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The software patterns behind Rails and Laravel, with a data-led Waymo case
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2 min read
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150 docs
An organic founder conversation surfaces two software classics with concrete lineage; Garry Tan also amplifies a quantitative Waymo safety article, with its empirical claims separated from its broader learning-curve argument.
The strongest recommendation: Patterns of Enterprise Application Architecture
Type / creator: Book and software-architecture reference by Martin Fowler.
Link: No direct book URL was included in the recommendation.
Recommended by: David Heinemeier Hansson (DHH), in conversation with Taylor Otwell.
Key takeaway: DHH says Fowler wrote down the Active Record pattern in Patterns of Enterprise Application Architecture, which he calls “the bible” of these patterns. He connects that idea to Rails, whose patterns were later reinterpreted in Laravel.
Why it matters: This is more than a generic classic-book mention: DHH ties a named design pattern to the lineage of two influential web frameworks. Read it to understand why framework conventions look the way they do, rather than treating them as arbitrary implementation choices.
The practical companion: Getting Real
Type / creator: Booklet/PDF by 37signals.
Link: No direct URL was included in the recommendation.
Recommended by: Taylor Otwell.
Key takeaway: Otwell says he first read Getting Real as a short booklet about how 37signals built software, calls it “super great,” and tells people to read it. He places it alongside Rails, Sinatra, and Django as part of the material he studied while building Laravel.
Why it matters: It complements Fowler’s architecture-heavy reference with a founder’s account of software-building practice. The pairing is unusually useful: one explains a durable design pattern; the other offers a concrete operating model from a company that shaped the same ecosystem.
A quantitative autonomy case: Waymo Drivers Are Way Safer (10x) Than Humans
Type / creator: Article by Gale L. Pooley, published at Gale Winds and hosted on Human Progress; dated January 7, 2025.
Recommended/endorsed by: Garry Tan, who amplified the underlying HumanProgress post with the message that “the future is already here” and should be spread faster.
Key takeaway: The article reports that Swiss Re analyzed liability claims from 25.3 million fully autonomous Waymo miles and found 88% fewer property-damage claims and 92% fewer bodily-injury claims than for human-driven vehicles. It then converts those reductions into a claimed 10.4× safety factor and interprets Waymo through Wright’s Law.
Why it matters: This is a concrete way to examine autonomy through insurance outcomes and accumulated operating experience rather than anecdotes. Keep the layers separate: the claim reductions are presented as Swiss Re’s findings, while the 10.4× figure and the broader learning-curve argument are Pooley’s framing.
The software patterns behind Rails and Laravel, with a data-led Waymo case
Research extraction
Fireside Alpha
Qualifying post: @firesidealpha explicitly points readers to an external Substack article for “more key quotes from OpenAI's safety related conversations,” and provides the article URL.
Research extraction
Laravel Live Denmark
David Heinemeier Hansson (DHH)
Profile
The transcript contains one explicit external resource recommendation:
- Getting Real — by 37signals. Recommended by Taylor Otwell, who says he first read its PDF as a short booklet about how 37signals built software, describes it as “super great,” and tells listeners to read it.
Research extraction
The HumanProgress article is titled “Waymo Drivers Are Way Safer (10x) Than Humans” and is attributed to Gale L. Pooley, dated January 7, 2025.
- Evidence presented: The article says Swiss Re analyzed liability claims from 25.3 million fully autonomous miles driven by Waymo, reporting an 88% reduction in property-damage claims and a 92% reduction in bodily-injury claims versus human-driven vehicles.
- Article’s calculation: It converts those claim reductions into a stated overall safety factor of 10.4×, comprising 8.33× for property damage and 12.5× for bodily injury; it also states that Waymo’s safety factor has grown at a 16.9% compound annual rate since 2009.
- Framing: The piece presents insurance claims and premiums as indicators of safety, then interprets Waymo through Wright’s Law: each additional mile supplies learning, potentially creating a cycle of more production, knowledge, lower costs, and wider adoption.
- Provenance caveat: The page states that the article was published at Gale Winds on 1/7/2025, which is relevant to evaluating whether the HumanProgress item is original, syndicated, or reposted. However, the supplied bundle contains no mention of Garry Tan, his endorsement, or the circumstances of the recommendation, so it cannot by itself verify that the link was an organic resource recommendation rather than a repost.
20VC with Harry Stebbings
- David Sax’s commentary: The 20VC panelists called Sax’s point one of the week’s best: if an AI company presents any material risk of exterminating part of humanity, fixing the problem or shutting the company down is the CEO’s responsibility. The discussion extended that logic to systems a company cannot control: either manage the risk or stop building.
- Twitter post on AI’s dual-use risks (creator and URL not identified): A panelist called it “the best thing I read” on the subject. Its framework is that every positive AI capability has a corresponding harmful use—for example, superhuman coding can enable hacking, structural engineering can enable finding flaws, and drug design can enable novel poisons. The post also argues that open-weight models effectively lack guardrails, allowing harmful versions to escape.
Patrick OShaughnessy
- Video/interview — Patrick O’Shaughnessy’s conversation with Michael Moritz. O’Shaughnessy explicitly recommends watching the conversation and says Moritz was especially thoughtful and reflective when discussing his parents, childhood, and difficult personal experiences. The discussion covers exceptional people, monomania and the cost of greatness, Steve Jobs, writing, journalism, and AI. Watch the video.
Garry Tan
- HumanProgress article on Waymo safety (article; HumanProgress): Garry Tan shared the resource and endorsed its broader message—“The future is already here / We just have to choose it and spread it faster.” The linked post reports that Swiss Re found Waymo autonomous vehicles generated 88% fewer property-damage claims and 92% fewer bodily-injury claims than human-driven vehicles. URL: https://humanprogress.org/waymo-drivers-are-way-safer-10x-than-humans/
Marc Benioff
Profile
- Dario’s previous Dreamforce interview(video/interview) — Marc Benioff recommends revisiting the interview from the prior year because Dario followed through on the things he said he would do; Benioff therefore takes his statements “unusually seriously.” Benioff also said he posted a video of Dario’s comments on X because people should listen to him.
David Heinemeier Hansson (DHH)
Profile
- Patterns of Enterprise Application Architecture — book by Martin Fowler. DHH credited it as “the bible” of enterprise application patterns and said Fowler’s documented Active Record pattern shaped Rails; Rails’s ideas were later passed on and reinterpreted in Laravel.
Instinct Raising $1B at $10B & Meta Launches Muse | Miro Sells for $1.36B After a $17.5B Valuation
20VC with Harry Stebbings
YouTube channel
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highlights
0:00If you're building something that you can control, then maybe you should stop building it. If the feds really thought that there was someone in downtown San Francisco building a technology that had a 10% chance of blowing up the world in the next 10 years, they would move in with a SWAT team, kill everyone in the place, and close it down.
0:18So this week, number one, pacing the frontier. We discuss what it means for infrastructure, what it means for energy, and what it means for the biggest frontier model providers. Next up, we've got Town, we've got Instinct, and we've got Zuck and Muse. What happens here? Next up, Bending Spoons, baby. They are on an acquisition spree, having bought Miro for 1.35 billion. And then finally, Mral raises €3 billion, Europe's largest ever tech funding round. This and so much more in what is
0:47always quite a colorful discussion with Rory and Jason.
0:50Market moves.1% on news of 10% probability of extinction. Capitalism took on board the risk and said it'll be fine.
0:56$2 billion is just a starter round adventure today. The real problem is that 10 or 15% of founders are sociopaths. They genuinely are. In fact, if you're saying Mistral is now competing with Open AI and Anthropic in the frontier model race, you and I know that would be [ __ ] I think what you're really saying is ready to go.
1:24Boys, we are back. Now, I was thinking about where we should start, and in all honesty, I just thought it'd be egregious to not start with the most important thing I thought, which was Dario coming out and saying that we need to pace the frontier, to which Sam Alman then agreed with him. And then Elon too agreed that it is important now to put in place some form of exter external regulatory body to slow down regulate the capabilities moving forward of model
1:54providers. How did we think about this?
1:58I mean it's been fairly universally panned. I tend to be on the side of the people who are saying that hostile reception is deserved. I mean what is the problem you're trying to solve?
2:08Dario, if you read the note, Dario's definition of the problem was you fairly well defined. It was, you know, cyber attacks, it was economics, and then it was we lose control of the AI. So, even though that sounds like a lot, it's fairly controlled. The guy who quit and started this crazy thing as a Cox or whatever his name is, and then the employee within Antropic kind of chiming in saying, I think there's a 10% chance of, you know, human extinction in 10 years. That's a very different thing,
2:37right? So the problem let's deal with that first of all because I'm just going to call such [ __ ] if you and to be fair and this why I'm saying it's complex is every time Dary makes a comment you know a lot of the tweets back hey if you're going to blow up the world you should stop and they're right the truth is he didn't actually say they were to be fair he didn't talk about P Doom but I'm going to do the same thing as everyone else and I'm just going to throw some rocks first right if you really think if the feds really thought that there was someone in downtown San
3:05Francisco building a technology that was going to blow up the [ __ ] world, had a 10% chance of blowing up the world in the next 10 years. They would move in with a SWAT team, kill everyone in the place, and close it down. I mean, replace the word AI with, "We're building a nuclear reactor. It's totally safe right now, but there's a 10% chance it goes wrong in the next 5 years and blows up the world." Issue that statement. How many seconds after that
3:32before the entire weight of the US military is shutting you down? And what it says is what it says is is this these kind of 10% poom people the truth is either the US government is asleep which I doubt or B it's looking at this going this is a bunch of excited teenagers we'll step in later if it gets crazy. So my my first point is the to be fair to Dario, not Dario, but the oh my god, the world's going to end. We're going to destroy the world, but we're going to keep doing it, people. They've I mean, I
4:01cling to the hope that the US government if if it was a real issue, we'd do something, right? So I I think all that's overall [ __ ] right? Which is different than saying what Dario said is overall [ __ ] It's just not realistic. Dario stuff, it's on the other hand, it's hard not to disagree that the cyber risk is real, right? So when Dario says that of the three risks he raised the cyber risk real the economic risk I will all be unemployed I think it's a little bit [ __ ] and then the third one we lose control of
4:30the agents hard to assess so okay that's the problem he's trying to solve and then the solutions range from the unlikely to the impossible you know the unlikely is yeah we're going to install third party monitoring agents voluntarily but then the ask is that it be made a requirement that's the first thing then the Second thing is all the democratic governments have to agree and that'll be easy because we get on so well with Canada and Europe right now.
4:55And then the third thing is we have to agree with the Chinese and that's going to go super great though it might go greater than the Canadians cuz we like the Chinese more than the Canadians. We should put in the Russians. We get on great with them, right? So the whole thing so stepping back from the [ __ ] side two and side three, right? Just side one, right? proposal one, you know, which is we're going to introduce these these kind of third party monitors and if it's voluntary, knock yourself out.
5:23You do whatever you want, Dario. Right?
5:25If the government decides that they should do something, which is different than Dario thinking they should do something, then it's not going to be your friends regulating. You're not going to get to choose that. It's going to be a law. There's going to be regulators just like bank regulators.
5:38And if and I'm not sure that's a great idea. I'm not sure it'll work really well for innovation, but but if it does happen, I mean, a lot of the comments were either this is silly, we don't need it, or if we do need it, who the [ __ ] are you to tell us what we need? We're a government. I'm kind of sympathetic to Boda responses. Sorry, that was a vent, but I I just think it's so over wrought.
6:01Sorry. Sorry, Jason. I just launched there.
6:03No, no, no. My very tactical view, and then I'll give you my very tactical view was this was just a risk factor in an S1 done live. My tactical view is anthropics going public. Um, and he he is just, you know, in part because of the employee that worked there four weeks or eight weeks that said there's a 10% risk of destroying humanity, which many agreed with. But it he's just getting ahead of a risk factor so that when the $2 trillion IPO happens, it's a non-issue. I I I honestly think he's
6:31enunciating a risk factor and we're ahead of it. We're going to debate it as a society. And so when we go on the road show to New York and and everywhere else, no one cares. That that was my it's not even cynical. I think it's your job as CEO. That that was less less discussed. Words have meaning. If you re and again, I'm going to be fair to he didn't say 10% chance of blowing up the world. Right.
6:52He responded to it. He was Yes, you're right. He responded to it. I feel like if if government was doing its job, we' convened a congressional committee. We'd subpoena Dario and say your head of safety, not the guy who quit, Jason, this is an important point. Not the guy who quit, but your head of safety said, "Me and many of my people, there's a 10 think there's a 10% chance of blowing up the world." Get a [ __ ] congressional committee, subpoena the guy, and say, "Mr. Dario, as the head of this organization, do you believe that your safety commissioner is correct and
7:22there's a 10% chance that you're going to blow up the world in the next 5 years?" Yes or no? Right. But it's going to happen. This just started. You're you're acting like the feds aren't going to raid anthropic. I don't think it's literally going to happen. The feds are going to rate anthropic conceptually speaking. This just happened last. How many texts did you guys get from folks outside of tech asking if AI is going to kill ourselves? In the last week, I got texts from people, relatives I haven't heard from in years. Are we is AI going to kill us? Jason, there will be congressional committee and hearing
7:51after ad nauseium for the next 24 months. We have just awoken the the sleeping giant here that AI isn't about a bunch of folks in SF becoming uh you know sent millionaires. The public is going to believe it's going to kill us.
8:05And I think that's why Trump I don't want to go too much. I think that's why Trump cut it off so quickly. I actually think he said it's not issue. We're going full boore. I don't think that was out of nowhere. I think this is because there's going to be two years of every it's it's this is all they're going to talk about to to be clear. I think you are right is that so maybe I should have said the future tense if this statement h you're right is that we've kicked off a bolder cascade here now whereby you're right if I'm if I'm an ambitious politician I would do this right and maybe you are
8:32right there's two risk factors in the S1 what you're saying it's a really good point the first risk factor is by the way there's a 10% chance we're going to blow up the world we can discuss that one that's a fun one but the other risk factor is because I employ people who believe we have a 10% chance of blowing up the world and I do this because They're actually very motivated to build great AI and for whatever reason that motivates them. We can talk about that with our therapists, right? Because I'm running this company where these people say these crazy [ __ ] As Jason's just pointed out, I'm probably going to spend
9:01the next two years being investigated and there's a series of bad things could happen for that up until including the government shutting me down. You're right, Jason. That's the risk factor. I agree with you. Yes, it's going to be the weirdest risk factor ever. We say dumb [ __ ] so we may get shut down. Look, I there's so much going on here.
9:19It's it's it's hard to track, right? Um I would just add two things I thought were the best things said. Um one maybe a little political, one I think non-political. I think the best thing actually was David Saxs this week who said, "If it's that bad, Dario, it's your effing job. Whether it's 10% or if there's any material risk, your company is going to exterminate even a subset of humanity." Right? That is your job. Your job is to fix it. Shut down the company if you can't. Right? And if you're unable to co, bring in a new co. This is
9:48your if there's any company that had these sort of odds. It is it is your job. Right. Um this is product liability 100000001. You can't kill. So you only so many people you're allowed to kill with your product.
10:00And Jason, it has been first of all exactly. I got to hand it to death. I think it was spot on 100%. And I think it was really odd to see Lena K, who is probably the antitrust regulator most of the Silicon Valley hits the most come out on exactly the same point, right?
10:16You know, you when you get David Sax and Lena Khan both on the same and both making excellent points, it's a really fun issue. I I I agree with you. I think I'm sorry, I'm naive.
10:27If you build recursive self-improvement in the way that people talk about it, it is what it becomes not relatively unknown. like I could have good intentions for it, but it could become something else or used by malicious actors could be weaponized to be something else.
10:45And I think, okay, and I'm being really clear here, I agree that is actually the only one of the three risks itemized in the Dario thing that I think is interesting, right? Because the other two, economics, I think it was a foolish thing to say for a whole bunch of reasons. I think you can't say I'm not going to invent technology because it puts people unemployed. We'd still be back on on all on our farm. 73% of work in the farm. That was a dumb point. Just trying to be nice and sucky up. The whole cyber thing is real, but that
11:13cat's out of the barn. The commies have the the cyber, so we're done. The only thing that was a fair point. And then on the other hand, the P Doom thing he didn't talk about. So the only thing in his letter that was actually simultaneously yeah that's a fair point and I don't have the answer is exact that we could quote lose control of the things recursive self-improvement that kind of stuff. You're right. That that is a of the three issues he raised as I think from the three responses he gave that was the one that you go hm okay I
11:41can't Jason's point I think Jason and David's point spot on at that point what you're saying is forget the other two which are about other people will do [ __ ] with our technology we come back what you're saying is you're building something you can't control if you're building something that you can't control then maybe you should stop building it right because you're the CEO and as Jason I'm going to agree Jason and David do you I mean The third parties can keep an eye on you, but if there's people cleverer than you who can figure out the problem that you can't figure, you'd have hired them years ago.
12:10We should probably assume you're the cleverest people doing this. So, either you think this is a manageable problem, in which case keep building, or you think it's not a manageable problem, in which case you probably should stop. But stop ringing your hands and saying, "If only the rest of the world could stop me killing humanity." You're the CEO. I I I actually think the the cacophony of anti was really good there.
12:35But you've also taken it to a level where you've weaponized a Chinese economy to have an open-source ecosystem that's incredibly strong. And now to go Mayor Kulpa, let's put the brakes on.
12:46You've weaponized them enough to be a serious cyber threat to all of our institutions. And now you want to put the brakes on. And if you expect us to pay, first of all, I'm going to push back on the weapon. basically saying, "Oh, they wouldn't have had these models without us doing." I I'm not sure that's the case. I mean, you can get into how much of open open weight has been distilled.
13:06And I I can't assess that. So, there's some of it, but you know, they got smart people, too. I think there's too much attribution of godlike status to individuals. The truth is, independent of probably what Anthropic did, there's probably going to be a bunch of LLM alternatives in China. This technology, the cat's out of the bag. Um, it's it exists and you're right. So your your your main point is correct. Um, it it's out of the bag so you can't I mean but it's out of the bag because you let
13:34it out of the [ __ ] bag like that. Sorry to be blunt.
13:38Well, I don't know if you just did you you were the best at it. You are. You are. Yes. It's it's like it's like it's done.
13:44I mean again I hate the atom bomb metaphors because they're like Nazi metaphors. They're just so crude and simplistic and it actually in this case feeds the ego of all involved. But it's a really good metaphor here, Harry.
13:55Unfortunately, because you can say if these folks are all the Oppenheimers and the US invented the bomb, there's no doubt that the Russians had the bomb, you know, by not by like four or five years later, three or four years later, and in part because they stole our [ __ ] right? They had spies in Los Alamos from the UK. Let me remind you, Hans Fuj um and then um they stole our secrets and they built the bomb, too. But you know, what are you going to do, right? They probably would have got Elon's been clear on that for three years. He said he he he wished he that AI hadn't happened. He said, "But since
14:25it did, I'm going to do it anyway because it's too late." He's he he didn't just say this last week. He's been saying this for 3 years that it's gotten too strong, right? Before XAI even got anywhere, he was consistent. We shouldn't I wish I don't want to be doing this, but it's already been done.
14:39It's too late. I I I don't think we should have this much. In fairness to the CEO of Anthropic, some as I said, some of the most kind of hyperbolic stuff he's not saying, but you have the that pacing letter that a bunch of scientists signed. There's a lot of hyperbole that's not coming from him and he's a little more nuanced on what he can what he's propo what he is worried about where the only one that's really meaningful is this kind of losing control of it. Right.
15:08But I think this is where his prime mastering has come back to bite him on the ass. Of course, to Jason's point, previous in episodes where he's so dogmatic about what it's going to do to jobs and employment. Now, when things do come out, it's tied to him sometimes unfairly just because he's had that stance because of his labeling before.
15:26Yes. And Yes. And to to Jason's point, which I think is spot on. My god, is this unpopular in the rest of the world?
15:32I mean, cuz Yeah. It turns out if you I mean, you know, we're building a technology.
15:37It's going to definitely cause 20 to 30% wide collar unemployment. And my VP of safety, whom I haven't fired, has said on Twitter, there's a 10% chance it blows up the world, right? Hm. I wonder why we're not popular. Well, let me give you a few quick clues. Can I just say what I thought the best thing I read on all of it was on Twitter anywhere. Like I know it's simplist maybe simper confluent um acquired by IBM for I don't know 12 billion. Just step down. This is the best thing I thought was written on
16:07all of it. Said a lot of people have fake fake and stupid takes. Um, it's a lot of marketing. He said, "Here's here's the captain obvious point.
16:15Most positive use cases for AI have a corresponding dark version. If you're superhuman at coding, you're superhuman at hacking. If you're superhuman at structural engineering, you're likely superhuman at finding structural flaws to knock buildings down, right? If you're even superhuman at designing drugs, you're superhuman at designing novel, undetectable poisons. If you cure viruses, you can create them. Some of these are not that bad. They're manageable. Others are scary. It is a
16:42fact. Like every every every positive if you don't get guard rails right, and there are no guardrails in open weights models for for all intents and purposes, dark versions can be created, your AI will be just as good, all things being equal, at the dark version as the light version. It's a fact, right? We need to solve these issues. But it is a fact and it is not even there's so many opinions and anthropomorphizing and temperenters but the dark versions will escape into hugging face.
17:07I do agree with what you said Jason. Absolutely right. When people invented books when Gutenberg invented printed books the Catholic churchs were pissed cuz they really like to have a control and all knowledge and they just didn't like in information dissemination. Ditto the internet. There's a reason every totalitarian regime hates it. Right. Every I think it's it's great framing.
17:26Every technology has a positive side and a negative side. We're going to do what we do every time. We're going to roll out the positive and find a way to manage the negatives. But in the interim, we're not going to sell chips to China, which of course produce a Jensen response like you've never, you know, the usual Jensen response. So on the implementation side, not realistic.
17:47Do we see ripple effects in across the infrastructure layer in publics, in privates?
17:54There was a one-day minor hit on kind of the semi stocks on that first day.
18:01Separately, pleasingly, Crowd Strike and all the um cyber stocks jumped 10%. Um so it's actually interesting. I looked at Monday it and we're recording this on Tuesday, it'll appear on Thursday, which is a whole lifetime away in the world we live now. But the instant response was slight markdown on semis and the AI capex, but not a lot, right? So no discern I mean maybe which implied some level of slowdown significant mark up on
18:29the cyber stocks because it looks like that's where the actual reality of the problem exists and overall I always look at worldcloud which is the software index versus socks which is the semiconductor index and it was a great day for worldcloud relative to socks software up semi slightly down but not big I mean I loved I saw a tweet you know which was basically market moves.1% % on news of 10% probability of extinction.
18:56In other words, capitalism took on board the risk and said it'll be fine.
19:00This may be like a much faster version of the 20s. There's no regulation.
19:04Everyone just wants to get rich as f in the 20s, right? Um and what our version of 1929 will be for AI, you know, we don't know yet. But everyone just wants to get rich. The amount of wealth, you know, $2 billion is just a starter round adventure today, right? I was literally thinking that today when I saw Shield raise at 20 or 30 billion and they had a little chart. I'm like, "Wow, two billion is a starter round now in today's world. It's it's just so much money and AI is so much money that it's just too easy to take advantage of the
19:34dark version if that's how you make money. It's too easy for you to be because every LLM has a dark version. It's it's too easy to cut that corner if that's how you can get raise at a billion after demo day. It's too easy."
19:46A different version of the same thing is this. Everyone saying, "Oh my god, this is evil and bad and could be dangerous." And as it were, they're purging their conscience by worrying. But Jason, you're exactly right. No one's saying, "I'm going to push away from the table."
19:58And I don't think the people running some of these companies, especially on Tropic and Open, oddly enough, they're not profit I mean, you got to defend them a little. They're not profit maximizers. If they were profit maximizers, they would own more than 2% in the case of Dario and 0% in the case of Sam, right? Kind of weird.
20:14It's the It's the other folks that we should be worried about, not the three of them.
20:17Agreed. We actually have halfdecent stewards at the top. Sam, Daario, and Elon are about as good as they may be better in theory, but in practice, we can't get three better stewards. They have the right reasons to do what they're doing. They genuinely do. The real problem is that 10 or 15% of founders are sociopaths. They genuinely are. In fact, especially what the successful ones, you it it lets you drive will something out of nothing into existence. The ability to manipulate people, the ability to have that look and do it. And that's where the bad
20:47people using AI come from. The sociopaths. If if you don't think that's true, you guys have you really don't think 10% of the founders you've ever invested in are sociopaths. Of course they are. We're going to move on. Next, we have the AI assistant race that we touched on last week, but I was really annoyed because we actually missed Meta releasing Muse, which is Meta's product that is an AI assistant in many ways.
21:10Um, what did you say? We didn't miss it. Did you say we just Well, like it came out after we recorded the show.
21:17Correct. I mean, I'm actually going to give us an A. I'm going to give us an A.
21:21We We recorded on Tuesday because I because you used that clip of me on Tuesday. I was like somewhere there were 20 um Meta engineers locked in a room being told to ship something. We said that on Tuesday. On Wednesday, Muse shipped and on Thursday the the the pod ship. So, I think we nailed it. Man, you just didn't know it was 500, not 20.
21:40That's the only slight thing that was missed. It's 500. You didn't realize that the minute OpenClaw took off, Zuck took a huge chunk of his AI team and said, "We're building OpenClaw for consumers." And from that night on, they people work days and nights. I mean, I was logging bugs over the Muse weekend on Twitter for fun. The engineering team was responding in real time Saturday night, Saturday morning, Sunday morning.
22:00I mean, they're working 996 on this thing. This is not 20 people. This is a top priority since OpenClaw launched, right? That's it's interesting. It came out, you know, seemingly oddly after some of the other agents, but it this has been a a P1 since OpenClaw, right?
22:14Let's take cuz, you know, people were like lining in the streets with their Mac Minis trying to get figured out how to run an agent. Now I can do it on Facebook.
22:21Well, let's actually just start with this, Ryan. I think you'll be as interested as I am by Jason's analysis.
22:26Um, I'm not able to use it being in the UK, so would love your Jason.
22:31Uh, yeah.
22:33Um, Jason, I'll get you a VPN.
22:36Yeah. Thanks, dude. Um, what did you think? How good is it? How how good a response is it to instincts? What do we think?
22:44Well, first of all, as software, it's very, very, very good. It instantly works. This is the definition of great software. Like, you just can't believe how well it works cuz all the hard work was done that you can't see, right? Um cuz it's and and so most of the things you wanted to do, create a reservation, send an email to I I asked Muse to to send us a bunch of stories for this show, right? It sent it to It sent it to me and Harry. I forwarded it to Rory. It did it at the right time. It sent it to us, right? I had it rebuild the entire
23:12sastaster.com website for me. Log into WordPress, redo it. It did a pretty good job of it. Um, a lot of the things you wanted to do, it just works. Um, I'll add one more thought and then the the the meta question. The really interesting thing is, you know, we we didn't talk about, but it is something I know a little about. It's not cheap.
23:31Okay? You're giving everybody up to a certain point a free VM, right? Which I think two CPUs, two GPUs, 8 GB of RAM, 100 gigs of storage or something. I do know that like the replets, lovables, versels, and others, it costs about 3 to four bucks per person to deliver that.
23:49Okay. And Muse is at the edge of it. It gives you more than they do. Okay. And those guys are working on it every week because it's such a huge part of their cogs, right? Because every time you spool up a website, not a free one, but a paid one, they've got a $3 to4 nut.
24:03You know, Wix before Base 44 has a twocent nut to serve that website. Now it's three to So they're very incentive every day to work that down, right? Meta is lucky. Not only does it already have the infrastructure, right? So we could argue whether it's free, but it has tons of infrastructure. This is running on on its own LLM, Muse LLM. So it has a massive infrastructure and LL benefit that no one else has. And it's that's why it's fast. That's why it works well.
24:28That's why you get more VPUs, more GPUs, more everything. So I think from an infrastructure perspective, it's almost no one can compete. You get all the VM, all the infrastructure, all the storage and they have their own LLM use and and my learning is for these lay usages like what we're talking about, not frontier drug discovery, Muse LM is really good for this. So it's a good product, but the question is does it matter?
24:53What do you mean does it matter? Sorry.
24:55What's the killer app? Another reservation at at at uh at Cheesecake Factory or TGI Fridays. We we need to see the the Visical of Muse. We need to see what is the killer app. Every horizontal platform needs a you know, traditionally needs some sort of killer app, right? I I'm just skeptical. I'm just I'm just wondering, right? I don't think in this whole thing I don't think there was a killer app for OpenClaw, you know? I and I don't know if there is a killer app for muse because or instinct
25:24because there wasn't one for open call.
25:25Is it is it not being your discovery mechanism to shopping like a WeChat a super app? You know, Zuck has spoken about taking portions of transactions as being the business model as well. Do you know the model's good, but what what are his examples? Scheduling his daughter's carpull. Is that really what a trillionaire needs to do with a general?
25:45He can't even come up with a good use case of Muse for himself. He's making up consumerry things. I had to schedule ballet lessons for my daughter. I mean you great great great but what what you need to run this thing 8 hours a day I think like claude code or codeex or to really matter and so if if we're in it 8 hours a day like a super app it's cool if it's a random task I just don't I'm just waiting to see what the killer app is and I've run and and muse is really
26:13fun like it's so beautiful it gives you all the beauty is it gives you all the ideas it has an idea tab and it tells you all the things to do I've done most of them Um, and they're great. I just don't know if it's killer.
26:25I don't know if it needs to be. And I know that sounds stupid, but no, but I use Instinct in a similar power user away. I think latency is a real problem with Instinct, by the way, which might not be with Meta. I wait minutes for responses. Minutes. It's like the first days of chat GPT. It's a real problem, but but I don't know if it needs to be like it does all of my bookings, travel, restaurants. It does all of my shopping.
26:47It's very good. Does all of my calendar invites. I know there's no killer app, but it's just incrementally better than everything else. I don't know, but is lots of little bits not good enough. I don't know. I have a feeling it might be right. Look, I I think well, I'm skeptical of the category on a standalone basis, but you know, I always go back to I always have my three venture questions. Is this a category?
27:09Who's the winner? And are we getting paid for the risk, right? And is this a category question? is do people want is there a role for AI in a kind of personal assistant messenger type thing and I will say having used both instinct and news I can see it right I don't I don't know if I love the word killer app because v visical a single thing that does everything you that that just ignites a platform like visical let's leave let's leave the killer app concept out there right at the margin you kind
27:37of go yeah I'd use this right I mean if you look we do have the I mean if you step back you do have the example from long ago of WeChat, you know, Chinese messaging systems having very much all a super app.
27:49Facebook tried to do that with the messenger. It didn't take off because the truth is the UI preai, the UI of trying to book things on a chatbot is a pain in the butt, right? It's actually a lot easier to just go to the United website and see all the flights at the same time and book it, right? It is possible that with intelligence at the back end does this thing from you non-intelligence you actually have an interaction on a mobile device where enough of the intelligence is in the cloud that it can do a lot more for you
28:18it knows a lot more about you and it just becomes an easy place to get [ __ ] done right and therefore to your point how at the margin you can imagine people using this right so it just you know if you're a Facebook user you get muse you're h you're a happy little camper you chug along right Um, so I I I do I think there's more that's going to happen. Yes. The real to me the interesting question is the second one is do you think it's a standalone company that wins here or do you think
28:47it's going to be Facebook with Muse and Open AI with whatever product they come up with? You know, do you think that the instincts of this world can build a standalone business here? Giving that to put it out there having raised at something like 50 pre less than 5 months ago, then 400 pre, then a couple of billion pre, they're now, rumor has it raising it north to 10 billion. Do you think they raising they are raising 1 billion at 10 billion? And the most popular
29:15segment of the show that we got was Jason's IC. So Jason ding, we have a billion dollar round for Instinct. Welcome to the partnership meeting and it's a10 billion valuation.
29:31Will we be putting in $200 million into this billion dollar round at 10 billion?
29:38Well, we we will and I will I'll be honest to the team. It's a this is a risky one. I am impressed with what Muse has done and if we had to compete head-on with Meta and that was the only thing, we'd be in trouble. I would not recommend this investment because we can't compete with their balance. We can't compete with their servers. We can't compete with their GM. They can't compete with the LLM. However, after having done several reference calls and over a dozen synthetic ones on Claude, uh I've learned a couple things. First of all, Meta cannot go uh crossplatform.
30:07It cannot go in it. It it it does own WhatsApp, which is a real threat. It won't be work with all carriers. It won't work across all services. it won't work across. It's highly focused on its own on its own platforms. And so that is only a subset of how we communicate. How many folks uh between the ages of 18 and 55 are on Facebook all day? Very few, right? It it's really your grandmother's application. Now, WhatsApp is popular in Instagram, but the fact that it is not going to be interoperable across all
30:35these different services means it's got a fairly limited reach. Two, um how long will Meta maintain the energy here, right? when this produces essentially trivial to no revenue. Anyone remember Workplace? Workplace in its own way was probably better than Slack for folks that lived in Facebook. It was probably better. It had a lot of neat use cases.
30:56It worked well. It was architected and it was actually the highest NPS of any product in the entire Facebook Meta platform, but they couldn't maintain the energy. My reference checks say when Alex leaves scale, this product will fall apart. Um, if this was the only thing that Meta had to do, I wouldn't bet against him, but we're just not going to see the commitment to do the kind of things the Instinct team is going to do. And let me tell you, this is one of the greatest teams I've seen in my history of investing, right? Um, it they're great. Um, these kids come and they play World of Warcraft in real
31:25time during the during the pitch. Um, they're they're they're top 10 each all they're both top 15 on League. Um, I recommend leading the round, um, but being cautious with reserves because the next round valuation may hit into realistic IPO limits.
31:40So, you would do this round?
31:42I wouldn't. You asked me to do it. There's no effing way I would do this round.
31:45Okay, good. Okay, we've got What the [ __ ] I believe here's why I wouldn't do the round. Okay, and you can call me a fddy duddy for it. Okay, I believe most of that, okay, for the pitch. I just believe the the infra costs here are so high and and and the incumbents this is like if we've been talking since this show started what if cla what if anthropic and opening I actually built apps okay and in the entire history of the show they've only built out outside of um codeex and cloud code they've
32:15really only built half an app claude design which isn't even really a fully an app okay here is meta building the app they have the LLM they have the cost advantages they have the speed advantages they They have more available compute and GPU and all of it than anybody else in the world. And they're building the app. This is the threat that every VC worried about. And we all got a hall pass since the start of AI because the LM didn't build any apps.
32:40This is the one that they're building and um that's why I would not I I just don't want to compete against this because I do think for the next 24 months it's a big priority. And it's just it's just if it's Harry already said instinct is slow. That's a sign. That's a sign of compute cost of other. That's why they have to raise a billion.
33:00And can they subsidize with venture capital $5 to $10 per user per month?
33:04Sure. But if they have to overmonetize it, what if it they become poolside?
33:08They could become the next poolside. Like it's great, but literally I've got 10 million users at 10 bucks a month.
33:15Now I've got a $1.2 billion nut a year to pay off. And um I I'm struggling to raise the next round. I'm not data brick. So just I worry when the incumbent has infinite all the capabilities here and wants to build the app. That's why I would say no but I might be wrong right I I might be wrong.
33:32I wouldn't bang my fist on the table at the I'm trying to remember was it Socrates as or who was it one of the ancient Greek philosophers where you could literally say take one side of the argument and then halfway through you could say now take the other side of the argument and Jason clearly can do that here right that was a perfect this is why you should write 200 put me on the spot I don't put you on the spot but I I'm just impressed with the mental facility which which you can do both sides it's terrifying it's like a human LLM you can be convincing on whatever you want me to be it was
34:00pulling the boat together. I actually think and I want to take the post out on that. It said what you basically said is this is core to meta and it feels like something that they would want to do and and despite your comments on crossplatform you know today Muse is a standalone app so it's not a crossplatform issue but to the extent that they fold it into I I've just got to assume they're going to make it accessible in Messenger make it accessible on you know iMessage etc. But
34:29it seems to me if there was one thing that Meta should do within the world of AI, it would be this. It's hard to imagine spending, you know, 100 billion plus on AI, saying that we're going to build the personal AI and then not putting all your effort on this. So, I agree with you, Jason. I think this has to be an all-in meta bet in a way that frankly I reject the comparison with Slack. You know, the the Facebook for work product was like a toy. It was not a core issue to them. This is a core
34:58issue. So I think you're right. They go for hook line and sinker. Now the interesting thing about the poolside analogy in the pool sale analogy and instinct is you could have the same outcome here which is poolside said we ran out of capital to keep playing but we had an excellent outcome because there was a company with an even bigger market cap who wanted the assets that Pool Hideside has assembled. Nvidia wanted access to the model, access to the talent. I mean let's put it out here. Same thing could
35:26happen here which is that instinct executes build a huge user base and an open AI steps up and it's interesting I think that the founder of instinct um either worked at Sierra or Brett Taylor's a big fan of so you can fast and Brett Taylor is obviously among the many other things that man does is the chairman of open AAI it may well be that instinct builds a lot of traction doesn't have a cash flow positive IPO potential but has a very attractive
35:55upside exit. I don't discount that. Maybe 10 billion's a little lofty, but you got to believe if it got meaningful differentiated attraction that it would be interesting to someone who wants to build a business in this space.
36:09The only thing I will say is Noah Shin, the founder of Instinct, from every single person I've spoken to, they cite him as like one of the most generational talents. And in a world and and in a world where generational talents in strategically attractive segments are very acquisitive to multi- trillion, you can see that being a very legitimate upside scenario case for 50 to 60 billion. As crazy as it sounds,
36:38it's possible. It just as it I just think if as a listen, we all have different experiences. The way I was raised to invest in venture was don't take bets that 100% require an M&A outcome to be successful, right? They're just too they're just too unpredictable.
36:53I've been on the other side and know how capricious it like, you know, you could be Clem's best friend. He brings you in to meet with Jensen and then he quits the next day, right? I mean, you just you literally you you literally just can't predict it. So, it's it's just you you need some real something to steal to make a bet where an arbitrary super high value outcome is the only plausible exit. I'm not saying it's not a bet.
37:16Like, it is definitely a bet, right?
37:18It's just I I agree.
37:20It's a big one.
37:20And and just to come back on that cuz I've been thinking about that. You're right. It's not what I do either, but I look at this and I do, you know, you always question yourself. Is there anything you can learn? There is an argument. I'm not yet making it, but I'm just acknowledging that the expected value of a number of those bets could be strongly positive. Admittedly, the variance is high. In other words, it's a risky way to make money. You should ask yourself as you're building a portfolio of 30 bets, is it okay to have three of those bets in your portfolio? Probably
37:50not at 10 billion, but right, it wasn't reckless. I think Kleiner did the round at 500. Mimoon's overshrew. It's not reckless to do around at 500 even if you believe the expect the profile the payout profile is you know two in 10 chance of a 20x positive multiple right and if you don't get the positive multiple you're going to build a company that just can't cash flow and doesn't make it you know the it's it has you got the right portfolio and you can
38:19take the risk it's not the way I will run my business but I'm I actually I in a bull market or as Harry said there's a whole bunch of upside acquirers with frankly free you market caps that are fairly untthered themselves and have a massive need to move quickly. It's actually not a crazy way to make money. Now when a you don't even need much. You've got a billion and a half prof to reach. So like your downside is relatively capped on an incredible team that everyone
38:48acknowledges is t industryleading. If you look at I mean this is the classic Silicon Valley thing is that if you look examine that risk return profile at 50 pre which was as far a go back as April I think that's a wonderful pre profile at 500 pre which I think was the May or June round that's interesting yeah that's a good bet cuz a little further along the interesting thing is in the space of two or three more months you've had around is was the other round the two billion Harry from memory I
39:182.5 billion now you're getting into the it's a 4x if you get out of the billion and now you're raising a 10 now you really need that 50 or you know you need a a reminder the largest M&A outcome ever was cursor doing 4 billion got 60 billion right I don't know if you get a $40 billion outcome without a [ __ ] ton of revenue my point is the risk return profile was wildly attractive in April
39:47and decreasingly unattractive fairly quickly right by the time you come to September. So that is the problem with those kind of bets. But you know one interesting thing though is just like the consumer product market fit of this product is so wild. I did an Instagram reel on it. I had over a thousand DMs asking for invite codes. I've never had a thousand DMs on the back of a reel.
40:09That's that's pretty wild.
40:11It's awesome. No. Um um and I got to say I've been Can I just add one interesting thing?
40:16Yeah.
40:17Just on your on your thing. You know, Alex Kurlin just uh left to go to Menllo Ventures, right, from Techch. He was on the board of owner with me. Known him since the very beginning. It's OG Saster when he started the industry. And he wrote a little presentation about how Menllo thought about this and and not that this is so profound, but he said kind of that they're targeting 25 billion plus tech tech exits. They're they're targeting a hundred of them. That's how Menllo's modeling the world. And that's when he went to join to find you know some of these hundred not all hund they don't
40:46have to be in all 100 of the $25 billion plus exits right um that's the model we we can say wow cursor was at 60 but cognition just raised at 48 right so if this is your world model that there are a total of 81 billion 8125 billion tech companies now but that's up from 23 10 years ago and that that trend is going to continue in the age of AI um you know I wrote that the new decacorn is 25 billion these these instinct grounds make sense like if if the if the if the if the good exits are all north of 25
41:15billion then at least I can make three acts on instinct right um it was just interesting to see that's their model right is that we're targeting $25 billion plus exits uh in any investment that we do and we see there to be another hundred of these now how that all math works out with GDP and the market caps of trillion dollar companies I need to defer to to Dr. Rory O'Driscoll next to me because I can't make it work in my head without an LLM.
41:38But I assume there was some thought behind the memo math here of $125 billion exits.
41:43We're going to go a layer up and just a little excursion out of like deliberate AI which is mirrored one of the um hailed names from 2021 that raised at 17.5 billion um interactive whiteboards for teams for people that don't know. sold to Bending Spoons, the Italian juggernaut that buys everything, uh, for $1.3 billion. Um, as I said, it's a long way down from the 17.5.
42:11We didn't, well, Paul, my partner, who is very intelligent, did an analysis of it. Excel made money. Um, founders and employees made money. Later stage investors, eh, not really. Well, not at all, actually. One X. Um, how do we see this exit guys for a darling of the SAS ecosystem?
42:33Inevitable and not bad, right? Inevitable because, you know, funny I have a little report on our Salesforce that literally lists every unicorn, right? And I can do it a bunch of different ways. One of them being literally by post money, right? So you and I'm I'm I just eyeball down and you see what's going on and you know it, you and you just rank them and it jumped out of you like a sore thumb. The last round was in 21 at 17 billion. And when you eyeball, you know, you you you start
43:01to see the Lori, you start to see the levels, you start to see all the cognitions just above them and just below them, you know, new rounds at you 1020 billion. You see we track headcount grow at the same time. Oh my god, headcount's exploding. And then you have the thing stuck at 17 billion and it was really the largest utterly stale valuation from that period, right? So you look and you go ah almost inevitably you're high and dry because you're a personal productivity a
43:30productivity tool in a world that just doesn't work that way and can I it's it's obviously way ahead on valuation I mean of where its actual market size or traction can be. So this is just an inevitable that at some point it would get done. I mean Andrew Reed from SEO had a really cute tweet. it like a little graphic of you know that picture of the the death with the with the the sickle knocking on every door and it
43:57knocks on the um Evernote door and then it knocks on the air table door and then in this case it's knocking on the mirror door and instead of a sickle it has a bending spoon right you know death comes for us all in SAS land right and it was exactly right it was just an inevitable cleanup operation because it was just so far wrong in terms of pricing and it was a good outcome for everyone. And I and I you kind of snidly said something about the latest stage guys. But I'm going to say something. The great thing about the
44:27latest stage business is this. If your losers give you a 1x then you'll die rich, right? So Iconic, I think Iconic had a ton of money in that deal, right?
44:37So that's a bad deal. A bad deal is when they get a 1x. You know, if you're playing the venture game and because you're playing late and your preference gives you 1x and everything on on the worst case outcome, by definition, I mean, just using simple math, the overall distribution is net positive. So, it was a good outcome for everybody.
44:55It needed to happen. It's now part of a liquid asset. I think interesting. I didn't know this until today, so I'm winging it a little. I did see some portion of the consideration rolled. In other words, some people said, I'll take I'll take stock and bending spoons for that. which is interesting choice.
45:14Yeah, I don't know whether it was required or whether it was a way to juice the outcome, right, by rolling it over. You could see it being either way, right? Bending Spoons needed the C, you know, they don't have they don't have an unlimited balance sheet. There's only so many murals they can do, right? Um but it could have also been to roll it could have been a rollover into uh a company on a positive run, right? The cynic in me says it's interesting if you do roll.
45:34It's like basically saying we couldn't do what it takes to turn this company into a cash flow positive machine. So I'm selling it at three 2.7 times to guys who are trading at 14 times cuz they are tough enough to do what it takes, right? Cuz that's really what's happening. And to some extent, even though that sounds [ __ ] it's true.
45:54Venture syndicates, I've been in boards where the company just flattens out and it needs to get ruthlessly efficient.
46:00Venture, it's just not our DNA. It's not how we roll. It's a syndicate of five different people. Often times these assets are better owned by a single owner who said, "Look, this is the way it's going to be, right? This is what we're going to do." I mean, I don't know if you saw the CEO of Bending Spoons, he made a wonderfully controversial take, right? Where he said something to the tune of, you know, we don't really like to, you know, we don't basically get all excited about the title founder, right?
46:24We don't want to know what you did. His basic comment is, we don't want you to know what you did 10 years ago when you founded this. We want to know what you're doing now, right? And what it's basically saying is we can't do what it takes to fix this thing at 3x revenues.
46:37So we'll sell it to you for 12 times revenues and you'll be val we'll sell it to you. Take your stock at 12 times revenue cuz you'll be hardnosed enough to cut extraneous cost, raise prices, accept a fair amount of churn and plow through. Right? Just interesting but also not qu. It's kind of an interesting comment on how institutions can determine outcomes. It's not all rational economics and it probably makes sense. Bending spoons will probably do a better job than a venture syndicate at
47:05making that thing cash flow positive. And if you're a customer of any of these companies, just be ready for the 40% price increase.
47:13Well, that's the churn. The churn on their acquisitions is brutal. When you actually study the graphs on usage, the churn is absolutely brutal. They are not revitalizing these. They're increasing prices and cutting cost to the extreme.
47:27I would say what you're right but let me describe it a different what they're really finding out is the marginal propensity to pay versus how much the VC we probably almost certainly as an industry overinvested in sales and marketing and sold people who have to be sold into the product. What they're saying is I don't want the customers who have to be sold into the product. I want a customers who hate us so much for doubling our prices but still need this product and won't go away. Right? It's a
47:54different worldview actually cuz yeah, you're going to get initial churn when they put those price increases, but the the perspective is the people who stay really need the product. You know, this is like what happens when you have to pay full bolt.
48:08Yeah. You triple the prices and you have 30 to 40% churn. And the math's pretty straightforward, right?
48:13Absolutely.
48:13I'll tell you my thought on on the mural one. It it it was I almost want to move on. I What's the game Duck Duck goose with kids where you and don't you take out a chair each time you go around? Yeah. Yeah.
48:23I felt like there's only like one or two chairs left from the pre prei era and and Miro took bending spoons looks they said in one of the interviews this week uh they do a thousand they look at a thousand targets seriously and do five to 10 a year right and even they are do not have an unlimited balance sheet everyone PE is sitting out Bravo is mostly sitting out these folks so I feel like there's one or two seats left for a thousand unicorns and we can talk about why that why Aana got one X back and like like if
48:52if there were like a lot of options. I felt like it's different. There's like two chairs left at the end of Duck Deco. Miro grabbed one. Okay. They they and they got just like Air Table you they only got one offer. When you sell for 2 point something X, you know for sure there was that there was no other offer because anyone can pay 2.4x or 2.5x.
49:11It's not much more for Salesforce or to Bravo or Francisco Partners outbid. So you have two and like for what it's worth I almost want to move on because I can tell you personally I've I've ended the game for me of duck duck goose. I'm not running around the chairs anymore.
49:26Whatever. It's fine.
49:28Final one. Who who's next then?
49:32No one. I don't think look there of course there will be more deals but it's but I think we've entered the era of capitulation and if there is a seat left in Duck Duck Goose grab it. Grab it. But otherwise, the game's just ended and these companies are going to go into zeroenter mode. They're going to go into zero to 5% growth mode and no one no one may buy them. Like because if bending SP this is like this is the best Miro and Air Table can do. What if you're not Miro? These are not bad companies.
50:00Miro's 600 million in air are still growing high single digits and cash flow positive. Like it's a pretty good asset, right? Um, so anyone worse than Miro or Air Table is not going to get one of the last one or two chairs. They're just they're not even going to just no one wants to buy these things. And I I don't mean to be grouchy. I just mean I've just given like kids go do whatever you want. Here's the keys to the house. I've moved to another city. Have parties, you know, crash the cars. Do whatever you want because uh
50:29boys moving on. What What would we like to do next? Jeff Dean's company hitting $50 billion after just raising at 10. We've got we've got Catrini selling his company to Dylan Patel and Sammy Analysis for 100. We've we've got Open AI pausing pro signups.
50:49I mean, I think it just is SPF getting out.
50:55Well, I mean, he's got to take accept his Midas list, doesn't he? Like what's that? He didn't have to accept the artist award.
51:06He might have even been on the under 30 under 30 or something when he got it too. When he did the anthropic deal, I think it was under 30.
51:11I'm going to be the voice of humanity. I mean, yeah, he, you know, he is doing significant time, which really sucks and that's a life wasted. So, I'm not going to pile on on the guy yet. Right.
51:21I think the Supreme Court's going to take the case and overturn it uh narrowly say non lawyer. I don't think you No, because I watched his lawyer on YouTube. He was pretty good who's done 50 cases Supreme Court. He's like a badass like Supreme Court lawyer.
51:35Basically, his and listen, I'm not the I'm not the total argu amendment issue. You can't find somebody $12 billion. This is unconstitutional that can't repay it when at least at least according to the terms of the bankruptcy court, everyone was repaid in whole with interest. We could argue whether they would have made much more money, right? But there there are some constitutionality issues. I think he's going to get his day. I think the Supreme Court's going to take it. They don't have to take any case. I think he's going to get it. Um and you know,
52:04whatever he's in jail for, 30 years and 11 billion, I think it's, you know, Sam may be freed eventually. This is get the Supreme Court hearing the case is a far cry from being freed, but I think he may have You think he should be freed?
52:15I mean, he seemed like the biggest scammer of all mankind when what was this all way back in 2023?
52:21Yeah, right. It is weird he didn't enrich himself as far as we know materially right. It is weird that argu this is very arguably very arguably it's of course terrible that he's he he moved assets between Alamita Research and and it's terrible but the argument that it was allowed by terms of use is an interesting argument right it is it is an interesting argument he did not self-enrich the reality is if you if you use a generous version of made whole
52:50folks were made whole should he go to jail for most of the rest of his life and have to pay 11 billion when he get out it it's It it it seems like a lot in the era of cension AI that could kill us all. It does seem like a lot today, but at the time, you know, Silicon Valley Bank failed. I lost 10 million over the weekend. I don't know about you guys. It seemed like it was just desserts at the time, right?
53:11Yeah. For for what it's what one I hadn't done on this cuz it wasn't on the list. And I don't like a P my wife who is a lawyer gets mad when I practice law without a license. But I will say it was so low down, Harry. I didn't think we'd get to it. You never do. Oh, there we go. It wasn't on the list.
53:27Genuine comment. Genuine comment here. I look the separating the fine which there might be issues of doesn't matter. But there was misallocation of funds. It was white collar crime. It should be punished. I actually think 30 years was probably disproportionate with the I mean I think what was it? I'm trying to remember the ex Goldman Sachs guy who misallocated um in brokerage funds in MG brokerage and about 10 or 15 years ago.
53:52I mean, I think I think he walked entirely. I can't from memory think I think white collar crime should be punished and it's a shitty world where someone steals 20 bucks and they go to prison and someone else steals $10 billion and they don't cuz they're white and upper middle class. But I'm also not sure 30 years is the commensurate thing. Now, the interesting thing is that's not the issue at hand in the Supreme Court.
54:13I don't think they're appealing the sentencing on the sentencing guidelines issue. They're appealing the facts and circumstance of the case. So, we'll see, right? Um, yeah. And I don't think it matters that he the fact that he took the money and was a brilliant investor doesn't excuse him for taking the money because by definition if it worked and anyone could take money provided it worked. Hey, I stole your money, Harry, but I bought put call options and the stock went up. So, we made money. Here's your money back. You shouldn't mind.
54:40Well, of course you're going to freaking mind because when you took the money from you, you didn't know what the outcome would be and there was a 50% chance it would go down. So you're going to want that guy punished because you're going to want that behavior stopped because you're not going to want the next guy to think they can do it. So it doesn't matter that he was the most brilliant genuine the most brilliant equity investor of our generation between Entropic and Cursor. It just matters if he if he took money and if that was against the rules and I haven't heard the terms of service argument Jason that will be interesting. If he took money it was against the rules then he should be punished. If he took money
55:09it wasn't against the rules then he probably should walk and the process will take place. Not my problem. So related to that, what happened to Matt Mullenwig? He was he was out for a day and back. What happened to poor Matt?
55:20Did someone not read the bylaws, Rory?
55:22What happened? Did someone forget to pull the certificate of incorporation from Delaware?
55:25So So Matt Mullen is the founder and CEO of WordPress. Um and he was ousted by the board and then he came back uh and overrode them it would seem and now he is back as the CEO and the power to the founder has reigned true here. He is back as CEO.
55:42Correct. And this is a company automat that has been the steward of the open- source project WordPress which is you know one of the most commonly used blogging and website platforms out there right very successful product Matt's the CEO of the company that manages the product I think it's fair to say that the stewardship in the last few years have been troubled he's been in a big
56:10argument with WP engines about you which where the argument is WP Engine is a hosting company that is hosting WordPress sites and I think automatic wants some of that revenue so they've been pushing WP engines but the way in which he's behaved has been unhelpful to the open-source project because it's kind of like I will use my leverage to exert I will use the leverage of my company to try and frankly prevent other people from benefiting from the open
56:39source ecosystem which seems to be antitheical to the idea of So I think it's been a troubled situation for a while. I think the truth is the real issue is the world is passing that product. It's kind of a sad little thing cuz the world is passing that product by and Jason will be able to tell you that you know you can build most of what you have in lovable with in WordPress with lovable or replet or any one of 10 things and increasingly they are as I've quoted before the Henry Kissinger thing
57:07about academic problems academic arguments the fights are so vicious because the prize is so small the truth is automatic doesn't matter a dam anymore it should try and build something new, but it's it's kind of on the tail end of I mean to Jason's point about it's on the tail end of the tech trends. They should be doing things totally differently to try and survive in the brave new world. Instead, they're arguing internally. So that's kind of the zoom out comment within that context. That's kind of their big
57:35picture. And the funny thing is like all litigations, when you get caught up in the detail of the day-to-day, you forget the big picture. The big picture is this company needs to point WordPress in a forward direction to think about how you take advantage of what's going on in AI and become a relevant player in the next 5 years. Otherwise, you won't be. That's the corporate imperative. Instead, the corporate imperative has turned into a pissing match between the board and the CEO when now it looks like the CEO has won. Congratulations, you've won the poison chalice. You get to keep your
58:05diminishing empire. And it's worth pointing out this is not a board full of evil VCs, right? And I've been on boards as an evil VC where you've had to take a you know replace a founder. It sucks to the end. This is actually a board of I think Salforce is an investor. You have some really good independent board members. They don't need this grief. I'm going to bet what happened like now down in the tactical weeds. I think Jason probably nailed it. You probably have a board. They probably have a majority.
58:30They probably said to the CEO, "We're a majority of the board. We're independent directors. We think we should replace you." And my guess is the founder CEO went deep into the bylaws and says, "You are the board and you can vote to replace me, but I can actually also vote to replace the board. I'm hereby voting." I've seen this once. I'm hereby voting to replace the board. You're all off the board. Oh, look, the new board is me, my pet dog, and my ventrilica dummy. And after due consideration, we've decided I would be a great CEO.
59:00There you go. and all the independent Bman at that point promptly resigned because there's no point wasting your life and getting into a whole bunch of litigation about an ever de this is remember Jason your was it the fortnite island that's continually getting smaller you are fighting to maintain control of an island that's getting smaller and smaller so congratulations Matt you're in charge I feel like going if you are in charge well how about you turn this thing around so yeah that's my takeaway of this it's kind of sad in a way these things happen people get
59:29humans are people get people behave how they're going to behave. I think a lot of other people were involved in that company and put a lot of effort in. You know, one of the guys who Tony was a true ventures did a lot in it early on.
59:41It's kind of a blah situation and yeah, it's been pending for a long time and you kind of just go, gosh, I wish there surely should be more of a win-win here. Well, Automatic would have been a great company if it hadn't raised venture capital because Matt could do what he cared about, right? Which is having a commercial arm of an open source product he created, right? Very young, right? Imagine it's doing 500 million a year, spinning off 200 million. It's like a bigger base camp.
1:00:07Yep. You know, those guys those guys aren't venture backable and they don't give a rat's ass with their 22 Lamborghinis and Panganis and and villas in Italy and they're fine growing 30% at 60 million spinning off 30 million or 40 million cashier. It doesn't bother them at all, does it? This is I I don't know the full funding history, but one could imagine it didn't really need to raise all this money, right? Um a version of it and it might have done just fine. Um it's easy to say, but that might be the one and that might be why Matt's
1:00:36frustrated. It would haunt me as well if I'd got like you know companies do get overfunded boys.
1:00:41Yeah.
1:00:42And and I might be sitting here I'm like I I could this could have been 37 like I could have be like 37 signals. I could be running this. I didn't need this.
1:00:49What the hell did I need this 800 million a bunch of people running around doing nothing all day long. I could have run WordPress and automatic both side by side with 80 people like like DHH and be making a hundred million a year and and and who the [ __ ] cares if I'm growing if this is my mission in life. If you're making nine figures a year out of your company and your growth is 5% and you're happy and you're and you're doing a good deal for the world, who you know, screw you VCs. I mean, first of all, I do
1:01:17agree is that you shouldn't take VC if you're not signed up for that program.
1:01:22I'm also not sure that that's one dimension VC versus kind of lifestyle business. I do think there is another dimension here of the you know open-source business stu I mean so on the first dimension VC versus lifestyle business it's it's pretty clear you should do the lifestyle if you want lifestyle there is another dimension which is open-source community project versus managing just for just for the quote unquote company that controls the open source product
1:01:50and I'm not sure that on that dimension the company's been an amazing steward of the project, right? So, I hear you. I I I think and that's just an initial dynamic, but you could also say to your point, Jason, if you didn't take any venture money, if you initiated the project, if you have whatever source code, whatever um open source right you have under the copyright or whatever whatever whatever leverage you have in terms of the licensing and the copyright, then it's your company. Do what you like. I'm actually I do agree
1:02:20with you is that this is America. If you built the thing and you want to mismanagement, mismanage it and you own 100% of it, you're allowed mismanagement. Go team. That's what ownership means. You know what's tough to I know you want to wrap it up. I just I'm just learning. I'm I'm learning later in my investing career. You got to be effing ruthless to do a venture backed open source company.
1:02:43Ruthless. You really do. Because look what Matt did. Matt did said, "Listen, I'm focused on the platform. This is what I'm passionate about. I'm not so into the hosting, okay? that's a commodity business. I'm gonna let WP Engine do 500, you know, 100 million, 80 million, 100 million, 300 of these other folks do. And you and and there's like I'm kind of into this e-commerce thing like WooCommerce, but I don't want to do what Shopify and Toby did. Like that's too extreme. And so you you end up not owning that much of the revenue in your ecosystem. And and I and I don't think
1:03:11he's mad about the the Woo Commerce thing not being huge from revenue because Woo Commerce actually is ma used to be massive in terms of scale versus Shopify. But I think he's looking at WP Engine. He's like, not only did these guys treat my community worse after the P buyout, which I do think is objectively true, but I kind of want that 500 million now, guys.
1:03:29I wouldn't have minded having that extra 500 million for this crappy commodity hosting that I could do a better job. In fact, we're on their their own product.
1:03:38It's a great product, right? But my guess is it's doing a fraction of what of it has to be mathematically, right?
1:03:43It's like I want that, you know, and so if you're too kind in open source, I think you lose. I mean, if you're too congruent, you got to be ruthless.
1:03:50If you think about a couple of different agenda items that we've talked about here, you know, on the one hand, at the at the trailing edge of tech trends, you have mirror getting bought for 2.7 times and you have a nasty little spat over a decline of a a flat to declining asset in open source land in automatic. And then on the front edge of the thing, you have companies like Instinct, you know, raising literally four weeks ago at two and a half billion, now raising at 10.
1:04:20You mentioned the Jeff Dean kind of spin out raising at 10 million few weeks ago, now potentially raising at 10 billion. Now, of course, a million is not even a number anymore. A million is a unit of account for, you know, home design only. Um 10 billion now raising at 50 billion. the the big picture point it it it's really captain obvious here but it just shows venture so unlike PE is not about valuation and there's not
1:04:50there's not any safe assets it's just you're either in the head of the train in the new new thing and you know everything is possible or you're in the tail end of the train and life is shitty right you just need to you know I was with one of the biggest CIOs the other day and I said you've been doing this for 30 years have you ever seen in a time like this. I'm cognizant that I'm on the younger spectrum. I'm not that young anymore, but haven't seen all cycles. And he said, I've never seen a time like this. This is more nuts than
1:05:18it's ever been.
1:05:20This is unprecedented.
1:05:22I think that's true because I look and I was I was investing only since I love this only since 93 or '94. So, I did live through the.com investing thing and it was pretty crazy because you also had the whole millennial thing about, you know, Y2K and the world was going to end just like now we all have to have a world ending thing. And, you know, let's be honest, New Year's Eve, December 99 was a pretty wild freaking party in San Francisco, right? Half the people were getting toasted drunk cuz they were rich and the other half of the people were staying up
1:05:51making sure that the Y2K thing didn't bring down the world, which was the actual uh worry at the time, bizarrely enough. Right. But it's nothing compared to this. I think the ability of AI to just excite the imagination is just way higher. And the internet was awesome.
1:06:06But AI, you know, you can start talking about the AI. The software is human. You can get carried away. And then the second thing is, you know, instead of existentially worrying about the computers won't work because of Y2K. We now get to worry about the whole world ending. It's all it's the same thing on a way more magnified scale. And the money is 10x bigger. Because speaking of the money being 10x bigger, I sit in in Europe, as you know, Rory, and remind me frequently.
1:06:30Actually, Harry, you don't. You actually sit in England, which deliberately chose not to be part of Europe, but I know what you mean. It's okay. Sorry, that was mean.
1:06:38Listen, you know, I wasn't pro Brexit, but I you're technically right. I agree.
1:06:43Very sad. Um, Mr. Al raises€3 billion euros. It's Europe's largest ever tech round. um they're going to hit a billion in revenue by the end of the year. For a company that's had, I think, a lot of criticism definitely in Europe, this was a very meaningful sign of progression and hope that actually we do have a horse still, so to speak, in the race.
1:07:06What should we take from this round?
1:07:08It's less about being a competitive frontier lab and more about AI sovereignty. I don't think you should take the fact you have a horse in it. If you're saying Mistral is now competing with Open AI and Anthropic in the frontier model race, you and I know that would be [ __ ] I think what you're really saying is Europe has decided based on based on the antics they see from the companies from the companies at the frontier in the US coupled with the dynamics of the political interaction between the United States of America and
1:07:37Europe that a technology as important as this has to have a sovereign European component. And you know, even though it's obviously ludicrously inefficient from any kind of rational perspective, they've decided we just got to make this thing happen and give Mistral enough business to make sure that there's a viable European AI competitor. And it's clearly Mistral and you know, there's a long tradition of Europe doing I mean Airbus is an example of that, right?
1:08:03They said we can't just be relying on the Americans to make planes because otherwise we're a vassal state. And they said we're going to make it happen.
1:08:11France and Germany are going to make planes. you know, and we're just going to do it. And it took 10 or 15 years, but they built a viable competitor. It's probably the same thing here. They're simply saying we can't afford to have I mean, you know, we've seen instances where I think recently, I'm doing it from memory here. I think the US government said to anthropic, "Thou shalt cut off all other countries from Fable." I think it was Fable, one of the most recent models. Cut them off because it's a security risk. And we didn't say cut off, you know, Russia, but leave the
1:08:40United Kingdom and France and Germany.
1:08:41who said cut off everybody. If you're in Europe the day that happened, you said to yourself, "We can't rely on these guys anymore." Right? And the day that happened, you made mistral a viable European competitor, right? Is it going to be as big as us? Nah, it's not going to I mean, I don't think it's going to be as I mean, Airbus has actually overtaken Boeing. Took 30 years, right?
1:09:01But in the short term, it's not going to be any near as big a market cap as OpenAI or Entropic, but it's going to be a winner and it's going to be the European winner. So, thank you very much. politics. If you if you're a if you're a Mral shareholder, you should be very grateful for the current political tactics. It's just made you a couple billion bucks.
1:09:19Also, you know, just to be techn I mean, the rounds led by Samsung, right? So, they're generating, I think, 200 billion of free cash flow a year right now. So, three billion like I don't I I don't know if I take the markup. I mean, I guess I would take the markup, but you could argue it should have an asteris and a dagger next to it because is it really real if it's led by Samsung, right? Well, and the last round was led by ASML.
1:09:41Yes.
1:09:42Yeah. I don't know if those count.
1:09:44But the the money counts. I I agree.
1:09:46Look, the valuation the money counts, but I don't know if the valuation is is connected to any re like we should that it's the same as an objective valuation done by financial parties. I just it's just But there is some intrinsic value to be like, you know, if I mean, let's ask what the I mean, brutal comment. If the American winners are worth a trillion and the European GDP is roughly 70 80% of the American GDP, I don't think that implies to be clear 800 billion, but you
1:10:15might get to 30 40. It's it's not a crazy end state. But I agree, Jason. It feels like your problem. I don't think they did it on the basis of market comps and compost. I think they did it on the basis of state strategically.
1:10:28Boys, is there any others that I've missed that you think we should do?
1:10:32Jason, any comment on Adobe LinkedIn, new CEO taking over. I saw the results. Any any thoughts? Because you're the you're the Adobe expert here.
1:10:39I I think it's great. You take you take two non-founder folks slowly leading different business units into no growth and you you pick from you pick from the lesser of two okay leaders. I mean, you know, I I I I I I think it's just Miro at scale, but with so much scale that it it survives, right? It's a you know what it is? It's a reminder that Miro didn't in today's You know what's funny? If when the three of us met, I told you about
1:11:08this $600 million company in collaboration. We would think that was scale, right? In the old days, it's not scale. Adobe has scale. So even if Adobe isn't really making the right moves in AI and it can't really afford it and it and and it's and it's just moving the deck chairs around for its co team where the CEO said like a year ago Shanu said he's going to retire and it took him a year to to decide which of the two internal candidates to promote. I mean it's pretty bad. Um I think it's a nothing burger. It's a it's a sign that nothing's going to change. You know what it is Rory? It uh I mean I could add one
1:11:37less. It's a sign just nothing nothing's going to change. It's a sign of capitulation. It's a sign that we're going to just keep bull bulldozing our way through the world the same way, right? Uh versus really changing super high margin, bleed our core products, um add some imaging from with AI and kind of call it a day, right?
1:11:56I broadly agree with you and it's interesting. They did the, you know, we're not leaning into ARR growth. We're leaning into getting free usage and that was the play they did in the '9s.
1:12:05That's their fake AI metric of the week.
1:12:07And that's where I was going. I I think you know because this is where I reason I asked you is that's a playbook that might have worked two or three years ago but to your point now what you're basic because the net new AR went down significantly in other words the growth of new AR didn't happen. So they have their AR AI AI AR metric went up but overall ARR went down and you know what that means is you just channeling some into the good thing but yes you at least with the program that you need to win which is the start but you're not winning cuz the Jason rule which I go
1:12:37back to if it ain't growing you ain't winning. If people ain't paying for it, you ain't winning, right? And yeah, they have scaled. They're not going away. It you 25 billion in revenue, whatever. Um, but yes, I there was no news here, which is interesting because overall it's been a pretty good few weeks for software in general. I mean, you've seen big jumps and thing. I said huge jumps in the cyber stocks, big jumps overall in worldcloud and the entire SAS apocalypse has been unwound. But I think Jason to your point what's been happening is
1:13:06there's been a real distillation of oh these kind of businesses aren't going to be winners they should stay low and then these kind of businesses are doing super well and you know Adobe is in the first more in the first category than the second so boys their market cap today is 105 billion yeah about 100 billion 25 billion yeah exactly kicking off cash in three years should buy them just for some extra revenue side in three years time what is their market cap
1:13:35120 130.
1:13:37Oh wow.
1:13:37Same as today. It'll be the same as today.
1:13:39Plus, you know, it's not going away. It basically again from memory you get to that it's a sub 10 times cash flow multiple Harry. So unless it unless the AR evaporates not just doesn't grow but evaporates. You know you can get there on a cash flow multiple but it won't be you know but you'll have lost relative.
1:13:58If Jason's view of the world the men view of the world is correct. If there are 10 or 100 $25 billion plus outcomes, which by the way, I don't think the point your relative significance will go down. I mean, you know, I couldn't tell you HP's market cap now to save my life, right? Because it doesn't matter, right?
1:14:15And that's the same thing. You just you'll do fine. You'll cash flow positive. Maybe if you find the right leader in the right product, you'll reignite growth. You know, your trajectory is not to blow up, but your trajectories to trade are eight or nine times cash flow.
1:14:28Well, that's the way it was for decades.
1:14:30Adobe stock didn't move for for a decade. It was traded on cash flow. Sha new was amazing of that. Then cloud worked better than anyone expected and either they're going to run that playbook for another decade or they'll have some magical AI thing that even Canva hasn't figured out. I'm not betting I'm not betting on it today, but they you know I I was there when cloud happened. They didn't expect it. They they could have a killer AI app that just we're early in the AI thing. So would you rather invest in Canva or Adobe today?
1:14:56I'll tell you why. You just can't invest in C. I want Canva to win very badly, right? I I love him. He you just can't be not growing. Like Service Titan got destroyed for lowering guidance. Fell 30% last week. Okay. I think Canva fell 30 or 40% this year when they had to lower guidance, right? Maybe more.
1:15:15To be fair, defending, but you got to grow. But you but but you got to you got at least Adobe is going to get to this stable plane. To Rory's prior point, it's going to get to a stable plane. It's not impressive, but it's going to grow six or eight or nine percent a year with lots of free cash flow, right?
1:15:31I'm going to give you the numbers, canvas numbers, right? They are growing. They're growing 20%. They they they were growing 30%. They're growing at 20% now. And I know that because in Australia, you have to file your revenue with the columns. So, but it's not But that's a big deceleration.
1:15:45Agreed. So, they're not it's not that they're not going they're decelerating.
1:15:48So, I actually So, are they are they entering are they entering uh DCF world or are they or are they still a growth stock? Are they growth or value?
1:15:55Okay, I'm going to agree with you now. And the only reason I interrupt you, Jason, say I didn't agree with you and you said they're not growing. I want to be precise because they're decelerating.
1:16:03Their growth is now is really the insightful point. Seriously, I want to pause on this because it actually comes to a lot of different things. Going from a growth story to a value story is really tough, right? You go from a revenue multiple to a eBay multiple. I think is it go don't pronounce guys he hit a really good point post on Twitter recently where basically above 30% growth you can use a revenue multiple below 30% growth you have to use an eba multiple it was very insightful comment
1:16:33it basically said if you're growing fast everything is forgiven and you'll be valued on a revenue multiple if you're growing slow nothing is forgiven and you'll be valued on an IBADA multiple or something or a low revenue multiple right it's just a different world right and I actually did I remember I did a post way back your box when I as a public company it went through that transition and came out the other side but it takes three or four years because when you go from six or seven times revenues to 20 times cash flow you got to get that cash flow to
1:17:0230% just to hold the stock flat it's brutal it takes and did that take forever and this is going back to the point is I think Canva is still growing very nicely but it is the accelerating and even though I like them and I want them to win the founder lead whereas Adobe, as you say, is at this point exploiting me every time I buy their product. I load their licensing system so much. The hard truth is this. If I had to go through that transition, if you're when you're going through that
1:17:31transition, it's hard to get to a public offering. So, when you ask about the two stocks, Harry, what you're basically saying is, would you like to own something at eight times cash flow with 13% growth where at least you're liquid, or would you prefer to own something at 20% growth, admittedly de accelerating?
1:17:48The question is, can they get through the liquidity window? You know, price clears all markets and there's a relative I mean, I think the interesting question. Yeah. It's how you think about relative valuation, right? But I just think the having to go from the growth valuation world to the valuebased world sucks. And doing it while private is hard cuz it takes a long time to just get through that nut. And during that time, you're
1:18:17standing still, right? I mean, it sucks doing it as public, too. It just sucks doing it in general because you get a different investor base. You have different dynamics, but it's just a hard role to hold. And, you know, it's it's the risk of being private for a long time. You know, Stripe avoided that risk cuz they reacelerate. And I really hope Canva can find a way to reacelerate, too, because I want, you know, the good I want the founders to win. I want good guys to win. But, you know, if you look at it, if instead of Stripe reacelerating to 40%, they'd accelerate
1:18:44it down to 20 and 15, then they, you know, I mean, they still have they have huge cash flow, so they no matter what, they're fine. But it's just interesting slowing growth, getting to and being valued on a cash flow basis is a profound adjustment in the valuation metric.
1:19:01Oddly enough, as I think about, Stripe is the only guys who could weather that storm because apparently it kicks off so much cash. Good job, we got to go. Let Jason be a superstar at Dream.
1:19:10Oh, you are. I'm sorry, Jason. You're off to be a superstar.
1:19:13He's off to be a superstar with Mr. Mark Benny off. Yeah, he's the star attraction.
Insights
20VC with Harry Stebbings
https://www.youtube.com/channel/UCf0PBRjhf0rF8fWBIxTuoWA
- David Sax’s commentary: The 20VC panelists called Sax’s point one of the week’s best: if an AI company presents any material risk of exterminating part of humanity, fixing the problem or shutting the company down is the CEO’s responsibility. The discussion extended that logic to systems a company cannot control: either manage the risk or stop building.
- Twitter post on AI’s dual-use risks (creator and URL not identified): A panelist called it “the best thing I read” on the subject. Its framework is that every positive AI capability has a corresponding harmful use—for example, superhuman coding can enable hacking, structural engineering can enable finding flaws, and drug design can enable novel poisons. The post also argues that open-weight models effectively lack guardrails, allowing harmful versions to escape.