divorced families, trying to get more males involved in primary schools, national service, figuring out more vocational programs, support groups. If you walk down the hall of NYU, there's, you know, golden seeds, women, venture capital, black women, support groups, there really aren't any support groups focused

on young men who are struggling. And more and more young men, Richard talked about this interview he was doing with these community colleges in Oregon. And they can't get young men to apply. And when they interviewed them, they went out and did a study. They said that they were worried they would be lonely. And there's really something very upsetting going on amongst young men. And

I track pretty closely all the emails I got. And the number one email I get, although it's toning down, it's something along the lines of, is it too late to invest in video, which is kind of funny. But, but the number two is all the same. It's people concerned about their boys. And it's not from their fathers, it's from their mothers. Yeah, I would, can I just note something here? Well, a lot of people say, why does Scott talk about the struggles of men so much? Carey should stop them.

And I got to tell you, I always am like, you know what? It matters to all of us, if men are thriving, very much so, because men can be very destructive too, by the way, and they are. And they go, they can move into really destructive points of view. But it's just, it's very important we get this right with young men. I think about it, given I have three sons too, about it quite a lot,

quite a lot. Well, women, neither women nor America are going to flourish. That's right. If men continue to flounder, it just isn't, America is not going to work if we don't have a middle class. And by the way, we should do nothing to get in the way of the fact that on the whole, women, especially young women, our society are killing it. That is a sign of our collective victory. It's a cost for celebration. And also it by no means means we shouldn't stay very involved

in focus resources and programs and justice. Unstil the many issues that women face. How many times do you hear? I know the most amazing women, smart, attractive, high character, and they can't find a mandate. And here's the thing, they can find men, they just can't find men, they want a date. The pool of economically and emotional viable men is shrinking every year. I would agree. Very good one, Scott. I'm going to add just one more sadness is Maggie Smith dying. I love Maggie

Smith. What a great pound for pound that woman has provided us with more pleasure whether she was in Harry Potter or down Naby or earlier the prime of Miss Jean Voting. What a woman. What a man for Chris Christophe. It's in what a woman for her. Anyway, very good. Winds and Fales. Scott, very good ones. We want to hear from you. Send us your questions about business tech or whatever's on your mind. Go to nymag.com slash pivot to submit a question for the show or call 85551 pivot.

Okay, Scott, that's the show. We'll be back on Friday with more endout list. We'll have lots to talk about because there's so much news these days, including from our friend Brian Williams. We're excited to have you back, Brian. Read us out. That's right. Well, that's like a horse drinking a slurpee of seven eleven. Today's show is produced by Leroy Namin, Zoe Marcus and Taylor Griffin. Bernie and your tide entered your this episode. Thanks also to Drew Burrows and Miss Averio.

Nishat Kura is Vox Media's executive producer of audio. Make sure you subscribe to the show where every listener podcasts. Thanks for listening to pivot from New York Magazine of Vox Media. You can subscribe to the magazine at nymag.com slash pod. We'll be back later this week for another breakdown of all things tech and business, golden gloves, Army Captain, a poet, Chris Christophe and Rest in Peace.