all right everybody welcome back to the

number one podcast in the world the

Allin podcast with me again today jamath

poaa your chairman dictator how you

doing brother how you feeling doing

great Fresh Off The Holiday Spectacular

oh good times and then uh getting ready

for a little ski you and I will be doing

a little skiing together with Friedberg

that'll be quite

nice freeberg I don't think you've skied

with me and Jason Jason is an excellent

skier I mean I've heard his for have I

you Jason I don't think I have his

brother is excellent too they're both

Josh the black bomber is good yeah yeah

shout out to Josh the black bomber it's

gonna beas's got those hips he's got

he's got skiing hips they kind of shift

left right right yeah child it's kind of

like when I the hips are wider than the

shoulders yeah it reminds me of I went

to the Tom Ford uh out I went when I

went to Tom Ford to get my suit I'll do

that in just a second but with us again

of course you're cackling Sultan of

science freeberg how are you doing have

you guys seen that clip of the guy with

the fake bum that runs around the city

yes with security guards it's like some

sort of a crypto put on or something

it's hilarious this guy he's got like a

big Brazilian butt and he just runs

around in tight Tac you find a clip of

this guy oh my God it's so ridiculous so

funny all right with us the cackling

with his afterlove from the Holiday

Spectacular let's call it what it is

it's the Christmas Spectacular we're

going to pick a side freedberg how did

you like our Christmas why are you being

anti-semitic bro how dare you how dare

you you can have the Hanukkah special

with your two specials and now with us

in The Red Throne it's fit Sachs it is

stylish Sachs it is goes to work every

day in Venture Sachs his name is Keith

raboy how are you my brother welcome

great great Jason thanks happy to be

here you know it's great being more fit

and more fashionable with socks is a

pretty low bar yes so I'm really excited

to drill

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let your winners

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ride and instead we open sources to the

fans and they've just gone crazy with it

queen

of and as we love about you you've got a

little American exceptionalism Supremacy

dare I say you don't f with dictators

that's true you with them yeah I don't

really love dictators they're not good

for society they're not good for America

but you know it's not always America's

job to fix all of that all right well

listen what about running companies

should company CEOs be dictators Yes

actually um so I believe in the founder

mode the Brian chesky founder mode I

held a conference in New York recently

that Brian was nice enough to speak at

called hiring the art of hiring for

founder mode so specifically for people

who subscribe Founders that subscribe to

that view how do you hire people and how

is that different which you would hire

in a standard you know monstrosity of a

company like Google or something yeah

good founder mode in New York by the way

just history if I remember correctly

lots of good founder mode in New York J

do you want to give Keith's background

the of course went to Stanford with the

boys saaks and Peter teal went on to do

PayPal he had a stinet square he started

a bunch of other companies Founders fund

he work he worked he he went to LinkedIn

that's how it all started LinkedIn was

pretty key like re left PayPal started

LinkedIn I joined him so yes that's true

and then after that I went back with

back stion from PayPal days to slide

which is on the as of History we don't

have to talk about that but then uh I

did jump into square as the 20th

employee and helped build a pretty good

company yeah and then Founders I got

Lac you know became lazy you know

decided to be VC in 2013 spent six years

at Coastal Adventures five at Founders

fund the last year almost last year now

before we jump in I actually have a

question for you starting already how

does that happen Keith how do you you're

at Founders sorry and then you

get what like what pulled you to go and

work with v note and then what pulled

you back like how does that process work

because these things are typically meant

to be sort of forever jobs that's true

so I you know had the benefit of having

the note on the board of square which I

think is typically how Executives uh

wind up turning into VCS is you forge a

relationship with board members so like

for example Roa B who runs tooa had Mike

Mor on his board roaf was our CFO at

PayPal and Mike recruited him so that's

a very common same thing Ravi at Sequoia

today was the COO and CFO of instacart

again same thing Mike recruited him into

scya so I think that's typically uh how

people become VCS I always knew I wanted

to be a VC since 2003 I was a very

active inial investor as you know even

when I was was you know concentrating on

all these other jobs I was writing a lot

of checks and so anybody who's writing a

lot of active Angel checks probably has

in the back of their mind one day I

might want to be a professional investor

we could talk about the merits or

demerits of that but like the goal was

pretty clear in my mind and then at some

point I think you have to make a

decision what do you want to be in life

um you know venture has long time

Horizons it is a job for life like 15 20

years is pretty much what you have to

commit to so you don't really want to

start Venture when you get to old

because 20 years you know you'll be like

Donald Trump age yeah so I can run for

president I can run for president in 25

years or something Keith why did you

leave Founders fund to go to kosa so

kosa was great I spent six years there

the truthful reason why I left it's kind

of funny given covid and how history

changed is I hated commuting a sa Hill

Road every day we were one office period

in office every single day and I felt

like the future of investing was more in

sanan Francisco than in paloalto at the

time and I just despised sitting in a

car 45 minutes each Direction turns out

you know Co changed everything how

people do their work like we're

recording this by Zoom before covid we'd

probably all be in the same studio

recording a podcast like this and so but

the node and the team was very

inflexible about it and Founders phone

was located in the city obviously I knew

Peter since College as Jason alluded to

and I decided that you know it was

better for me I remember talking to Sam

Alton

and I said am I crazy for changing funds

mostly on a commute basis and Sam said

you're human and every single study of

human happiness is it's inversely

correlated to your commute time it's

like there's nothing wrong with being

human in any event there are a lot of

similarities between FF and KB both are

great funds that have put up you know

incredible returns have funded iconic

Founders and companies but they're very

different KV is involved as early as

possible and FF is a momentum investor

and is maybe the best in the Planet as

at being a momentum investor so almost

every successful investment of Founders

fund over eight funds was invested at

$500 million or more in true valuation

and almost every single investment at KV

in eight funds was like the seed or

series a investment with very few

exceptions ever and so andreil and ramp

were the only exceptions at Founders

fund and at KD The Only Exception would

be stripe which I led in you know 2013

or so which is an order of magnitude

higher valuation than any KV investment

initial investment ever so KV is much

more an input driven organization

Founders funds much more output driven

and you know there's great technology

companies that are input driven think

Amazon apple and there's great

technology companies that are output

driven so you can choose but certain

people are going to be better in some

environments and other people are going

to thrive you know in other environments

i f in really really well at KV you

enjoy the early stage you enjoy year

zero year one year two

I'm very good at it you know I think I

prefer to invest as early as possible on

a keynote deck only like if I meet a

founder and there's a keynote deck

there's no product there's no metrics

that's my sweet spot because I also know

nobody else in Venture is good at that

nobody else is still active in Venture

what's the secret what's the secret from

a key note to a check it comes out a

Founder assessment at the end of the day

the only data point is is this founder

capable of building an iconic company

period And I prefer to compete when

there's no metrics because you all the

metrics are going to do is confuse you

that said there's a lot of investors who

are very good once there's product

metrics Financial metrics and so I have

to compete with people who are pretty

good at what they do so I'd prefer to go

as early as possible and then secondly I

like companyb building like I think part

of my role is to help the founder

increase the amplitude or probability of

success and I enjoy that at FF that's

very

controversial yeah ah right yeah the

founder Reigns Supreme and everybody

else is there to get out of the way

right yeah I've had both KV and FF as

investors lead investors in both climate

and at ohal now so I know both firms

really well and it's really I always

people always ask me about the

difference between the two that's always

what I get to it's like Founders fund

they have this kind of Mantra they find

great Founders and just get out of the

way let them run and they don't want to

be helpful that's not their objective

they feel like if they have to be

helpful it's not the kind of founder I

mean Keith obviously speaking outside of

yourself and then at kosla as you know

venod has been extremely and and the

whole team there especially climate and

always have always been extremely

helpful so adding board members

introducing commercial Partners being

like very traditionally proactive

participatory VCS on the board very

different both very valuable when I had

a board issue at Founders fund and there

were some board members that did not

like my strategy had issues with what I

was doing with the company at climate

Corp at the time Founders fund actually

stepped up and protected me and they got

the board the rest of the board together

to protect me uh in a way that was like

actually at a very kind of crucial

moment for the for the business

and as a result we had a massive exit

within a year I saw Brian singerman uh

is leaving so does anybody know which

ambassadorship he's taking I mean the

timing's a little interesting is it not

I don't know he's go compete with our

friend Kenny Howry yeah Ken Howry where

is he off to next hope hopefully some

great destination I'm sure I know we can

all crash yeah something warm this time

okay Sweden's a little bit much swed

I'll send in my wish list for you yeah

let's go like maybe like is there like

Turks and caos or something what about

an embassy tour we should do an embassy

tour this year St Barts do they have an

embassy there St Barts yeah that's a

great idea they don't unfortunately it's

a French protectorate but well you know

what everything's on the table now we

could make them the 51st second third or

fourth state I mean we're in the game

right now Canada is coming on board did

you not want to roll uh in the

administration yourself no you know the

than you I love politics if you you know

follow my Twitter feed I pay a lot of

attention I used to be involved in

politics before I got into TCH however

what I realized about where I am in my

career in Tech is if I stop doing what I

do I'm never going to come back like

technology is rapidly emerging we're

going to talk about all the latest

developments this week like you can't

take your foot off the gas and the

network building parts of venture for

two to five years and come back when

you're like 50 years old and so I felt

like I'm not ready to give up on Venture

I'm in like the prime of my Venture

career I'm only 12 years in actually

chth so figure five 10 more years like

is is The Sweet Spot and so I'd like to

see the companies I was involved in grow

up become public companies Etc and I

didn't feel like I could ever come back

if I quit at some point when I like to

get involved in politics probably yes

but it's a decade out well the

household's involved uh big announcement

your husband Jacob is joining the

administration maybe you could tell us a

little bit about that obviously very

proud of that yeah it's extremely

exciting for him obviously for the

country I think which is he's going to

be the chief economic officer really for

the for the for the country his job is

to build foreign policy from the

business standpoint which if you think

about it what's the foundation of power

in the world it's economic success why

did the United States win World War Two

is we had an economic Engine That Could

outcompete Germany plus Russia plus

Japan we could build more tanks you know

blah blah blah blah Etc and so the

economic engine is critical to this

Administration obviously Trump

understands that we had a great three

years under his first Administration as

he likes to say best economy ever before

covid which may you know may be true and

we need to rebuild American strength and

Jacob's job is to export that you know

philosophy and sometimes you can build

economic strength through working

through Foreign Affairs and so that's

his main job is to be the primary Point

person under

Secretary of economic Affairs and then

they've got a bunch the Democrats and

the W people added a bunch of other

things to the title it used to be just

under Secretary of State for economic

um and they added like a you know

environment and all these politically

correct things so hopefully they'll

subtract all that stuff and just go back

to under Secretary of State for economic

Affairs and interestingly what what's

turning out to be interesting as Trump

assembles this group I love to get the

panel's thoughts on it is not everybody

thinks the same Jacob's position on Tik

Tok which we'll get to in this show very

different than some other people in the

administration and even Trump himself

flip-flopped a little bit on that so

what are your thoughts as we get started

here just

on that assembly of people you know

including saxs obviously who couldn't be

here this week but we'll be on future

episodes there's your announcement folks

what are your thoughts on that the sort

of diversity and opinion in the

administration and how that all sorts

out because some people exem exciting I

think it's very obvious watching from

afar that the way Trump makes decision

is he likes to ask a lot of people a lot

of different questions and then he makes

the decision that's why

to some people the media enem is very

unpredictable is he doesn't just take

one source of input and so you can never

totally predict the output but he arrays

an interesting cast of characters and

listens to them like so for example I

haven't spent that much time with him

but in so far as I have he would go

around the room and ask every single

person a dinner what's your view on act

and literally go around the room of 28

people and listen to every single person

so I think that's how he makes decisions

X being a topic not the website X not X

yeah everybody knows what op I think he

likes X chth any thoughts on this um The

Wider team as we see it get assembled we

obviously don't have saxs here he joined

the team but just your thoughts on the

collection of characters and Executives

here's an interesting tweet that I saw

Nick can you just share it with the with

the guys oh net worth of each one

now the reason why it was interesting to

me was not the net worth per se but I

think this is the first time that I can

remember in modern history at least that

I've been in the United States and

following us politics where such an

enormous number of business people have

been motivated to come and work inside

of the administration and I think that

it creates this very interesting

contrast and compare I think that the

Democrats would never have assembled a

group of people like this even though

the Democratic party has a version of

this chart that they could have made

there's a lot of extremely talented

business people that support the

Democratic party the problem is that

they believe it's deeply

unfashionable to get strong competent

business people to take a pause in their

business career and come work in

government and you almost look down on

people that are successful whereas the

Republican alternative Here If it

creates a movement so to speak so that

subsequent presidents tap folks on the

shoulder I think we'll be much better

off and the reason is pretty simple I

think that the United States economy is

too complicated to be managed by

theoreticians by folks with random phds

in absolutely no working experience in

the real world and when you bring those

people in to oversee those phds I think

you probably get better outcomes so I

hope this becomes a standard which is

ask these very talented clearly

demonstrated successful people with

judgment to hit the pause for a year or

three or five whatever it is step into

government help the country and then go

back and this was what the founding

fathers Dave actually prescribed this is

what they wanted they wanted people who

were in business to do a tour of Duty to

serve their country and then to get out

they were not interested in career

politicians correct I've said this a

number of times but of the founding

fathers had jobs had professions and

they stepped in to serve their country

as a civic duty participated in the

process of executing the the

responsibilities of government and then

stepped out and went back to their

private lives I think it is such a more

powerful model for government than

people who choose to to be politicians

to represent people as a living because

it creates extraordinarily nasty and

incentive structures if that's the model

which is for example to Curry favor With

Private Industry participants and then

go cash that favor in after you leave

and I think that this alternative where

you have people who are everyone looks

at them oh they're all billionaires and

so on they're actually as because

they're independently wealthy and they

have enough money than they'll ever

spend I think Larry pagee once said you

can never spend more than a billion

dollars in your life no matter how hard

you try it's literally impossible people

think like oh you could spend all that

money actually when you buy stuff most

of the stuff you buy are capital assets

that you end up selling later it's very

hard to spend at that level so when you

have people that are truly independently

wealthy their motivation is actually

quite different than someone who's

trying to make it from 100K to 500k of

net worth or 50k to a million of net

worth and I think it actually creates a

higher degree of freedom and it aligns

the people much more in the long-term

outcome of government rather than their

own personal interests and they're just

smarter so I'll give you a a simple

example maybe we'll talk about this

later jcal I'm not sure but when I saw

the doj's theoretical guidance on the

Google antitrust

matter their idea is to divest the

browser and I kind of scratched my head

thinking would any reasonable business

person think that that was the right

remedy meanwhile three weeks later

Google's like here's a super chip in

Quantum Computing here's a Quantum

Computing that breaks the world yeah and

thought how is it that these folks are

so disconnected from reality that they

don't understand what's actually sitting

inside this company and I think it's in

part because they don't know the right

questions to ask and the reason they

don't know what the right questions to

ask is they've never worked in the real

working world we have a professional

class of politicians and and their

understanding is 10 years old but it's

not just politicians this is also

bureaucrats so my point is these folks

need to get off the sideline and work in

a company for a while know the ballot

they'll be much better able to guide

these Regulatory Agencies if they

actually just know what's going on so if

the right answer is some

antitrust issue with a company where you

need to divest wouldn't it be great

where like a 100 smart businessmen

looked at that said that makes sense but

let me give you the counter to that jth

because the counter to that which it

comes up a lot just so you can like

frame the response is why are all these

people coming out of Pharma companies to

regulate Pharma why are all these people

coming out of big a companies to

regulate big a why are all these people

that come from energy companies coming

to regulate energy the common refrain is

business people are basically bringing

business interests into the government

by transporting themselves into these

regulatory bodies versus having career

politicians or what you call bureaucrats

be kind of independent regulatory

authorities so what's the response in

that context to that that refrain

they're absolutely right and that's how

it should work the United States can no

longer afford to be a bleeding piggy

bank for bad ideas so yeah like if a

bureaucrat thinks the right thing to do

is to divest a random browser to fix

Google's monopolistic Tendencies that's

not a remedy or spend tens of billions

of dollars on a super on a high-speed

rail like you were talking about earli

this week this is not logical it's not

meaningful it's misguided so if what we

want is kindergarten soccer where

everybody gets to touch the ball that's

what we are getting right now which is

it's not useful so I would rather have a

business person with a direct point of

view and by the way with the level of

transparency the big issue I guess fre

Brook that that would create is could

these people Advantage themselves

somehow to make more wealth but the

reality is that would be so obvious and

laid bare what happens today is they

burrow at this midlevel of an

organization and they do exactly this

but it's not laid bare yep so I'd rather

be a transparent where some guy tries to

take the government for $500 million and

we castigate that person than what's

happening today which is you slip in the

back door you get paid four 500 Grand

from a company then you come back to the

government then you go back nobody knows

who these people are Nobody Knows the

decisions they're making and they're

altogether misguided because they're not

grounded in an understanding of the real

economy Keith where do you fall yeah

well I share actually you're both right

in some ways if you look at what who's

Trump's picked these successful people

they're not typically being assigned to

Industries they came from so it's not

like he's taking drug you know he's

actually taking the opposite like think

of RFK for

example so actually I think you can take

successful people who have proven

themselves through Merit like I think

what that's one of the other benefits of

the real world is the only way you get

ahead is you're in a darnis experiment

with other people that are comparable

and to be successful you have to out

think outwork Etc and that shows up

ultimately in promotions and net worths

and various other metrics so Trump has

taking a lot of successful people and I

think we want a society where we Aspire

for our kids to be successful we want to

emulate successful people that needs

more that will yield more success like

having Elon involved in the government

will yield more success than you know if

you penalize successful people you'll

get you stigmatize it you get less of so

I think if you transplant successful

people into industries that they're not

from and that they have no interest in

going to after the government you might

get the best of both worlds because I

can see some of the critiques of you

know you're regulating you know your

friends companies and you're going to

make money later that said most of

Trump's people are not going to do that

you can also pass laws like you know you

can't Lobby you can't work for for X

years after there's also this great data

point I think it's in the last 60 years

Trump is the only president whose net

worth went down after office every other

president that you know took a

relatively modest net worth or mediocre

net worth and turned it into the

stratosphere so you think about the

president as the you know signature

example it's great that Trump like is

setting the opposite illustration well I

mean we've discussed this on the other

pod Keith a couple of times which is

domain expertise can be an ankle for a

Founder you know you got a founding team

that works in the hotel business they're

going to look at something like Airbnb

and say this will never work you got

somebody who worked in transportation

they're going to look at Uber and say

that'll never work look at PayPal if

they worked in finance and they did say

to you and the team that's never going

to

work yeah I mean I think it's critical

adventure to not really fall for that

trap I always mention that I don't like

people with um expertise typically as

Founders uh I think and when I call Dil

due diligence and call experts I only

ask one question which is what is

metaphysically impossible about this

working like is there a law of physics

that I don't understand that makes this

actually possible and if they can't

isolate a very specific principle that

makes it or fact that makes it actually

impossible then I just ignore everything

they say and you know write a cheat yeah

because it it's just all Vibes and

opinions Etc so well they're experts in

a prior world right they've learned why

not and this is actually like to combine

a couple topics here the reason why

Trump is so effective so the most

interesting question to me over the last

year was how is this guy who everybody

in the media and everybody in you know

the legal groups of various things is

trying to attack and hatte and all these

people publish these you know books why

is he on the price of being elected

president of the United States twice you

must have a superpower or two most

people do not get elected president of

the United States twice and most of the

people who are attacked by everybody who

has power in the establishment

definitely do not get elect the

president so what it come came down to

and I interviewed a lot of people who

are critics of him but knew him well

like ex-cabinet people that don't like

him comes down to he just asks a lot of

why like why do we do this why do we

have to do it this way why have we done

this way and it turns out in politics

and in DC most of the answers are pretty

mediocre or weak or poor or haven't been

rethought for 20 30 40 50 60 70 years

and so he just constantly Dives in and

says why why why why and that's actually

what predicts success for Founders is in

a domain they don't know anything about

they're just like why why do we take

these Hotel things for granted in the

Airbnb case why should they be so

expensive why should scarcity you know

Prevail in New York for four months of

the year etc

etc all right let's get to our docket we

got a ton of stuff to get to Google's

new Quantum chip is super impressive

freeberg and I were talking about that

on the group chat on Monday Google

announced its latest Quantum chip it's

called Willow here's the chip if you

haven't seen it it's uh beautiful it was

fabricated in Google's new chip plant in

Santa Barbara they started this project

back in 2012 their Quantum Computing

project

and the headline basically is Willow

performed a standard Benchmark

computation under five minutes that

would have taken today's fastest

Supercut 10 septian years or 10 to the

25th power which is billions of times

older than the universe if you don't

know what Quantum Computing is freeberg

will expand on it but basically

computers are binary you've heard this

before one and zeros quantums use cubits

you know those are Z1 or both at the

same

time and uh Google got a a 5% pop

they're up 13% in the last 5 days

probably on the other news that Gemini

2.0 is out as well which is unbelievable

have been playing with it what do you

think freedberg of this big announcement

Google's

announcement is a paper published in

nature that follows a pre-print they

actually put out in August so this news

has been out for a little bit there's

obviously a press cycle this week around

it to kind of make a big thing about it

but it is a very kind of important

milestone in the evolution of quantum

Computing so do you want me to kind of

talk about Quantum Computing again I

think we've talked about this in the

past I mean maybe a brief primer for

people but like what what does this mean

practically I think what people want to

know is when did these things actually

have an impact in the way say nvidia's

gpus have had yeah the big breakthrough

here is that the whole basis of a

quantum computer is called a qbit or

Quantum bit it's radically different

than a bit a binary digit which we use

in traditional digital Computing which

is a one or a zero a Quantum bit you can

kind of think about it as a wave

function it's sort of a Quantum state of

a of a molecule and if we can contain

that Quantum State and get it to

interact with other

molecules based on their Quantum State

you can start to gather information as

an output that can be the result of what

we would call Quantum computation and

that sounds complicated but what it

really means is that instead of doing

kind of binary computation where we're

adding numbers together or doing kind of

other traditional

arithmetic there are really interesting

functions you can do with cubits cubits

can for

example be entangle so two of these

molecules can actually relate to one

another at a distance they can also

interfere with each other so canceling

out the wave function and then when you

read it out you get a a result that is

basically a very very complex problem

that is solved through this Quantum

interpretation it's really hard to of

highlight how different this is from

traditional Computing so Quantum

Computing creates entirely new

opportunities for algorithms that can do

really incredible things that really

don't even make sense on a traditional

computer they're not possible to kind of

resolve on a traditional computer and

sorry let me just State one thing the

quantum bit needs to hold its state for

a period of time in order for a

computation to be done and so the Big

Challenge in Quantum Computing is how do

you build a quantum computer that has

multiple cubits

that hold their state for a long enough

period of time that they don't make

enough errors that you can actually do a

computation with them so what Google was

able to demonstrate here is they created

these call

it logical cubits so they put several

cubits together and by putting several

cubits together they were able to kind

of have an algorithm that sits on top of

it that figures out hey this this group

of physical cubits is now one logical

Cubit they balance the results of each

one of them so each one of them has some

error

and as they put more of these together

what they were able to demonstrate for

the first time ever is that the error

went down so when they did a 3X3 Cubit

structure the error was higher than when

they went to 5x5 and then they went to 7

by seven and the error rate kep going

down and down and down so this is an

important Milestone because now it means

that they have the technical

architecture to build a chip or a

computer using multiple cubits that can

all kind of interact with each other

with a low enough fault tolerance or low

enough error rate that they can start to

do these Quantum calculations this is a

a big area of opportunity one of the

very interesting areas that a lot of

people are talking about is in

cryptography so there's an algorithm by

a

professor who was at MIT for many years

named sh it's called sh's algorithm and

in 1994 1995 I think around that time he

basically came up with this idea that

you could use a quantum computer to

factor numbers almost instantly and all

modern encryption standards so all of

the RSA standard everything that

bitcoin's blockchain is built on all of

our browsers all server technology all

computer security technology is built on

algorithms that are based on number

factorization so if you can factor a

very large number a number that's 256

digits long theoretically you could

break a code and it's really impossible

to do that with traditional computers at

the scale that we operate our encryption

standards at today but a quantum

computer can do it in seconds or minutes

and that's based on Sha's algorithm and

if you want there's some great YouTube

videos that describe sh's algorithm and

how it works but it's like mind-blowing

when you look at it it's like this

really like non-intuitive but simple set

of steps that when you put them together

on a quantum computer it's like this

thing can instantly figure out all the

factors and then you can break a code

one of the things that this highlights

is that in a couple of years

theoretically if Google continues on

this track and now they build a large

scale cubid computer they theoretically

would be in a position to to start to

run some of these Quantum algorithms

like shortes algorithm

and so we're now kind of spitting

distance or a couple of year it's not

really clear is it three years five

years seven years but a couple years

away from having computers that

theoretically could crack all encryption

standards and there are a set of

encryption standards that are called

postquantum encryption and all of

computing and all software is going to

need to move to post Quantum encryption

in the next couple years so there's like

this big kind of push now to like how do

we do that how do we accelerate it I saw

Sundar post it I saw it in my feed I

ended up missing my next meeting because

I had to figure out how long will it

take for us to crack the encryption

standards that we use for Bitcoin Nick

here's the answer because I was so

tilted by this idea

so if you think of Willow as essentially

like one stable logical Cubit

equivalent in a chip we need about 4,000

to break RSA 2048 and we need about

8,000 to to break sha 256 which is the

underlying encryption framework for

Bitcoin

so I think you're right I think we're in

the sort of like the end game two to

five year shock clock no I mean I think

what'll have to happen is some of these

chains will need

to obviously reimplement something at a

pretty foundational

level the weird thing as free Brook says

is like the willow chips error

correction gets better the more of these

things you start to use together now

there are some really big problems in

see inside these chips like logical

interconnects are very complicated if

you put two chips on a board like the

ctoc communication is comp this all this

stuff that we haven't figured out how to

do but this is a big deal and I was I

was really like my God what's going on

here other projects at Google are

finally Landing you have whc and you

have this now I mean project Lon might

be gone but you know I think those

projects we're going to see a couple of

them change the world yeah just to give

you a sense on the numbers like Google's

Target for fault Tolerance on a Quantum

chip to make it logically useful is 1 *

10 -6 right now this Willow chip is kind

of running at

99.7% so it's still a few orders of

magnitude away they have a long way to

go in getting the fall tolerance low

enough to actually build uh logical

Gates using cubits that can resolve kind

of computational output and so there's

still there's still a build cycle ahead

and that pathway is a little bit unclear

but what they've shown is this almost

feels like the shockly transistor moment

it's

like you know here's this this

transistor now everyone's like you have

a lossy transistor and then you'll

figure out P injunctions you'll figure

out all of these ways of just like

getting the error correction down but by

the way this reinforces what you said

before which is it's hard for an

outsider like us to comprehend what's

really happening inside of Google

because the business they built was able

to fund this I mean and and I I went

down a rabbit hole because I'd never

heard of who this guy was that that runs

his helmet Nevan he's in Santa bar they

have a whole team in Santa Barbara

they've been running for like 10 years

he has his own law nevan's law and then

I went down the rabbit hole of that but

what's amazing is so valuable for

Humanity Google had the money to fund

him for the last 12 years exactly and

the greatest money printing machine of

all time is paying dividends yeah but

isn't it great to know that Google takes

these resources from search and sure

maybe there's waste and or maybe they

could have done better with the black

George Washington or maybe they could

have done better with YouTube but the

other side is they've been able to like

incubate and germinate these brilliant

people that can toil

away and create these important step

function advances for Humanity it's

really awesome Deep Mind is on that list

as well Keith what are your thoughts de

mind yeah yeah so I I think first of all

I think there's a long time before this

becomes a commercial product or

application of any sort so you know it's

great that they're taking money but

think about it like almost like Stanford

takes money or the US government funds

basic research in some ways this is at

least a decade out kind of thing um

there's another I mean this area Way

Beyond my expertise but I've been

talking to a lot of smart people because

I do do Financial Services Innovation

and obviously encryption is pretty

critical whether it's Bitcoin or other

places and there's a couple concerns one

is it's not even clear that you can

verify that this is true um by the way

like Computing to explain sort of the

magnitude of difference standard

Computing would take 10 to the 25th

years uh to verify that what uh Google

analys is accurate so there's a chance

that it's not even true for the thing

for the for the sampling test they ran

yeah to 20 50 number of years that's the

big I think hole in the whole RCS

Benchmark that they use that it only is

it's a it's a framework that only a

quantum computer could theoretically

even so how how you know the answer is

correct is I guess the question it takes

that long to solve and then to be

practical like so assuming you solve all

this and it's accurate and blah blah

blah you make it fast all second then

there is the postquantum Computing

encryption which you know a lot of

people a lot of things a lot of

important things have switched over to

so you have historical

Communications that were encrypted under

an old Paradigm that would be vulnerable

and you know every year that goes by

like the embarrassment level or the

threatening level of old historical

Communications will probably has some

Decay function or some halflife so if it

takes another 10 years Communications

that were drafted 20 years ago yeah

there'll be some embarrassing things and

blah blah blah blah but the more time it

takes the more safe you know sort of

private Communications and exchanges

will be so I think that's positive

third is there's a question of order

magnitude here you mentioned you need

like three orders of magnitude sort of

improvement is each step function you

know incrementally easier and faster or

is each step function you know 10 years

and I don't know that anybody knows the

answer to that that's right that's right

yeah a lot more work here to to to be

done you're not buying any Quantum

Computing stock yet uh not yet we have

looked at KB you know talk about like

technology forward you know VCS over the

years I've sat three partner

presentations and we've never really

pulled the trigger um there's other

reasons like including like even if you

have Quantum Computing you have to

rewrite software on top of it uh from a

different it's a completely different

you know world and who know nothing Maps

nothing m at all so you're starting from

scratch so you have an application layer

which might be actually an interesting

business

opportunity yeah how are these things

actually going to be coded and how our

developer is going to interact with them

if at all Maybe by that time it'll just

be AI running how do you build a

compiler who the hell knows how do you

build language properly these are all

complicated yeah Who's Gonna Write the

basic who's gonna write like the

Microsoft basic the interesting thing is

there's a lot of work that's been done

in the space like thinking about Quantum

Computing and Quantum algorithms is like

an entire Branch people do spend a lot

of time thinking about this and working

on this and there are ways you can kind

of simulate and test and start to build

out models for how you could utilize

quantum computers but obviously we just

don't have you know industrial scale

systems at this point there was one

Interstellar Marvel Easter egg in their

announcement that I wanted to get your

thoughts on freeberg Google said that

this massive jump in performance quote

lends Credence to the notion that

Quantum computation occurs in many

parallel universes in line with the idea

that we live in a Multiverse so is that

somebody in PR is high AF or reads too

much science fiction you know you know

the crazy down for us so the crazy thing

about quantum physics is such a mind

have you guys taken quantum mechanics

like have not I have yeah I remember the

summer I took it like the quantum the

first quantum mechanics class and I was

like glad it was a summer course you

really have to like think like pretty

deeply about what you learn in quantum

mechanics there's just nothing about it

that's intuitive like the way we kind of

think about the world is not the way the

quantum World operates in the case of a

cubit as soon as you measure the Cubit

it collapses to a value if you try and

measure it if you try and look at it it

goes to zero or one the probability by

which it goes to zero or one is defined

by you know the the quantum state right

at the moment You observe it it's just

such a mind so effectively this thing is

existing in a super position in multiple

States at the same time until you try to

observe it and that's the case of

quantum mechanics so what's kind of

happening I think in that

language jcal is nothing novel was kind

of discovered or represented that's just

quantum mechanics it's a mind and you

could go watch hours of YouTube videos

if you want to like get taken down the

Mind Rabbit Hole of quantum mechanics

and realize like one thing I've always

found fascinating about this discipline

is that looking at a cubit changes it

like it understands it's being particle

there's a slit experiment and if you try

and observe a light as a particle versus

a wave it actually changes what happens

what the the outcome is of it being a

particle or a wave same with electrons

the thing about quantum mechanics is the

observation of a particle changes what

happens serious

question serious question here it comes

here Buckle in when you look at the the

quantum bit can you get a better idea of

the scale of Uranus let's move on no

let's move i s jamat was doing a joke he

was queuing up a joke at the same time

no I was I was thinking about

Schrodinger's cat that's like a another

ridic ridiculous thought experiment that

when you you go the same concept it's

the same qu the quantum state of the

cat is it's both in the box and not in

the Box you don't know whether it's in

the box

until you open the box and then you open

the box and there's a x probability that

it's in the Box X probability it's not

in the box but when when you don't see

it it's both it's

both and if you're a cat lady you have

three of those boxes and I'm a dog

person well we got more engagement from

Keith on that science Corner than we

have

from so he's more he's more open science

inness I need to I need to Def they both

said

this is stupid and I'll never touch it

except Keith was Kinder and more

articulate in getting

there would have just been snoring yeah

he would have done this he would he

would have done his move where he goes

stupid and then like he

would next topic there's an advantage of

Monday partner meetings is I get to

watch the science fiction stuff you know

every week if I don't really understand

it but like a decade of watching science

fiction you pick up some tricks

you play chess with Peter teal while

that discussion is going oness actually

so I don't play Chess at all ever Okay

the reason why is if I do something I

want to be really proficient at it and I

don't have the time got it got it also

you have a life you have a life yeah I

like to do other things things in the

real worlda big big shout out to gesd my

my my Indian friend 18 years old new

world champion I saw

Champion yeah know world champion did

was he playing Magnus is that

every Brown guy that's done any random

useful thing in the world we all know

each other we're in a huge group chat oh

is it really yeah how it is the name of

the group chat isn't like the top 10

tech companies the group chat's name is

what can Brown do for you what can Brown

do for you okay there it is also UPS is

filing a treadmark infringement case hey

um speaking of Chip news apple is making

its own AI server chips for internal use

a report just came out that broadcom and

tsmc are helping them develop AI

inference chips you know inference chips

like rock uh H moth and there are

obviously gpus like Nvidia gpus those

are like the giant dump trucks that help

you build large language models these

infrin chips are kind of like speeder

bikes you know motorcycles quickly

getting you the results from those same

ones it's called balra btra I don't know

what that's in reference to mass

production in 2026 they don't plan on

selling the chips they don't plan on

cloud computing the reason they're doing

this obviously is because they really

want the iPhone to be the interface and

they have planted their flag that they

want to have privacy and have ai working

off of your local device and not having

access to your data but having a

compelling AI experience gosh my my

iPhone does not work I'm sorry I'm just

going to say it okay I don't know what

happened in you upgraded your software

is what happened you're on iOS 18 it

doesn't work I after 3 years I upgraded

to the newest phone I upgraded to the

newest OS the phone doesn't work meaning

like to call people I can't call my wife

anymore I can't call my kids anymore the

phone bricks constantly my photos app

doesn't work it is just really bad and I

think for a company of this scale I

don't understand how it does not go

through a more complicated test harness

that catches all of this I'm I'm not

trying to complain but because I know

it's hard for them and I know it's

complicated and but it's really bad

you're not the only person people are

freaking out about the infras changes on

photos crashing is a major thing and

apple intelligence just doesn't work so

it does seem Keith that Apple has gotten

off their game of making Polish stuff to

race to try and I guess catch up to

their perception of you know AI being a

disruptive Force at the interface level

I.E your phone or desktop what what are

your thoughts on uh this new story about

them doing more chips they've obviously

had great success with the processors

and phones now the M4 incredible if you

haven't tried the Mac Mini best computer

for the dollar in the world right now

but what are your thoughts on Apple so

the most important thing about Apple is

to remember it's vertically integrated

and vertically integrated companies when

you construct them properly have a

competitive advantage that really cannot

be assaulted for a decade 20 30 40 50

years and so chips classic illustration

go all the way down to the metal in

build a chip that's perfect for your

desired interface your desired use cases

your desired UI and nobody's going to be

able to compete with you and if you have

the resources that you know because you

need balance sheet resources to go the

chip Direction um it just gives you

another five to 10 year sort of

competitive advantage and so I love

vertically integrated companies uh you

know I posted a pin tweet I think it's

still my pin tweet about vertically

integrate is the solution to the best

possible companies uh but it's very

difficult you need different teams with

different skill sets and you need

probably more money truthly more Capital

but Apple's just going to keep going

down the vertical integration software

Hardware you know all day long and

there's nobody else who does hardware

and software together in the planet

which is kind of shocking in some ways

is there a world class company a company

that's world class it's both software

and Hardware other

than yeah maybe

Nvidia well may not really could they do

a world class UI you know maybe maybe

there's a foundation you have have a

different Vision maybe a different team

not clear Tesla's close I guess I'd say

the software's

good if you Define software as it

touches a

consumer Tesla Apple in some ways

Google maybe meta with the meta

glasses trying trying attempting you

can't say Nvidia because I think Nvidia

touches the consumer through an app that

then sits on top of Cuda which I think

is that's a brilliant strategy for them

but it's it be apple then Tesla and then

a long tail of people right anyway the

point a lot of competitive advantages

that they you know been actually

leveraging for about 15 years now and

even back then Steve there's some old

great Steve videos I I'll see if I can

find you a clip where he talks about

this very intentionally from the 1990s

you know when he came back to Apple he

said we're doing vertical integration

basically using those words of software

and hardware and there's going to be

nobody else that can compete with us I

think it's in an interview he did in

it's published in uh in the company of

giants I believe and he's perfect on

point he just follow that strategy for

you know the next 25 years now you're

seeing some of the manifestations though

of a competitive strategy that gives you

incredible advantages is you get very

sloppy in other places especially over

time because you have such great

competitive modes that you don't have to

compete at The Cutting Edge of this like

the photos app is completely unusable

I'm the biggest apple Fanboy in the

world like I I I remember interviewing

once with a job for Tim Cook and I

walked in and I said he's like why you

know why are you interested and I said

well you know I own every skew of every

product you've ever produced except I

don't have every color of each you know

iPod and he was like blown away and but

now like my photoos app is completely

unusable so I totally understand you

know about the frustration and they

they're showing like the Decay function

you know culturally and otherwise that

eventually somebody will figure out an

angle to rip them out yeah I'll tell you

we talked about dictators at the

beginning of this shath and obviously

this is your real house as a dictator

yourself is you know there has to be a

constant fear that some a-hole is going

to come to your office and be like what

did you do to the photos at and that

fear does not exist inside of Apple it's

not like the mobile me you ever hear the

mobile me story

where he brought the mobile me team in

he said how is mobile me supposed to

work they said well it's supposed to

back up everything when you buy your new

phone you get everything you never have

to worry about losing a f slammed his

hand down and said well why the F

doesn't work that way fired the person

brought the next person in and said now

make the way he said it's supposed to be

game over I don't think Tim Cook's doing

that Johnny IV's not there and obviously

Steve Jobs not there to terrorize people

well I don't think you look you don't

need to necessarily terrorize people but

I do think you have to go through uat so

I think it's pretty reasonable when you

have a large footprint of consumers

using an app to go through user

acceptance testing is like first base

and typically what happens is you can do

a process of a few months where several

hundred thousand people get it all over

the world and as long as you do an okay

job of getting a decent distribution of

people this would have come out but I

want to just talk about what Keith said

as well it's literally not just photos

it's like the phone doesn't

work so there are just core structural

issues with this operating system now

that makes the Iphone

maybe 10 to 30% less usable and that

everything is everything really

frustrating the command center you know

when you pull up your little Command

Center to change the brightness and the

your airpods it's just like what are

they doing here I mean by the way so do

you need a chip do you need a machine

learning chip to do inference to figure

out that when you constantly run your

phone at a certain level of brightness

you should just allow the phone to be at

a certain level of brightness stop

changing the damn brightness why does it

re like I me this is not this is not

complicated software engineering guys no

but this is my point there's no Arbiter

of taste anymore who is the back

yeah let me let me pause double click on

that for a second so I think taste is

great if you have it but there's only so

many people on the planet that are going

to have you know Cutting Edge taste and

be right if you don't have taste what

most tech companies do is they use data

data is something that's approachable

and leverageable because Apple has like

this the antibodies to using data to

measure success with the user experience

to measure whatever

success if you subtract taste even by a

bit you don't have the scaffolding that

every other company would use and so you

see the worst of Both Worlds that's a

great take that's a great good take the

rails right you go off the rails so

Keith do you think that you think that

what happened is like when Steve Jobs

isn't there and Johnny IV isn't there

there's still a bunch of folks that

probably think they have taste but the

real taste folks left and there's really

no scaffolding left to more scaffolding

you had at Facebook meta obviously or

that Google uses would catch some of the

stuff without a doubt about it you know

that users are less thrilled and they'

use things less and you'd fix it and

maybe even you take that too to extreme

you never develop taste like I could

argue that about Google or meta they

don't really have taste but like yeah

you could AR You could argue the

paradigms but fundamentally if you don't

have that back stop if the taste of

tracks even 10% not all the way down

you're just not going to catch this

stuff and I think there's only like how

many people in the world really have

Cutting Edge technology user experience

taste I don't know too many I would fund

them right away

he might have it it's an incredible

point because

I if I'm being really

insecure I would want to say oh yeah no

we had a lot of taste at Facebook back

in the day but actually we had so much

scaffolding around data probably because

intuitively we knew that that was way

more reliable for us it's more

predictable scal it's certainly more

scalable right like you take Steve out

you don't need a dictator but you do

need a a taste and taste is Artistic the

same thing Venture like you know like

scaling venture is really really

challenging because early stage

investing is more like taste than data

driven and later stage you can use data

and scale it and Scaffolding so I think

there's just Fields it's a little bit

also you see like the sports teams they

just happened at Stanford when Jim

Harbaugh

left it took years for the Decay

function for like the next coaching

regime to show they were completely

incompetent like the next year they're

pretty good next year they lost one more

game than they should have next year

they lost two more games than they

should have blah blah blah then

eventually they became like horrible and

you know there's a Decay function with

an organization when you take out the

person who is the original thinker or

the leader or the dictator or whatever

and so I think some of this is showing

up now and then you know playing on a

field that's not favorable to them which

is there are advantages Apple has in AI

but there's some significant

organizational structural disadvantages

and that's the field that people are

going to be competing on for the next

five years from a consumer perspective

and they're playing on a field where

they don't have all the advantages in

their favor yeah yeah true let's go to

the app level here Tik Tok is scrambling

right now after an appeals court upheld

the January 19th deadline for divestment

here we

go here we go I refer you to my Twitter

feed

my I mean you and Jacob must sit I mean

what do you do you just sit at dinner

and feed the kids and then uh talk about

Tik Tok in China it's it's well I think

Tik Tok is pretty obvious like you don't

even have to have a conversation in my

view like Tik Tok is a

threat to the National Security of the

United States and that's why whyl to

people who are like it's just an app

it's just an app why why so I think

there's different dimensions one of the

problems is there's so many things wrong

with Tik Tok that actually sometimes

people get confused because there's not

just one it' be easier sometimes if

there's just one thing so they are

definitely using the app to track data

about Americans and there's evidence

that regardless of what alleged

protections

exist there are people in China

monitoring what certain people in the

United States are doing and the CEO lied

under oath to congressional committees

about this and the evidence is now in

the public domain hopefully this justice

department will prosecute him for lying

under oath I think setting a really good

example that you cannot just purg

yourself before Congress sorry Keith can

you double click into that so what how

did it come into the into the open

source that what he said was a lie like

what so there are people in China who on

the record have said they had access and

have had access to American user data

which he swore to under oath to the

Congress that they were storing the data

in Texas somewhere and that there's no

possibility that you know Chinese

Nationals in China could access the data

there is now several um instantiations

of this in the public record let alone

what's privately available yeah I mean

the case specifically too back in 2022

by Dan the parent company of Tik Tock

had used an app to track Loc

had used their app to track the location

of journalists because they were trying

to track leaks

outside then secondly let me let me keep

going here because it's worse so there's

a law the fundamental problem is in

China there's a law that says if you're

a Chinese company upon request of the

CCP you must provide all user data so

any Chinese company is subject to that

law period there's no court intervention

you don't need a subpoena blah blah blah

and so it any Chinese any executive of

that company is subject to significant

penalties on the record for not

providing any user data at the request

of the CCP so as long as that law exists

there's a real structural threat to the

United States now then there's the is

the app being used manipulated on a

Content basis to influence you know

policy in the United States to

disadvantage this or that or create

hostilities I don't really know the

answer I think there's been studies that

suggests that and you know pretty

rigorous methodologies but that's a

second level and then third is there's

the why the hell are we allowing Chinese

companies to compete with us when no

American content based organization is

allowed into the Chinese

market whether it's meta

Google a you know there's a strong

argument there that Reddit if you don't

allow our content or non you know non

chines content into your Market why

should we be enabling Chinese companies

to be successful in quotes in the US

market and that's more of a a fair trade

free trade Keith do you think that the

Pegasus spyware that can infiltrate

WhatsApp so that you can turn on the mic

and listen remotely and it has no

fingerprints it's very difficult to

detect do you think an

equivalent let's call it a back door

exists inside of Tik Tok yes so my

evidence for this that I believe is in

interpolation of what's in the public

domain is if you looked at that vote to

ban Tik Tok it was extremely bipartisan

despite you know controversy and what

happened was that vote was taken a week

after there was an intelligence briefing

to both the House and Senate

intelligence committees that was that's

confidential and the votes you know all

of a sudden flowed through I think

there's things that are not in the

public domain about Tik Tock that

spooked a lot of elected officials and

led to this bipartisan consens is how

many bar parters votes do we see on an

allegedly controversial issue that you

know basically didn't the vote was like

you know like not even close in either

house 360 to 58 yeah when do you see a

vote like that on something meaningful

never right they got they definitely got

spooked and I mean if you just think

about Navy SEAL Special Forces they're

not allowed to use a lot of these apps

government officials aren't to use these

apps because they know that all you have

to do is if you track somebody's child

and their Tik Tock usage now you know

where the parent is you start thinking

about the security and safety of

individuals in our government it's crazy

so 352 votes for an incredibly popular

product yes think about how bad

something has to be to get a consensus

of 352

votes on a on an out that's used by you

know huge fraction of the American

public pass the Senate 79 to8 and you

are right if you say you're going to ban

Tik Tok the was against TI to but then

he opened one because that's where

voters are you you're going to lose that

generation of Voters arguably arguably

Theory there's some risk I I can see

that Biden can if he's awake extend this

window by 90 days I don't know if

grandpa is up for it but he could extend

it a bit and obviously this with the

Trump campaign you know he says a lot of

different things Trump has flip-flopped

a couple of times during his first time

he tried to band it wait till he gets

the readout that the rest of these guys

got yeah and well and then he had a mega

Dona and Tik Tok investor Jeff y gave

Pax $50 million and he owns 15% of it

when I had dinner with him that's is

this is the one of the things that I

pointed out to him was this specific

thing I said you have to look at the

Pegasus like equivalent INF infiltration

of WhatsApp having been done on Tik Tok

because the reality is if Tik Tok has

200 million users it is true that you

know

199,999

th000 just don't matter so you could

turn on the microphone you're not going

to hear anything but there is probably a

thousand to 10,000 to 15,000 people and

I do suspect

that state actors are smart enough to

figure out how to triangulate

who you would want to be able to turn it

on when that phone is in your pocket or

when that phone is on a desk and I'm

sure you will hear all kinds of random

things and many of those things could be

quite sensitive in nature so I think

that this is something that the the

government's going to have to look at

really intensely there's such a simple

test here what are they doing with their

own people in China they are in a police

state there they make the stazzy jealous

how much they're tracking individuals in

China so if they'll do it to their own

people they would have no problem doing

it to an adversary and ask yourself if

the shareholders care about money they

would be willing to divest right no

problem they want to take the company

public so if you won't divest and get

off the board as a CCP it's because you

see this as a valuable tool right I mean

just work through the basic logic folks

right it's some price point right like

what I would do if I were president I'd

say you tell me the fair market price

for Tik Tok and I'll go f you know I'll

make sure that there's buyers right

because CCB won't name any price there

is no great tool the point right that

would be like giving up your nukes I

don't think they should have to sell at

a less and fair market Price I think

that's you know legit like I believe in

capitalism but there any free market

should allow for you know some price

Discovery and if they can't name any

price period that suggests that you're

doing something that's nefarious there

there's Reason by the way Cham you

probably know this you know if you meet

like at least you know some of the times

I've met with the president they take

your phone away why they why do they

take your phone away 100% why exactly

pretty obvious yeah exactly also there

are phones that can be designed to be

weapons as we've seen a number of people

got some nutshots with their pagers

recently all right let's talk about

Venture as we wrap up here man Keith for

boy cooking with oil new sacks new red

meat sacks are you a steak guy too ke

you you eat a steak once in a while oh

of course what's your cut what's your

cut are you kolette are you a ribeye guy

I like Tom eight to 10 12 ounces Max

medium you know solid I don't really

care pretty much wagu I'll be a little

non-american go wagu you know like

Australia or Japanese yeah sure all

right all right I think uh just shout

out to my friend Kimo I'm a you know red

meat Republicans of course of course I'm

a big fan of this kolette

slash on it yes I just bought recently a

Denver Cut which i' never tried

incredible Denver Cut okay cut all right

let's wrap up with Aventure update here

at The Darkest Hour Keith sometimes

before the dawn VC deal

activity has uh getting close to uh

preco numbers in 2019 obviously major

funding drop off happened in 2022 yeah

it's been a couple of years of this but

deals uh the number of deals is coming

back the amount being put to work coming

back to I would say the steady state

perhaps even normal level uh and um but

VCA exits sadly are not keeping up but

we did have service now go public today

up 50% and the wrath of lenina con is

officially over she's out Andrew

Ferguson is in this looks like a great

appointment another one by Trump in the

column of somebody who wants to allow

business to occur and wants a free

market he wants to do basically

everything Lena KH con uh didn't do

which is allow some m&a boy what's your

pulse like here uh and what's your take

on the Venture industry and then we'll

go into m&a and exits we'll start with

just investing is it is it ramping up

you seeing high quality companies well

I'd say that you should cut that data by

Ai and non- Ai and you might see a t to

different cities my anecdotal experience

is there's AI companies where the

Market's pretty hot maybe cooling a

little bit but hot and AI companies with

the right team are getting funded you

know frequently quickly Etc and then

there's non AI companies and I think

you'll see a very different you know

sort of chart there I do think net net

you're probably at a city state that

looks reasonable across 40 years you

know like Etc but um it would be

interesting and you know you have to

make some methodological decisions about

what's an AI company what's not but if

you could do that it'd be interesting to

see if the lines you know look similar

or

not but it's pretty hot like people

starting companies found Founders are

optimistic crypto companies also you

know are back in Vogue obviously due to

the change in Administration I think a

lot of people had been hesitant to start

new crypto companies and you know

there's belief and confidence in the new

Administration thec Etc so we'll see if

Innovation accelerates you know with all

the new capital and all the new Founders

uh back in crypto in Enterprise

software it had been pretty cool non AI

based enterprise software but you know

like as you mentioned with the IPO this

week

trading very aggressively I think you

know maybe there's some inspire

inspiration there for you know more

traditional boring companies stripe

stripe stripe should go public but uh

you know they don't listen to me

so yeah you didn't know why aren't they

going public Keith what's what's the

story with the boys over there why

they're waiting to get disrupted by

crypto stable

coins I mean seriously talk about

missing your window get out there boys

they bought that crypto stable Coin

Company for like a billion dollar

defensive yeah defensive I I personally

believe and subscribe to the view that

Comey should go public as early as

possible I'm on the group bill girley

you know sort of school of thought what

amount of Revenue what amount of Revenue

put 50 million minimum but

predictability matters you know

definitely so not just 50 like but 50

with line of sight to 100 and knowing

100 to 200 I wrote a whole chapter in

Eli Gill's you know high growth handbook

on why call me should go public as early

as possible so I've been on this Chris a

forever I like accountability

transparency discipline I think they're

good things and you know there's a

critique that like oh you're not going

to be Innovative anymore if you look at

some of the companies we've been talking

about what are some of the most

Innovative companies in the world

they're public companies it just takes

the Right leader to say I'm going to be

Innovative and I don't care with the

bureaucrats and lawyers you know I'm

just not going to get distracted with

that and so I I like public companies

and so I think you'll see a lot of the

companies I am involved in go public at

a fairly rapid clip by his historical

standards different Founders though have

different yeah sort of abuse on this

it's very reasonable stripe SpaceX you

know for example found in 2003 who knows

you know when it's going to be a public

company so you can have a very

successful company like SpaceX or stripe

but my preference is to go public early

and then you have the capital resources

Equity or Capital to be strategic and

per your point about potentially missing

window now they were able to transact

you know in that particular case and get

ahead of the curve or at least not miss

the curve but sometimes when you're a

private company there are strategic

assets that you can't get your hands on

and you know think Facebook buying

Instagram we talked about the taste

issue Instagram had taste at the time

like Kevin had taste and think about

where meta would be had they not been

able to acquire Instagram yeah totally

totally different timeline or the public

currency to have bought what'sapp yeah

or

what'sapp so optionality increases as

you have that public currency if you're

a private buying a private the acquired

company needs to believe that you're

going to get it over the finish line

they're going to have some liquidity at

some point whereas with the public

government they just sell within

whatever their window is jamat your

thoughts well I was just going to ask

Keith a question which is what is the

game theory behind stripe not going out

like what's

the what's the Strategic rationale you

know honestly yeah without sharing like

you know one-on-one conversation sort of

stuff I think the question the burden

they they inverted the burden which is

why should we go public a lot of a lot

of people ask the question the opposite

way which is you know why wouldn't I go

public I think their first principal

thinkers like put per my point about

Trump and I think true of Elon they ask

like why and they're like well what

advantages would we get and I actually

think the m&a one is very real it is but

I think I think they've been able to

construct alternatives to most of the

advantages but not every company's going

to be able to do that it took a lot of

effort energy and then the question is

would you substitute that energy into

something else that might be higher

value creation if you weren't to like

Pro you know creating the alternatives

to a public

structure it's a great answer freeberg

your thoughts here on public markets m&a

the end of the wrath of Lena Khan and

what we might see in the New Year Post

January you I I disagree with the

conflation of Lena KH into all this

stuff too much it's she's a big company

break aart kind of mandate it has

nothing to do with tech m&a small like

the typical kind of deal flow stuff that

I think you're focused on I've said this

a number of times I'll just say it again

but I think on the um on the ener

liquidity thing I don't think that the

thing holding up Acquisitions and IPOs

is markets I actually think it's

investor and board expectations on

valuation relative to where they put

money in the last couple of years so if

you look at the valuations from 21 to 23

you know early 23 so much money went in

at such high prices those investors can

take those companies public today there

are public there's a public market

appetite at all times for anything just

depends on the valuation and the real

issue right now is that a lot of the VCS

the late stage private equities the ones

that did the big markups and the late

stage D rounds e- rounds Etc they don't

want to take these things out and take a

60 70% haircut on the IPO they'd rather

kind of let this thing sit private and

see if they can earn their way back into

the valuation that they did the Mark at

when they put the round together so I

100% agree 100% agree with this yeah I

mean there there is these overhangs are

very real I don't think the exit

liquidity dir fundamentally is driven by

markets I think it's just driven

the the sell side and the investor

expectations there's also a culture

thing I have to say like in talking to a

number of like the leaders of these

public companies that were very

inquisitive and m&a they are taking the

position it's easier for us to build a