20VC: Canva Slashes Growth: How Much is it Really Worth | Demis Hassabis and Jeff Dean: Talent Exodus at Google | Revolut's $50BN CEO Pay Package | Elon Musk's $55BN Terrafab

There's going to be a lot of people paying the bill in 26 and 27 for a certain amount of hesitancy in 23 and 24. The only way you prove that you're not dying is by growing. It doesn't matter what you think big guy you're in this journey for the next 12 months. Buckle up. Because liquidity will only come at the end of the journey. It must be extraordinarily validating, if you're Jeff Dean, to leave as a non-CEO of a two or three trillion dollar market cap public company and have the stock go down by a couple of hundred billion dollars. Google's effort so far, or B+A-not A+. I mean, this is such an entitled podcast. Oh, poor anthropic engineer, only made 35 million. I mean, go out to the goddamn panhandle. No one's making 50 grand. When they say it's not about the money, it's about the money. Any investment I've made that is not run by a founder is a zero. It's going to be a zero in this age. This is 20 VC with me, Harry Stabbings. It's my favorite show of the week. Roryo Driscoel, Jason Lampkin and me shooting this shit on the biggest news in tech. So what happened this week that we discuss? Canva Cuts 2026 Growth by a third? Ouch. As AI serving costs blow up. Next, Jeff Dean leaves Google after 27 years. It gets worse. Demis to Sarbus, the OG of AI, then steps back from Google deep-mind. Also, God, poor Sundar. That is one bad day at the office. And then Elon Musk, as always, comes out with one of the most ambitious projects with TerraFab where we unpack the jobs that come from it, the first real installment of $16.8 billion, and just what it would mean for him in terms of structurally not having to beg at the Tower of TSMC. But before we dive into the show today, what's one thing in business that's spreading as fast as AI? AI risk. Every new tool your team signs up for, every vendor that turns on AI features every new integration. Each one, I'm sorry to say, is an opportunity for something to go wrong, and most security programs weren't built for AI's pace of growth. Well, that's where Vanta comes in. Vanta is the number one agentex trust platform, used by over 16,000 fast moving companies, like Ramp, Curse, Harvey, and more, to ensure they're always audit ready. And now Vanta's helping companies like yours. Watch for the risks that show up between audits. Cross your vendors, your AI tools, and your whole environment. How? Well, the Vanta agent works like a 24/7 GRC engineer in the background, finding issues, drafting fixes, and cutting vendor agreements, time by up to 50%. Whether you're a fast growing startup or a global enterprise, Vanta's here to help you automate your security and your compliance, and earn and prove trust. My listeners get a special offer. Oh yes, a special offer. $1,000 of Vanta.com/20VC. That's vant.ta.com/20VC for $1,000 off. While Vanta keeps compliance covered, Deal helps you hire globally. Founders' scale startups faster on Deal. Grow without borders. Deal handles the hard parts of global hiring, so you can stay focused on growth. Set up payroll for any country in minutes. Hire anyone anywhere and get visas handled fast. Deal takes care of onboarding HR, IT, EOR, benefits, and compliance. Everything your startup needs to scale quickly, all done fast in one place. It's more than 40,000 fast growing companies, like AirWallix, 11 Labs, and Intercom. Trust Deal to move fast and get back to building. Visit Deal.com/20VC. That's Deal. D-E-E-E-L. Deal builds the team. The frame is the pro AI website builder for creators, teams, and businesses that care enough to get every detail right. The agent's closed the gap between AI-generated ideas and production ready website work. Because it all happens where the site actually lives, it lands on the canvas, stays editable, and can be published when the team is ready. If you bring speed and scale, you bring taste, judgment, and control. It's an enterprise-level solution too. Premium hosting, enterprise-grade security, 99.99% uptime SLAs, which is why the world's leading brands, like Pplacity and Miro, build in Framer. Learn how you can get more out of your site from a Framer specialist or get started by building for free today at Framer.com/20VC for 30% off a Framer pro annual plan. That's Framer.com/20VC for 30% off a Framer.com/20VC rules and restrictions may apply. You have now arrived at your destination. Boys, it is another week we have Jason joining us from Hawaii. What is the Hawaii dance? The Hula. Hula means hotspot of AI. That's what it's an acronym. We're going to start with something other than open AI around Thropic State. We're going to start with Canva, baby. We had Cliff on the show before. Canva cuts 2026 growth by a third as AI serving costs blow up. For those that miss this story on Canva, what should they know that they need to know here? Sure. Let's start with the facts and then kind of go on to the question. The facts are that Canva, large privately held company in the kind of creative, sweet space, the slows as it's revenue, even though they're private. They were at 3 billion in gap revenue last year, going into this year, they're going at 30%. The CEO, Meli Perkins, the slows mid-year, that they're probably going to be going 20% by the end of this year. As you say, a one-third slowdown in growth rate, but still a healthy 20%. The other half of what she said was interesting, which was that obviously adding ton of AI features, those features cost real money. Part of the reason that she claimed for the slowdown in growth, it was just too expensive to effectively be subsidizing users with cheap AI when, in fact, they're incurring significant costs. There was an implication there, which I'm actually going to tease out later on, not sure I fully buy, which was my growth rate slowed, but if I was willing to lose more money, it might end up slowed by as much. So there's an implied statement on elasticity there. But the big picture, and this is kind of one I want to zoom out and ask Jason a question, the big picture on this, there's three massive creative software companies. There's Adobe, which does 23 billion, growing at 12%, trading at like three or four times revenue. There's Figma, which is also public doing a 1.4 billion, growing at 40% the fastest. And in the middle, this can var still private around 3.6 billion, growing at 20%. And the big question for all three of them is, and that's why I want to put it back to Jason, who's much more, I've used them, but not as much as Jason is, is AI going to be a feature they can incorporate or is it a new new thing that makes them obsolete? And to me, that's the meta question. It's not about 30% growth versus 20% growth, cause of a little bit of gross margin compression. If that was the only issue we could talk about that, that's the kind of second order business model issue. The real question for all these companies, are you 30 on the way to 20 on the way to 10? Cause there's a whole new set of companies doing this, and I know Jason, you guys are in Higgs field, or is this something you can incorporate and kind of survive and continue to grow? So I think that's the question. Jason, I'd love to get your thoughts. I don't know, man, I found it kind of depressing, the canvas stuff, because canvas seemed to me one that obviously AI was naming. CBT release, Higgs field release, every else, you can do more and more of its functionality in core AI. This is what we fear as investors, is that you can do our investments in chat, CBT or cloth, right? That's the ultimate fear. But yet it seems somehow, canvas was defined that gravity. It seemed it was a non-issue despite me having churned, and Amelia having churned. We churned. This is a tough one. Canva and Notion both we churned, not because they're not great apps. We just no longer had any need for them in the agenda carrier. We just no need. Canva and Notion did nothing wrong at all, nothing, and we didn't need them. But until this, it seems somehow I was wrong. Like they were defined gravity. But 30 to 20 in one year, I love Rory's optimism that they're going to bounce off and get back to 30 or 40 next year when they find a few extra tokens under the covers. I think it's terrifying, and it's a little, I was hoping they were defined gravity, but it doesn't look like it. Defending myself on the optimism charge, because no one ever accused me of optimism. I actually didn't say that. What I said was that's the implication that they're saying, I don't know the answer. Genuine commentary. And I'm going to advance the bull case to some extent, just articulate it more. Because again, what the CEO is saying is, look, we can't envelop it in AI because we were using frontier models, and they're just casting us a shit ton. And so the first shoe that's clearly going to drop is they're not going to continue to spend a whole bunch of money with an topic of opening, probably opening AI given its images, of course, Rory. But they now bought their own model and are building their own in-house image-focused model, which makes absolute sense. So let's assume they do that last quarter. Great. And great. Let's say they're even a year or two late, because I think I want to push back to the big question. The interesting question is, if let's say they get it done, and in six months, their in-house model, which is 90% 80% cheaper, is just as good as images as, you know, the frontier models. Then the question still remains to your point Jason, do you think they can quarter and I hate to be very stuff enough AI functionality into that product that you would have retained? Or do you as an active user say, no, I just prefer to go out at eight of AI native day one, because that's the big question. You know what's scary is something that sounds nerdy is becoming mainstream. Our agents are, never even suggest these products. That's the danger. And it's not just agents. We talk about AO and Geo, what is Claude in chat Gbt say, but it's worse than that. As we become agentic, our agents, we can't choose everything ourselves. We built our own ad server and ad generating network that built our own creative and own collateral and serves it to the sastra community. It's all built on our agent. It never occurred to the agent to use Canvas for this. It never once occurred to it. Even some sort of open weight parity at the metal level, I think what's scary is that the most exposed part of the market is the prosumer market. Everyone is chat Gbt fluent. If it works in chat Gbt, or Claude, you're just going to use it. If you believe these Gartner numbers, and I'm out at a big sales source event, they have all the data, it may be that less than 10% of the enterprise has even deployed an agentic application successfully. I will actually believe that. Despite what we're seeing in there, because all the hot enterprise ag companies are still serving early adopters and outliers. I'll have to extend. On the prosumer side, everyone's used chat Gbt. And so there's no going back. My related concern is if you compare it to Figma, well, Figma missed the quarter in a sense. Figma traded down 20%. But they burned the tokens. Dylan was clear. Our gross margins are going to be significantly impaired going forward, because our agentic products are being used. It's not identical, but they took the hit, right? And they're public. It's more painful to take the hit when you're public than when you're private. I really don't think Blackbird and Friends are going to beat Canva up if the bottom line is missed slightly. That's an internal decision, right? And there's a lot buried in it. I just want to unpack it again for folks. One is you made a distinction. Let's talk about the enterprise versus prosumer distinction, because your exactly right is that Figma has is much more an enterprise product. It's kind of large groups of people building software coordinating. So even if you automate creativity, you still got bureaucracy and corporate processes that you make money off in terms of managing workflow. But you're exactly right. Canva is the prosumer. Shit, I want to generate a flyer, I want to generate it. She website, I want to generate some kind of content. And that's where exactly where AI is the most accessible, because you can just go on and type in, generate me a flyer that says this and there it is. So you're right, they are more exposed in that sense. It is the fort notification that Jason often talks about in terms of the shrink and cam when you have a dinner invite that you can do on chat GPT and bundle it into consumer subscription versus an additional tool. The nerdier version Omjad said about air table, not about Canva, but he said to his quote on the seal of Replicate quote with fair table was no criticism, but the era of no code is over. And no code was a bunch of tools where without developers or AI, we could build stuff and air table was a no code database disguises as spreadsheet, right? It was a wonderful product before AI notion is a no code database disguises a word processor and Canva was a no code way to design stuff. It was a breathtakingly disruptive product. I didn't need a designer anymore. I didn't need to know how to do HTML or anything. But the era of no code of things that we humans can do without engineering resources, it's it's slowly winding down. And if it's in chat, GBT man, is it a blessing or a curse that they didn't go public already then? It depends on who you're asking. Blessing on a curse for whom, right? Because I was thinking about this a lot because I knew this question would come up because if you think about it, if you're the founders doing this publicly is just marginally, arguably, marginally more painful. So maybe you're happy to be doing this in private, right? What you really saying is this. Let me translate because we never said it explicitly. When you say to the should you've gone public early, what you really saying is, oh my god, if I'm the venture guy who did this thing at a hundred million like Blackbird or compliment, I think, Solicis was in early and Matrix was in super early. And then even the guys who came in at a billion, you must be like, oh my god, if we'd access that 50 billion valuation in 2021, I would be so gone now. And that's really what you're talking about. And so which is why to be clear, some of the CEOs are a little unsympafatic to this line of conversation because this is their lives work. Because really when you say should they have gone public early, what you're saying is, boy, I wish the fast money had gotten out while the CEO and the management team would still be there just in a different forum. Good point. The getting out early, it's a critical question for VCs, right? How the hell do I take something? We can talk about IPOs and M&A, but man, our shares are illiquid that we buy. We put them in and we hope we pray, we face east that we'll ever get any cash out. If I'm an employee, canva or founder, and the founders already gave away 90% of their shares, they've already given it away. They're on the mission of their life. Maybe in Sydney and Australia, it's easier to retain your talent than in the Bay Area, right? Maybe they're not going to quit and go to open AI the next day if you don't go public and make them, you know, a million dollars effective a year in stock. Maybe it is better to hide. You've built an iconic company that isn't going anywhere. I mean, I'm just playing the devil's at it, but Rory's point. If I were the founder, if the three of us were the founders, I might want to run this thing like base camp, right? 37 signals. Guys, let's just hunker down. We'll increase profit sharing. Probably the VCs wouldn't let you get away with it, but if I hadn't raised a ton of my cap table, it might not bother me so much. Yes. And I think one of this totally separate threads is, public markets have to be more attractive, not just for people exiting like the VCs, but also for founders to be able to, you know, kind of reignite and reopen the window. And if it's rational to say uncertain circumstances, it's easy to be private. And that just probably weighs into the calculus when you decide, as Fat Canva could have done, should you've gone public in 2021? You know, again, to repeat, for the most important people in the company who are the founders, who own effectively the company from a entrepreneur, an unspurspective regardless of the cap table. I don't know of that matters. I don't know if public versus private matters nearly as much as this is the platform shift challenge of all times. And, you know, assuming you do get almost free AI via your standalone model, you've got to figure out to Jason's point a product in the next 12 months that says easy and as accessible to your user base because you know the segment of the market you're addressing now. It has to be as easy to that user base as ChatRy PT is to generate the products they generate with it. That's your challenge. My point is, I don't even think it's about easy. I just think it's about the bundling of consumer, like real estate, of where they spend time. I just interviewed the president of Uber. What is his single biggest fear? It's actually the disaggregation of UI or the removal of UI where you say, I want a car and ChatRy PT automatically routes you to lift Uber or another provider based on price. That's what our agents already do. They just routed us around Canva. And so my point being there, Rory, is like, he doesn't actually matter. No, I know you're exactly locked. To be very clear, going back to some just, if the AI models become the universe, well, in ChatRy PT, let's say, who is more consumer focused, if that becomes the universal interface for functionality, then you're exactly right. And all model choices are back end choices, then you never even get the chance. I don't know if it does. I could be wrong. And in fact, this is probably an area where I'm still trying to triangulate. I don't know what things that we do separately in the West because it's interesting. China, obviously, in mobile has a single super app for everything and you do everything through WeChat. But just to pick on to what I'd call high cognition tasks that are very different. Actually, the polar opposites. One is creativity, building something creative for a consumer. And the second is doing your taxes. There is a credible argument in both cases that ChatRy PT can suck those revenue up, which is why I intuit was down. I'm not sure I fully believe it, but it's why I intuit it down. And it's what Canva's wrestling with. So it's a super interesting time here. As yet, I'm willing to bet. I could be wrong in this. I'm willing to bet. And you guys from Higgsfield can say it, there's still a role for a company like Higgsfield, which is an aggregator across models, which goes against what you're saying. How is that a company that's saying, hey, Mr. Consumer, you could do this directly on one of the video gen companies, but I'll aggregate the models. I'll give you a slightly better UI. I'll help you with billing. And maybe there is a business on top of the models. I didn't have Jason would agree with me. I'd say they're serving two different markets. I think the ChatRy PT cannibalization of Canva is me and my partner doing a dinner invite with ChatRy PT that we were done in Canva. And then Higgsfield is actually a business that uses video as a more primary method of delivering their message. And so it's a slightly more prosumar professional. I would argue. Jason, I don't know if you're agree with me. I think the thing is I think you could argue it for sure. Almost all that growth, 700 million revenue over today is from this video creation complex video creation where you're taking you're creating functionality of the models that alone it's very complicated to harness, right? It's a harness that allows you to do something that's very complicated with the models. The original model, which was just to aggregate models to make short videos, it is cash-lapositive to Roy's point, but it's not an exciting business, right? They stumbled into the bigger one. The tarpawn and it's that whether that whole business which will shortly be a billing and revenue, a lot of it could have been Canva's. If they aggressively got into it, just like I firmly believe a big chunk of Repplet and Lovable could have been figmas if they'd done it. It's easy to take shots when it's so hard to run your core business, but I think we're starting to see the outcomes of it being so hard to run your core business in the age of AI. And you've added all the AI stuff. Figmas added great agentic features. Canva's a little slow, but they've added it. Even that's it's just not enough and you're seeing gravity way you down and it's a tough job today, right? I think that's actually super interesting meta point, Jason. You're right, because I tend to be an incrementalist, but there are times when the world opens up and there's a crevice between the before and the after. And if you make that jump, you got to make it quickly and there comes a time when the gap is too big, right? And that's what you're saying here, right? I've come to the conclusion that this could be one of those times and to some extent there's going to be a lot of, we saw it there, there's going to be a lot A lot of people paying the bill in 26 and 27 for a certain amount of hesitancy in 23 and 24. Can you give me an example of a Figma or a Canva generation company that has gone, "How? I see this coming. I'm going to move fast and how with it they've done it and done it well?" Well, I mean, look, the boring one is obviously in a calm. We've talked about a lot and we were investors, so I don't know. But they succeeded and did it. And I think I'm sure when, after the deal goes on, it'll be the first to say that was a journey and a wild journey and a hard journey. He earned every dime. Let's put it out. So I get incredible to that. But I mean, just trying to think here, it's a hard one, isn't it? Because the interesting thing is, to some extent, and we'll talk about, for example, at last year and in a second, one of the big questions is how much of your business is going to change? And there are some businesses that just by virtue of the software process they automate, does not go into be as much change. I think, for example, I think accounting, we're looking, we have real interest in the next generation of accounting companies. But it's a fairly slower moving market than, say, individual, pro-sumer creative tools. So to some extent, the speed at which you have to move is in part a function of the kind of business you have. You know, I'm just thinking about it. Actually, I won't give you some because they're right on the head. Some of the coding tools, I think even, I think they didn't have a big business, but I think WinSurf and even, come on, cursor, were doing something else right at the start. But because they were super small, they pivoted in 22 really fast. I don't have a good, to your point. I take coding as the best apps market, right, the biggest. I don't have a good example of a 2020, 2017, 2018 coding company making that pivot. Rapletz, an example. It was frigging in the wilderness for six years until it added the models, right? It was a super nerdy web IDE. I think to answer Harry's question, it's a tough question to address as investors and employees, which is the ones that have accelerated, right? The pre-agent to ones. The ones that were in catch the wave. The data dogs, Cloud Flare, Palo Alto Networks from last week. These were guys that were already, even, I didn't think Twilio would benefit from this Jeff Lawson sought when he was on this pod, right? He's like, agents are going to need more. They're going to need more voice and more text. So Twilio, which was the hipsters, API for voice and data when we all met, Jeff, it became your grandads tool, but it was still well positioned for the wave. He was holding a boogie board just right and the wave came in and he's flying and freeing chat GBT is just tumbling pork, Hanva side over side. And I think in the enterprise, it's happening is just slow. It's just quarter by quarter, it's slowly happening. Well, I want to make a distinction here because I think the data dog example is an interesting one. I think you have to distinguish between, it's easier to survive if you're well positioned and don't require a business model change versus if you're not well positioned. And I think the challenge, the toughness of the task facing the CEO of data dog versus say the CEO of Hanva, very different. Could you think about data dog? They sell observability. They sell it to infrastructure vendors. Nothing in their model has changed except there is now an infrastructure vendor who needs to buy a hundred times more data dog than anyone else has ever bought. So all they had to do was show up and sell more. And that's true for all those guys here. We were lucky enough to be in J.F.A.G. You can see that cloud-fledged data dog, all the info providers, it's not like they're inventing a new thing. They're just saying, this is the greatest infrastructure boom in history. I sell infrastructure time to make out like a banner. There's some tweaks at the margin on the products I agree, but fundamentally that's it. There is one, there is one that a captain obviously, just so I don't get flamed in the comments too much that did it. I don't know all the reasons, but I can think there's two important reasons. Obviously, Palantir did it. Palantir went from 18% growth to 98% growth, right? I think it went. Unprecedented in our lifetimes, right? It may be the one of and or the n equals one. Maybe it was well positioned. The thing was it really leveraged a combination of outcome, base deals and pricing and true FDs that no one else, we talk about FDs all the time with our portfolio companies. It is shared to say they're really solution architects or SES with an FDT shirt. Palantir had people who for a decade and a half were out there deploying business massive change in the field for their customers. Their customers needed AI. They had the guys to do it, right? Then Alex Carp did the crazy thing, which the VCs talk about, but it's hard to overcome. He did outcome base deals. Give me two billion. I want a two billion dollar contract, but I'm going to save you eight billion or I'm going to give you six more billion of revenue on the come. No one does that outcome. They talk about it, but they just pretend that they do it. No one puts a two billion dollar deal on the line for an outcome based resolution. They had both these things that can was on the pro-streamers side, but the enterprise is very hard to change to true outcome base pricing and to have a suite of FDs that can deploy AI. I really wonder if the average SAP SE is literate in the models as they are at Palantir. I think, first of all, I totally agree. We talked in for and now we moved on to apps and in the apps. I think Palantir is an excellent, possibly unique example of someone who is, it's very interesting because there existing model wasn't that threatened, but it was growing slowly, very government-centric. And if you read the book, the Palantir, the car biography, huge credit to them in 23, 22, 23, they saw the LLMs and they groctored immediately and they said, going back to the thing about making a bet in 23 that come good in 26, they basically said, we're going to put all our wood behind this. We're going to build the enterprise version of the product, I can remember the code name for it now. We're going to make this bet. And you write, and it turned out that the combination of AI knowledge and FDs was exactly what enterprises needed. So I agree. That's an example of someone, someone like a rep that had to rethink everything and pull it off. Someone like account for still has to rethink everything and has a lot of pressure on it. Palantir could have chugged along a 20% and been roughly fine with the government. Instead, they grabbed the moment. I'd give them the positive grab the moment award. You with me? It's one where I would argue, I'm like a data dog or somewhere where all you had to do is do the same thing. That's one where you have to give the CEO and team credit. They said, if we turn the crank even slightly on our offering, it will work for a whole sweet, more customer than we've had. So I agree. I think that's a good example of grab the moment. And I think replic a good example of doing the even harder thing, which is, shit, I got to do something else, but if I do it I'll win. But there's not many. There's not many. Ding, ding, ding. If I just do it quick far, I don't want to take it back too much, but just a lot of LPs listens to the show and they have Canva in their books and they're going, what do I do with that? How should they think about that? Give them what we've just said. What do you think it's worth? I'd say it's probably worth 12 billion right now. 20% growth at 4 billion AR in the current public markets and not accelerating. There's some sort of rule of 40 number that's better about, I'd say it's worth about 12 billion. You might be right, but I'm going to push it. What's interesting is I can find new companies like that are in 20, 25% gap revenue growth, free cash flow positive or trading significantly above that because there's no existential question. I mean, what are the big things that's happening? It's like a data dog or I think a cloud fair or a j-fog or all those guys. They're mid 20s growth, 20% plus operating margins trading at 15 to 17 times NTM. I think the difference is there's no existential question here, which is why maybe I'd answer the question in the following way. If it's 20% and the existential risk is there, then Jason's right, it could be 12 or less. If they can transcend that risk, you're still top stop by, you're going to be grounded by reality now because you're not selling Brave New World, but it's kind of 12 and up. Listen, I hope you're right. I don't want to be negative. I want Canva to defy gravity. When every single person on Wall Street uses chat, why do you think people won't? I think existential risk is both reality and perception. Why do you think it won't be perceived as having existential risk if Monday and HubSpot do? I don't see why they won't see the exact same thing for Canva. I'll tell you exactly why because you are in the short term they will, but if you look at in the short term, they will lose. You can control that. You can control what the 27-year-old Wall Street thinks, but let's take the example of it last year. We had Mike on as well, right? They killed it last quarter. The only way you prove that you're not dying is by growing to Jason's point, right? The thing that's pleasing about life is if you pull off the important thing, the hard thing itself, then the markets will follow. Right now it's a very tough time because when the existential risk is posed, the only way out is to prove it. Right now I think there would be a wide variety of perceptions on valuation. That's something like a prosumer, Conor like Canva. It'd be hard to peg value and hard to get liquidity at scale, by the way, which is one of the other things about at the margin, a difference in a private company and a public company is when the window shuts and private and the appetite dies, it's very hard to get anything done. So the real answer to your LP is it doesn't matter what you think, big guy, you win this journey for the next 12 months. Buckle up. It's also important, potentially. I mean, I don't want to over-cub it. I'm not exactly a public company PR expert, but I do think it's important to get ahead of the narrative of where we're always describing. I do think that once everyone starts saying that chat GPT is killing Canva because you can make poster size images for free with your subscription. It's just like the dumbest, I think the three of us can probably agree. One of the dumbest AI memes was that everyone would vibe code their own serum. Even though Mary's had guests that do it, this makes no sense for 99.9% of the world. You can't maintain it. You can't build the integrations. It's more complicated. Most of the folks that say that have never used a CRM, it's so visceral. The idea that every one in, and that's damn 20 VC show has been part of it. Bringing in all these guests who are trying to hide slowing growth by talking about how they built their own CRM. But I mean, it is taken hold, right? And. the shorts have jumped on it and the haters have jumped on it and so be it, right? But if I were a candidate, I'd be worried that this would become a meme. I think there's a quote something like, the worst thing in the world to fight is a bad idea whose time has come. And you write everything's yes, and you're seeing that in the SaaS apocalypse now and the only way out is true, which if the companies that have produced or have a new growth have seen upticks and overall world clouds up 50% since the bottom of the SaaS apocalypse, but the people who struggle are still struggling. So you write, you will have to prove it. I don't know what worry. What do you think the answer to LPs is I guess, obviously, I think after air table and this canve a quarter, it's probably time to be a little extra skeptical of marks. Just being realistic. These are two events that I think have quietly hit old marks. You should have marked them down last year. These are events that are difficult to hide. They're difficult to say, my guy is going to turn it around, okay? After these events, I think they do kind of shake the ground a little bit. They definitely do. And it's funny because just taking the air table of calm. The old's is to mentally say to myself, I'm sure you did air table and notion, you had them in the bucket of being the same. And then I don't know if the sacronomas are correct, but notion is apparently 800 million growing at 70-80%. Goes back to the same comment is, when I think about valuation, stepping back, at a minimum you have to look very objectively at the actual growth rates and be brutally honest as you think about valuation, well, so that growth and that projected forward growth. You gotta ground yourself in those facts of step one. And then the question, the second order question is, do you grade up or down for existential versus lift? But at a minimum, yeah, it's a long list acceptable to say once upon a time we raised it 42, therefore we're holding for 42 billion, right? It's, we're doing a billion, we're going at 30%. That is this multiple. We're doing a billion, we're going at 10 that justifies that multiple. I totally agree, Jason. For me, I thought actually one of the tweets of the week was Dave Samuels. I think his name from freestyle. You mentioned that a blended exit price from our table was actually six billion and the importance of selling along the way and being very thoughtful about selling in the good times. Totally. And it's always true when it goes down and it's never true when it goes up. One of my great friends is a multi-billionaire and he told me, you know what, Harry, I never regret making millions of dollars and I say that you're in my G650. And actually, you know what, I've sold now stuff and yeah, I've lost on upside, but you know what I'm happy that I've lost in some wins. Yeah, but here's the thing. I mean, we can move on. I get all that the freestyle argument. It sounds great on Twitter and it's mathematically true, right? But if you want to have an outlier fund, I don't know, man, that math really only works if you got like a six or eight of them in the fund. Unless maybe, maybe the scale size or bigger, the math's different, but for a smaller fund, I'm lucky to have three fund returners. Okay, that's hard. And if I start taking early exits on those and I don't have a 10x fund returner. Okay. And my LPs want these friggin five, six, eight, 10x funds. The math gets kind of tricky if you sell too much early. I don't care what X says. You got it. You got to keep doubling down. And I literally just did this analysis across my whole lifetime of all the things I've been involved with personal angel venture who should have sold and who should have sold earlier taken the secondary. And for me, it broke roughly 50, 50. So, probably the thing I would have guessed it would, I mean, statistics would say it probably breaks 70% you should have sold. I mean, I can tell you what the facts are. 70% plus you should have sold 30% or less you should have held. But the next sentence is the key. The holders compound forever and the ones you sell don't compound at all from then on it. So it's the, I'm going to pronounce this name on the guy from Arizona State, the bookbinder research that sub one percent of all the companies ever give 90% of the cap gains in the public markets. It's the same in the private. It's just, it's the nature of power laws. Most of the time you won't regret trimming, but on the few that you regret trimming, it turns out to be most of the value. I'll never forget having Jake Saperon from emergency. I like a lot. I like emergence, a lot brilliant fun. But like, you know, they sold Salesforce reasonably early in the arc of the Salesforce value accumulation journey. And I mean, if everything else didn't matter and there was just a hold on that decision, it would dwarf all the other outcomes. We can choose to continue in this vein and discuss at Lassian and HubSpot. Or should we talk about Jeff Dean Google talent changes? I mean, I'm not an expert on the Jeff Dean talent show, but it clearly is the time to go off and build, man. Let me leave the comfy coop where they can nine figures a year to just talk about AI and a comfortable conference with the Morgan go out and do it, man. So let me provide some context. Google had some talent loss. Jeff Dean, one of the godfathers of much of AI has left after 27 years, taking three legends with him. I'm going to pronounce their names wrong. So I'm going to leave it there. And then Dennis also is like stepping back or whatever elegant marketing message we want to put around it is like moving into chairman role, power centralizing back really to Silicon Valley as well with that. That was the big news from Google and obviously shares tanked as a result. I actually think Jason made the best point, right? So first of all, in passing, it must be extraordinarily validating if you're Jeff Dean to leave as a non-CEO of a two or three trillion dollar market cap public company and have the stock go down by a couple of hundred billion dollars. If you want to increase your sense of self importance and self work, that was a good moment. That was what the therapist called validation at a high level. So move on from that. I actually think Jason, Jenny, one comment here, Jason's take us to correct one. We can analyze what it means for Google. But think about it. If you're Jeff Dean, you've done 27 years at Google. You've made gazillions of dollars. The mission at Google to a rounding out like it or not is allocate a lot of the compute to Google Cloud Business to just be a hyperscaler, boring a shit to you. Allocate more of that, the remaining compute to build a competitive frontier model, mainly focused on the big things of consumer, because that's what they care about and coding, because that's what they care about. At this point after 27 years, fairly boring to you and get some time to do a little bit of medical discovery and scientific discovery that's really exciting to you. But because of the relative size of those businesses, that's always going to be in third place. That's option A. Option B, you can go raise all the money you want. I mean, it was really sweet that they even built a PowerPoint. I doubt they needed to, right? I think high Jeff Dean I'm raising money would have suffice and go away and do exactly what he says, which is use AI to quote investigate advanced scientific questions. What are you going to do with your late 50s in life? It's totally natural. I didn't buy that. I'm not being rude. Sorry. If you look at the resources he had available to him at Google with the data that he had available to him at Google, he could go into Sirgan Larry's office and say, hey, I want X. And they would say, Jeff, you have whatever you want. I don't think that's what's happening with all due respect. I don't think that's what's happening. Right. I think what's happening is every piece of compute that you give to Google Cloud turns into 30% operating margins in a day, right? Because they can sell it to one topic. Every bit of compute that you give to building Gemini might turn into a decent coding model if they get the shit together. And maybe you can get some on topic like revenues or some chat GPT like consumer revenues, right? And then you can get a lot of money. And maybe just two small things, but when I think the nodes leading the round, right, or Kohli? leading the round or something. So he's just redoing, he already, he already granted opening. I hasn't gone public, but he's, he's already had a little bit of a win here, right? That guy's a node, right? So he's just doing the playbook again. And then two, going back to Harry's question of LPs, you know, I think this week, it's, it's a little murky. I'm trying to read the news from why I'm not quite in this FB. But if Anthropic really is going to IPO for now for real in the next 60 days, it's just going to tangible eyes all this once again, right? Hopefully, hopefully for the better, and then maybe slightly for the worst, but it will make these bets seem more, more like the present, right? And the canvas and friends more, more like a distant memory, a distant memory of a bygone era of software. Two questions for you. How significant is it losing this many high caliber people this quickly? We haven't mentioned damage, obviously, damage, founder of Deep Mind, led London AI efforts, visionary, genius, unfortunate to interview him. How significant is it honestly to Google? On one cent, obviously, look, early on this business had been very individual centric, so losing these two talented people in terms of full-time thing, and the three people who left with Dean is obviously really significant. On the other hand, just to put it out there, whatever was Google was doing wasn't quite working. And we've gone through the Google is dead phase 12 months ago. Then we went through the Google is amazing phase six months ago. And now we're kind of going to the in the middle, which is Google's doing a good job in cloud selling compute to Antropic. They're doing a good job selling the picks and troubles of TPUs to Antropic. They've kind of got a model out there, but they haven't met any impact whatsoever in coding, which is the model load that's feeding the Antropic beast right now. So you could look at it and say, Google's effort so far, or B plus A minus, they're not A plus. So I don't think anyone wanted anyone to be really clear, but it's probably been on satisfactory to go, I mean, could you can imagine you're the CEO, you're coming in saying, you're saying to you two most talented human beings, one of them has a Nobel Prize for medicine just to remind you, why aren't we building a better coding model? And they're still under thinking, why haven't we cured Alzheimer's? You know, at the end of it, that's a really boring e-staff meeting because we're just talking past each other in a perfect world. I mean, this is only what they got rid of two years ago. In a perfect world, if everyone had been self-actualized, then have put someone like the guys wanting it, a tactical executive in charge of grinding out this and maybe given these guys more running room more early to do fun things. Because I think that's been the dynamic all along. If you read the Maltby book about the Deep Mind acquisition, all along it's been how much corporate shit do I have to do? Because what I really want to do is get a Nobel Prize. And who might argue? Will remember the Nobel Prize long after we forget the Google Q2 earnings, right? So he's entirely right to want to do it. But unfortunately Google has to make Q2 earnings. And if you're in the CEO there, you need an executive who wants to drive, drive what it takes to get a comparable chat model out there to compete with ChatGPT, and a comparable coding model out there to compete with Antropic, neither of which you've done now. So if someone comes in and says, "I've launched this initiative and I think in five years time will bring out a simply amazing drug," and it will, you know, cure cancer, cure Alzheimer's, whatever. Your brutal comment is, the correct response is, "If we do that at the expense of a coding model and a chat competitor, that's a mistake and our stock will go down by 50 percent." Because the largest drug company in the world is Valia de la Trillion, and Google Valia de Trillion. So the corporate imperative is to get someone who wants to do those things, not someone who wants to save the world. It's super difficult today. The best AI engineers, the best AI researchers really want to work on what they want to work on. And they don't want to work on stupid things, and they don't want to work on obvious things. They just, they really only want to work on stuff at the absolute cutting edge that is extremely intellectually interesting to them. They don't want to work on anything else. They just don't want to hear it or they don't have to. They don't have to anymore. Which is why you've got to admire the brilliance of the team at Anthropic that they have simultaneously managed to not convince themselves, because that's our judgey. They feel they're on this mission, you know, public benefit cooperation, a mission to bring AGI to the world, all that good stuff, while simultaneously making every single correct rational financial move over the last two years, including to your point going public first, which I think they will as soon as possible, because they'd be insane not to. And the one thing we can stipulate is those guys are not insane. They are right on it. They will go public because this is peak brass ring moment. And you know, you could argue the trends in 27 are tougher. You've pulled ahead at chat cheap. So just put a nail in the Anthropic period, right? You've pulled ahead of chat GPT comfortably, open AI to a point where it's embarrassing. It's never going to be better. There's just been a trillion dollar IPO that all in all went okay. It's back to its offering price. You should go. You should go now. You should go fast. You should be done. If I'm the founder of a company, an early stage company, do I just accept that I'm going to have beat here or seat here AI talent? And I don't mean that denigratively or rudely or horribly, but that are an anthropic and open AI. I mean, Google can't freaking keep. I think it's the wrong framing, because if you think about it, when you were building a software company in the age of the PC, you had fought to your chip talent because you weren't building a trip. The point is, if you're an AI company and you feel they need to build a frontier model, then yes, you've put yourself in direct competition with someone and if you don't have the good people, you're toast. So what you got to do is make the model a compliment and have a tier talent that you are. A tier talent and AI implementation. A tier talent at the things that you have your competitive advantage in. Even the very best companies that are taking open weight models and fine tuning them, they should be experts at fine tuning. They should be expert on their data domain, but they're probably not going to be as good at kind of building an LLM from scratch as the guys who'd been doing it for the last three years. But that's okay. One tough thing though that is happening that for sure is that I think when we started this show, there started to be sort of two tracks on compensation, which is I have to have I have to break my salary bands from my AI guys because they're worth so much to anthropic and open AI. Now we're seeing three bands of compensation. We're seeing the regular human beans. Then we're seeing the AI guys and then we're seeing the one to five superstars that we're talking about. That I have to find a seven figure package for as an early stage start up because they're going to get it. And we have to provide them everything. The outsize equity, the outsize cash. Especially when you talk for folks that are mature, the hundred million in up air, our guys 200 million up, they all have this, this God tier now of compensation. And it's, and if you have the revenue, it's sort of fine. Right. You can afford. If you're doing through 200 million revenue, you can have four God tier employees. It's not going to break your, your, your model. But it does. It is something the folks have had to accept. There's a bunch of CEOs I work with informally that I'm not an investor with that I work with at that scale. And they've all created God tiers. They're like, I got four guys. They are the core of my next generation product. Okay. They're all making seven figures. They all have like, they all have equity stakes. Sometimes what an employee at this late stage would have. And the best investment I've made like this God tier. But it's tough on the rest of the team, right? Because it's not the way we used to do this. Coomba style when you've got this God tier. It's tough. But you're not going to pull off a palantir and intercom without a God tier. You need a skunk works and you need a God tier. It ain't going to work. It's just the siren, the siren call of the anthropic comp is too high. Oh, but I just did a secondary of seven billion. Didn't it this week? Something like that. That sounds pretty good to me, guys. Markets and prices are all about incentives and signaling, right? It's just, it's a way of sending real information. And it does know that that, you know, I saw the analysis that someone who got a million in stock and an anthropic in 23, it's worth 51 million now. That's a signal that just ripples through the hiring environment across the entire ecosystem. Now I would remind everyone that that's what's known as a one in a lifetime change. I don't think the person today would be getting 50 times the return. But whatever, it does have an impact of just distorting what everyone thinks is possible. And, you know, we are naturally attracted to narrative around the outliers. That's not the norm. But yes, that is the California Gold Rush part of the story. And you're going to see it even more written when the pricing happens. The only other thing I would just add, or if you're not, how do you compete with them? Right? How do you compete with that? I do think you might have to have a God mode compensation package. The only thing is a lot of those jobs, the jobs that you're offered for those job, they do go into it. Roy's earlier point, they do kind of suck. They're not all Jeff Dean and buddies sitting around in a whiteboard designing the future of fabled the seven dot two. A lot of these jobs are for folks that aren't quite at that tier are not that great. And so that's always been the job of the founder is to find those pirates and romantics at the edge that could get it, you know, back, back when I was a founder, our test was always, did you get an offer at Google? If someone got an offer at Google back in the day, you knew that they were top 10%, top 5%. You could do the same test today. Did you get an offer at Anthropica open AI? And what was the offer? Well, that flashing thing in in cloud, they want me to work on the, the, or on recolor blind, the red or orange thing. I'm going to make a million dollars a year, make getting that pulse just right. Or I got to work on watermarking my first 18 months. And, and so you can find the folks that say, yeah, counting software be more fun than that. I like to do LLM's for account. He's like, if you, if you got to interview everyone on planet earth and you will find someone that doesn't want that job, right? That's the job. But you might have to pay him a lot more than you had to 24 months ago. Talon is one bottle neck. Another bottle neck that I did think was a really interesting new story that came out this week was the, the backlash going fatter when it comes to new data center creation. Repro-Karna said he will introduce a data center bill of rights that will give local communities the right to say no to AI data centers. Yes, you go, Repro-Karna. That's exactly what Xi Jinping is going to say. The hero of Silicon Valley Xi Jinping is going to say, stop you deep sea, can you shoot? We don't want that in this rural community. What a frickin joke. Hey, I have talked with some folks who truly are experts at this, right? Most folks think that like this is, this is pretty lame. This is pretty dumb this NIMEism, right? It's bad for it's, it's even crazy that Texas is in on it, right, is in on the NIMEism. And I think Elon pointed out that the tariff abs already created 3,000 jobs, but it's only 10% capacity. It could be 30,000 to kind of get folks to see the other side of it. But I think folks that are close to it think that there will be enough counties and jurisdictions that want these data centers that as we push through this and as government gets on the other side, it will ultimately gonna work itself out. Like this will not be one of the great issues of our time, even though it seems ridiculous today that you don't want these, but they are, you know, there's only so many people working at these data centers. But if this one may work itself out, at least that's what folks have talked to that know it more closely than they. - Do you know what I think this will be a material blocker in our speed of deployment? - Well, we have 50 states and I don't know how many counties we have. It's a lot of counties. Like there will be some with water and power that want this business is the meta point and that also this backlash isn't gonna last, right? These are not all destroying our water tables. These are real jobs, 300, 3000 jobs for a lot of poor communities. Let's not mock it when they have, I mean, I mean, this is such an entitled podcast. I mean, go out to the goddamn panhandle and no one's making 50 grand, right? So these are not enough jobs, right? To make up for, but these are real jobs with real money and they're gonna last years and years and years and they bring a limited amount of economic benefit. But it is a bummer for places where we should be building these data centers, for sure. It's not a net positive. It's just a question of will it work itself out in the US where we do have competition. We do have a nice set of competition here, regulatory competition between states and counties. - Yeah, the irony of who kind of, you know, the Silicon Valley congressman turning into the Marxist wolf in sheep's clothing is pleasing to me as I would not tend to be on that side of the voting aisle. Just watching all the dams get suckered into thinking he's a moderate, has been worth the price of admission as he starts advocating the billionaire's tax. So there you go. But who am I to show? - I mean, I mean, millionaire's tax, where I think you've got to be. - Yeah, that's exactly right. So that's not funny in and of itself. But you know, once you elected congressman, your next step is up and the truth is, the way to elect all success probably lies to affirm on a populism for the next period of time. So on the data centers, I think, you know, it's so good piece of the Atlantic or something really, just talking to people, you know, in the areas wrestling with these issues. And it was very interesting point. It was much less even AI is awful and much more, I don't know what I'm getting here. It's all very opaque. What's the deal? And I think if tech wants to get this stuff done, there's just two risks here. And it almost opposite each other. Because if you want to get local support, you got to figure out what's the package that moves it for them. And it definitely isn't, oh, by the way, you're going to get a 25% increase in your electricity costs. And you're seeing that now, people are, and I think the smart people are saying, at a bare minimum, if you want to get a data center in here, you got to find a way of making sure people aren't going to pay for electricity. And there's probably going to be some kind of dividend. If you tell people that, you know, you're going to get this job business, there's not going to be an increased electricity. And there's going to be, you know, a 5, 10 grand distribution per paper in the township. You probably go, yeah, we should look at this. The other thing is, do some of these statewide laws just make that impossible to do? Because the truth is, at the moment, there is a fair amount of, we hate tech blows out there. And as we said a million times, it turns out if you spend three years saying, AI's going to kill you all, you shouldn't be surprised to be hit. So I think there is some wood to chop technically. But I do agree, Jason, it's a great point. One of the best things we have over here, unlike, you know, I said, the UK, which is one of the more centralized states in Europe, in terms of central authority and the Burnham's trying to change that. But we got 50 states, if not Dakota hates this shit, but South Dakota likes it, then South Dakota can put something in place and it can happen. The UK is like the size of South Dakota. (laughing) - Yes, and my point is, we've got diversity here in terms of, so hopefully it won't be a huge block. I mean, right now, the practical point is, it's actually the availability of power rather than just pure data center blocks. But there's definitely a whole series of things, slowing things down between power availability, computer availability, and then political willingness to turn the stuff on. - Now, the main man himself, always liking an ambition, Mr. Elon Musk, unveiling TerraFa, which we touched on there, $16.8 billion. I think it's gonna be the most expensive build out of like a real estate project, I think I read. As we said, in terms of jobs, extraordinary in terms of how many jobs will be delivered, different numbers, but between two to 3,000. It really it's him saying that he wants to sidestep, TSMCs, Q, and obviously build out his own fab capabilities. How did we think about this news? Both in terms of the strategic decision and the scale of it. - Look, this is someone with boundless ambition, plus success at delivering on this boundless ambition, plus access to capital and unprecedented weight. So he's probably gonna try and do all these things. It feels wildly ambitious to, you know, you have to build the gas turbines, to build the fab, to build the robots, to build, you know, it's like vertically integrated on every level, but he has a piece of vertical integration that's been superb, which is satellite launching integrated into Starlink, has been superb, vertically integrated, right? You can join the dots in the pass and say it all makes sense. I continue to think the scale of ambition, if there's any slowdown in the AI spend, then the all in bet is the one that slows down the most the fastest, and this is the all in bet. So, you know, watch your space. But right now, he's got the capital and he wants to do it. - I think that's right now. I just think at the end of the day, he's beyond all that, he's just saying, listen, there's a decade of supply chain limitations. It's gonna damage my ambitions. I gotta do it, right? I have to do it. It's just, this is also unprecedented, right? It's not just the investment that is unprecedented. It is, you can't get RAM, you can't get chip, you can't get what you want, right? We've had limited issues in the past, but I don't think we've ever looked forward and said for a decade, I'm not gonna be able to get what I need or on a cost of effective basis. I can't even get TSMC on the phone, 'cause Jensen's out there all the time. I could be wrong, but in my career, I have a limited amount of experience here in the old days. I don't think it's ever been like this, where it's, you could, it almost feels like infinite time before I can get the capacity I needed any tolerable price. - Yes, which is why it's super interesting to tie in something Intel is part of the terrified consortium in such way. And I just saw it today. I did not notice, Intel completed an equity round, which I read someone I haven't verified it is, the first time they raised equities since like they went public in '79. In other words, they've been profitable from cash flow and returning capital like a real company is meant to, for the '80s, the '90s, the 2000s, the 2010s, right? And now the AI CapEx boom, plus obviously they're deteriorating performance, I said, it's time to access the capital markets again. - While we're on Elon Musk, Elon Musk did have a very unusual incentive package, where his obviously expanded with the expansion of company valuation, Revolut announced an incentive package to the CEO or it was leaked, whereby it basically ratched it up with different prices of the company, and get another, I think, five to seven percent, at 200 billion, and then he ultimately at 500 billion would have circa 39 to 40 percent. Is this the new norm? And should every CEO be asking for rated incentive packages alongside valuation bumps? - It's not going to be the new norm. And if it is, largely, the stock prices should go down by 10 or 15 percent, because what you're basically saying, I mean, I read what's available about the package. And the first question is multi-year packages, and with incentives around market cap, and in other words, significantly beyond the normal CEO comp, that's been a thing. It obviously worked for Elon in the first, the 2018 Tesla package, and obviously after a lot of towing and foeing, he got another package just recently, finally approved after they moved to Texas. So they're not quote the norm, but they are put in place for reasons we'll come back to, for a small number, typically, of founders who fully vested in all their shares, and who feel who want to be incentive again by boards who feel that they have to be incentive again. By definition, that's not quote the norm. 90 percent of public companies aren't run by the founder, and frankly, the number of people willing to run a public company for $10 or $20 million a year turns out to be remarkably high. All right, so no, they're not the norm, Harry. Are they the norm for founders? We're seeing some of them. Most of the time, I think, especially if they're badly designed and focused on market stock price only, they typically, they often fail. We saw a whole bunch of them in 21 that gone unwound in 23, 24, because they weren't based on operating performance. They were based just on, hey, if the stock is at $200, we'll give you more shares. And then what happens is the CEO executes brilliantly, but the market is down, so he doesn't get his shares. And he comes back and he says, look, I've done my job. Right, forgetting that he would not have made the same argument on the other side here, right? So the record is fairly mixed. But at the same time, I'm going to acknowledge something for that special thoroughbred CEO who thrives on challenge. You can put them in place if the incentives are right. And maybe you do get extraordinary performance in return for extraordinary comp. So it's not utterly crazy. There were very high-cost, focused instrument. And I think boards have to be fairly careful when doing it. I'm not, for example, a fan of the purely stock price-based ones. And to refer to Elon's 25 package, we're going to over this before. It was a great package because it had, you have to do Mars, you have to do Optimus, you have to do lots of cars. At that point, give them the damn money, people. Now, interesting comment. So I think in the journal today, there is a clause that says, if there's an M&A above a certain value, you might see some acceleration of that package or haven't read the detail. But it will be interesting if SpaceX and Tesla merge. Does he hit the big catching on Tesla as well? That's what it implied is that he might hit it, just merging the companies, right? Totally. before the details worry just one quick. question to you or to you and Harry, I don't mean to interrupt, but this, when I read this, I thought it was more about control than just money. I also just read a story that the CEO of Revolute just tried to get out of paying a $20 million broker fee and a $400 million yachty bot, so clearly he enjoys the good life, right? As well as working hard, right? This is not, this is not a CEO that does not care about money, but to me, and I think that Elon was very clear on this, I need to control these companies or I'm walking is what he said when the first one failed, right? So if Nick owns 40% of Revolute, he controls, especially with, I'm sure, a super majority board and all that, it's his company. That's what he wants. The money I'm sure is part of it, but this is not going from 2% to 6%, this is going to 40% ownership. That's a lot. If he made that argument to me, it's about control, and I was a chair of the Com Committee, I'd say you're exactly right, Nick, so I'll tell you what would give you three votes on each of your existing shares. Now you don't need control and you don't need any more shares. And he would come back an hour later and say, I also want the money. Right? But I will say, I think we've all learned that there are limits to super majority shares. We all learned that there are other sources of pressure, whether they're VCs, shareholder activists, other issues, that there are levels here of control. And you can control 99 out of 100 board seats, but if you own 6%, you may get pushed out of your company. It is entirely possible unless you'll go to the mat on it. I can talk for hours on that, but I do think Zuckerberg will be an example of someone who's controlled. Because you can write Ironclad Control as a public company if you want to. No, but you can be pushed so hard that you walk it with 40%. Goodbye, guys. I would just end the Zoom with Wall Street if they didn't like what I was doing at Revolute. I'll just push the button and say goodbye, guys. Go short and see you later. You say that what actually turns out your problem, yeah, you can ignore people, but you can also, they can choose alternate to buy your stock. But super interesting thing happened today on the control thing. It's going to sound unrelated, but humor me. Right. If you read it, one of the things, remember, this is a person who controls his board absolutely. You are just literally, you know, you can show up. You can tell me what you think, but in the end, I control it. It was super interesting. And he's pretty much had that soul control. He said as part of kind of how they think about governance, he didn't want personal control over the decision to release new models. It should be a board level decision. I will admit, I'm like, hmm. And that, to me, was an example of, yes, Jason, you can have control over everything, but then you own everything. And at some point, even if you say you want 20% of your company, but you have 10x voting control, you can't make them buy the other 80% so you can keep your stock up and you own every problem. And this might be a very smart man saying, I'm not sure I want to be the sole person releasing these. So it was super interesting. It was the first piece of uncontrolled, the Zuckerbergs done in 20 years. So I didn't note that in passing, right? Because control is interesting because even when you have it, and I actually have changed my opinion, because bone public is so shitty, because of all the public, I've actually come to conclusion that giving founders more control over their life's work, which is what it is, is an acceptable price to pay to incentive to go public, right? So I've actually changed my opinion on that. I actually think, even though some of these control things are weird and I do think that poverty shouldn't be in passive indexes as much, there should be some discount for that. I've come to the conclusion that weird control terms are an acceptable part, because otherwise everyone just does what the calluses do and say it's private, I don't need your shit. But let's go back to the money because in the words of, I think Senator Dale Bumpers in Clinton impeachment trial, when they say it's not about the money, it's about the money. I think it's about the incentive. I don't think it's about the money. I think your point was so good, Roy. I don't think I've heard it express enough that way. Knowing public sucks so bad, they look at the public money CEOs we've had on this show or Harry has, it sucks to be public today. Okay. Yeah, it was fun during lockdown when you could grow 90% without a new feature. It's not fun. And I can't imagine being, having been a founder twice, I can't imagine a helpless feeling as a public company CEO, I'd want to quit. I would just hate it, right? Having control and equity has to somewhat tie to it or it's a partial fiction would make it worth it. I guess what I might leave the keys on the table, if I had no control of the company I found it, I'd already made plenty of money. I was diluted to nothing. I had a board that didn't understand my product telling me how I run my company. I might just sort of leave the keys for you guys. Agreed. And I say that, not because I like it to be clear. I say that because I'm just looking at people saying private. I mean, I think the real solution would be when the private capital markets evaporate, deteriorate and then they will go public because they have to, but that's by the buy. So I agree with you, just on that. But on the other hand, let me take the other side of it now. On these kind of deals, the thing you look at is the participation rate, which is how much of the total creation and value is going to the CEO. Right. In other words, the way this deal was announced and to be clear, it's not been put in the revenue deal going back to that. It's not been put in place yet. It was something like, you know, for his existing thing, he gets it to 200 and he gets to 30%. And then if he gets from 200 to 500 in value, which is 300 million in Delta cap, he gets an extra 10% of the company, which would be 50 billion, which would mean that for 300 million in value creation, he's getting 16% of that, which would be a normally high to be clear. Right. I think 16% 16% and normally high. Right. That's less than our carry checks. Those are 20. This sounds low. If I can tell, yes, but if you're if you're getting it on. 20% of my portfolio does after a certain point, Nick's only get poor Nick's only getting 16%. I disagree. I think that the mark. I mean, you think you're working harder for your portfolio than Nick is working for Revolut? No, I don't think it's about working harder. I think the nurses and fucking emergency room are working harder than both of us Jason. Right. I could not agree with you more. Okay, let's go for it. Right. The question is, do you want to have facts taking something from 200 to 500 billion gives you 50 billion dollars, right? Do you think you can get a Jamie Diamond level CEO for 10 billion? I mean, he's only made a billion taking it. It's too high. Let me tie it back to a different point. Then you can challenge me on this all you want. Harry asked what should LPs do looking at this, right? I'll tell you what I'm doing. It's going to be a zero. I look across how you we have different portfolios, but the ones I have that are not run by founders, whether they're at 20 million or 200 million, they're all going to be zeroes. And so if the price of me not having a zero is getting Nick to 40% in my bet. I wish I was a shareholder. If I'm balled or to whoever, this is my best name. And that's the price. I'm going to pay it in a heartbeat because I do not believe Jamie Diamond's lieutenant with his starch shirt and his blue and white collars and his and his cufflinks can run revolute. It's not that mature that space is not that stable. I don't buy it. And I'm not a, I'm not a banking expert, but I don't buy it's possible. I believe he will run that company into the ground just like every non-founders run my portfolio companies into the ground. I'm going to get killed if I didn't say one thing here, which is all full-migast Nick Ash. Yeah. I just know my portfolio will be zeroes without the, without the founders. I'm not saying there aren't examples out there you can find. I just know for me to the LPs, there's zero, they're all going to be zeroes no matter how much ARRs they have. They're going to be zeroes. And this is the question is and that's totally true at 1 million, 10 million, 100 million, maybe a billion. The question is, I think Revolute's doing five billion, I used to know what five billion in revenue and a billion or two in profit, right? It's an extraordinarily big and very impressive company. At some point it becomes not true or maybe the better statement is this and this is the interesting one because I know this sounds really negative but remember going back to interest it's a corporate governance question and I, having just come out in favor of founder, control, all the things I said earlier and I stand by them, you still need a dynamic to protect the other shareholders because if you take the logic to exterior, my son Nick, I'd Revolute made a comment. It's a very interesting comment that I think is bullshit. He said and it doesn't sound bullshit but it is when you think about it. He said quote. I deserve more because the investors after they give capital, they do nothing else and that statement is the first, the second half of that statement is true after investors give you capital, they do nothing else. That's the world of capital. But just because that's true doesn't mean the founder can, I mean what's the limit then? Or to put it another way fast forward 30 years. What's the limit? I think the world has changed. I don't think most founders care anymore and so I think you got to adjust. I think, I think Nick is what is saying. I think half the class at most accelerators agrees. I'm just going to raise it 50 and if it doesn't work, I'll just do whatever. But you're not in the nation. What you're saying there is the cost to run a company from 200 billion to 500 billion is 10% delusion. Is the cost from 500 billion to a trillion another 10% is the cost from a trillion to two trillion another? I'm just trying to get a sense of it because if it is, then two things are true. One is you should pay less for that stock because you're going to get way more delusion. Well, pitch book had an article this week saying how much massively returns are being compressed on outcomes north of 500 million to a billion that outcomes are being massively compressed by unprecedented delusion and high entry prices. So this is just the world we have to live in. Like as a seed investor, I've only been doing this so long but I've been doing it for a while. When I started, my model was, I'm actually paying twice my entry price. That's how I model. Now it's 4x. I'm going to suffer 75% delusion and that really means my entry price is 4x. What it looks like on that 50, 50 post you want. It's really effectively 200 if we if we hit it, right? I could complain about it just like the Nick thing, but Nick going to do it. The baby eons are going to get these packages and it don't really matter what I think or any of us think because enough investors are going to go along with it that they're going to get these packages. But the more important point you make is is how elite will this be reserved for? We could debate whether Nick deserves this, but this is a generational company, right? The question is, do sub generational companies get these packages and how does it impact things? Yeah, our delusional, I think all, pitch books said this week, all of our delusions undermodeled. - Yes, and look, as I say, I hate the role I've adopted in the last 10 minutes because, Jen, I all tell people, I'm generally the softy in the comp committee. I love writing big comp checks for successful equity packages, but you do have to have some kind of linkage. And someone has to sit there and say, okay, what are we getting for this? And you know, for what it's worth on this particular one, I'd probably do it, but I'd insist on non-market comp, non-market stock performance metrics. If you build the biggest bank in Europe operationally, not just on stock price value, then I would totally say you were at the $50 billion. That's why I'm saying a lot of it's really boring, but a lot of it's in the details, so you can, if you're going to pay, let me very clear here, if you're going to give someone $50 billion, $50 fucking billion, you ought to sell to spend more time thinking about what you're getting for your $50 billion, then hey, I'll give you $50 billion if it's valued at $500 billion in a few years. You probably need to think about it a little more carefully. - I think that's what you should do. In my limited experience with my portfolio, these mini Elon packages, they're basically all focused on 10X, what the last guy paid. That's all the late stage investors, you whatever I paid, $20, $200, and I just want $200 for you to get it. I don't care whether there's a little, I want to make 10X post-delusion and then you get your piece, right? So it's what you ate, but I think it's what a lot of late stage investors - It's a good thing. - I actually think you're right, in which case, given the last round that $100 or $200, that's my comment here, is that 10X that would be a trillion. In other words, the participation rate's just a little high. These are fine packages. This one looked, if the number's brutal about a real, it's probably, ooh, that's a lot for, maybe you could pay a little less and get a little more, but it's a thing. - The one thing I will say is I've interviewed a thousand founders. Sam Altman, Damace, included. I've never interviewed anyone like Nick. - Look, remember last week you asked which stock I like, I think it's an amazing stock and amazing potential in market cap. I just want to be sure I got an operational performance before I pawned up the 50 bill. - I know it's kept and obvious, but the revolution, the revolution's all all green, right? Everything's seen, at least externally. I'm sure there's stuff under the surface that's struggling. You do these packages too late, it's too late. - I think that's right. - And that also means you have to overpay and pay up, because you have to do these packages at the right time, right? You try to do this when the company's growing 4%. - Sure, but I mean, you've missed your window there. - Yeah, I actually think, and then this is the second package that particular CEO got, but yes, I agree. - Team, why do we want to go from here? We have what, not which obviously raised a very large round, 545 million at 20 billion. We've got deep-seek raising and 8 billion that reported 74 billion dollars. Bite dance, bands, distillation of US models. I should've thought was interesting. - I think we should talk about what, if for no other reason that it's such a relief that there's more to life than AI, those shopping. - There's more to life than AI is shopping, right? - I think it's a great story. - Backgrounds of people want not raised about half a billion at 20 billion in valuation, and it's a live shopping company, and in the internet equivalent of QVC. The minute I heard that story, my response was that'll work. You know why? I mean, if you look at QVC, if you look at the home shopping network, these were the equivalent in pre- and on that days on TV, live sales, right? People enjoy that shit. And someone explained to me what not did, a couple of years back, and I'm like, oh my God, that's a great idea. Now my space, now what I do, but that's gonna work. You're gonna have people live selling shit, it's gonna be a little bit of retail, a little bit of commerce, it's gonna work. I mean, if you think about it, the big three of this space have been QVC, interesting enough, by the way, that's now bankrupt, probably because all those people died, and now they're replaced by what not people, right? And then eBay, we forget it, but eBay is the other quirky way to sell shit from the 1990s, and that's got a $40 or $50 market cap. So what's interesting here is something where you look at and go, that's gonna work, and fast forward two years, and it's 20 billion. Now, it's growing to X, year on year, eight billion, I mean, you measured GMV, which is about eight billion last year, going to 16 billion this year, and then they get a 12% take. It's a great business, that's all. So I'm just like, yeah, go team. It is useful, listen, if I'm not an expert on what not, I could speak more to Shopify, which blew out its quarter two, right? It's roughly related. But I do think it's worth, I do think everyone should at least study what isn't being destroyed by AI, right? What's gonna happen with online shopping, online commerce, what's gonna happen with restaurants, what's gonna happen with cars, and it's just, there will be many good opportunities and spaces that aren't going to be destroyed by folks creating a poster in Chatchee B.T. for free, then we should just study it more. There's gold in the things that aren't going to be destroyed by AI as well as the things that are being decimated by AI. That's, to me, that's the only interesting part, right? - It's a totally different experience. - Because look, we have a lot's another example. I agree, there are two compelling, large businesses catering for real, universal human needs, finance, shopping, that, you know, building huge outcomes. I agree. AI is most of what's going on, but not all. - But if, you know, it's an AI story, it could be worth like 50X GMV. That's the only miss. Like, let's say they could pretend the GMV was rev, so what's 50X time 16 billion, Rory? Help me with the map. What not LLM would be the next trillion dollar AI startup? - Pleasing me enough, 50X time 16 billion as well as the end-foppings market counter. - Yeah, that's what I'm saying. We did another trillion dollar. This one's a bargain at the iconic investment committee. We're getting this for 20. I do think there's plenty of that out there. I think whether it's literally GMV or not, I think there are plenty of folks getting benefits of revenue that make no sense. It's not even just line or cynical. I think there's a lot of, I think investors, to some extent don't care as long as the growth's there. - Final one if I wanna shap it us. Shop of lie we mentioned, blowing out the quarter, at Blasian blowing out the quarter. But biggest jump since 2015 for at Blasian, crushed it. Any takeaways from some of the big results that came out? - Yeah, as I said, if you produce, you'll get rewarded. - Right, I was delighted because, you know, when you'd pin me to the wall a few months back and said name names, my first bet, you know, what stock would you buy? My first answer was the best one, which is just by world cloud and sub 50%. But then you kind of push me and I name some names. And one of my name was at Blasian. And honestly, two months ago, I felt like an idiot. It was still not, I thought he'd pull it up, but it wasn't there. And then obviously they nailed it. They got the growth and the stock jumped. If you look at overall, it was kind of, because you know, some people like DataDog were down a little and you kind of lumped them together on the agenda. But those are different stories. I mean, DataDog story was just everything's amazing, but our biggest customer and everybody knows it's opening eye and no one at Southrop, right? Is suddenly realized they maybe don't need to spend $150 million than a spending less. So a grow was down a little. But that's because you know, DataDog was trading at 18 times forward revenues and now it's 15. That's one phenomenon of the AI adjacent winners, which is very different than what Atlassian was going through, which was existential shit. And we're trading at three times. And suddenly, you know, we nail the quarter and it's an easy part to five times, something like that. Those are different, you know, those are different movies at the same time. What the Atlassian story says is the sale force is the hubspots and you can, but if it was public is if you get it back on track and the foot with the fundamentals, the stock will follow. But if you don't and some of the others that you mentioned didn't, then you know, you're stuck in two and three X land forever more until you get, as Jason said last week, until you get bent spooned. Yeah, I still think these are hard companies to run to your earlier point. I mean, yes, Atlassian, but Atlassian also did something which can't have been a two, which I always find a bad sign as sign of stress, not a bad, not Michael, Mike's great, but they got rid of most of the free loom seats. And this is what you do in times of stress. Like the other thing that Kanda did because the revenues down is they pushed all a lot of features into the higher paid editions, okay? It's not the end of the world. Loom is not the breakout success of Atlassian, right? It is not. But getting rid of collaborative free seats, which is how we all grew up using Zoom, right? We could share and work on these together. That's a sign of just how hard, even if you beat the quarter guys like Shopify or Atlassian, man, they're leaving nothing on the table. These are not easy beats. This is not Anton a lovable turning around and he added 100 million last week without realizing why. Even the beats are hard. And so the loom one, it sounds minor, but whenever I see the base getting overly monetized or harvest, if nothing else, it's a sign of stress in the organization. 'Cause no one really, no founder wants to do that. You've said that, you can say, I have totally come to conclusion, you're right. And you know, we talk to people one level in at some of these big software companies, and they're doing a 708% quarter. And then you talk to a director of sales that you know, you suddenly discover it's we're jamming them on price, we're jamming them on overages, and you realize it's just not sustainable. So I do hear you on that one. I mean, overall I thought it was a great quarter, but yeah, sorry to lose you, it really looms it. - I'd still just worry if the agents need all these products, but I hope so. Just like, I don't want to be negative on last year, I'm a super fan of Mike, we all are, I wanted to win. But I also worry a little bit, it's a canvas story coming that it seems to be defined some trends. Now you can say it last in very enterprise, right? Let's not look at the developer side of things, let's not look at how we used to use Jira and other tools, but our agents really don't need these seats. And a lot of their revenue is still developer focused, which where I think the seed is under assault, a permanent assault, the seed is. - I've got a provocative question for you. HubSpotStay is sitting at $10 billion. How long will it be until HubSpotters bought by Banding Spoons? - I'm not going to dunk on HubSpot. - You see investment in HubSpot, we did it at $47 million pre. So we're still up at Series C at $47 million pre. - It was 70, I'm wrong, it was 70, I was taking a box, box was, but yeah. - It's probably hard to get done too. - Yeah, I would hard to get done. I mean, I'm sure Brian, if he could have got one of the glamour people who turned him down and then did him later, he'd have taken them off of us. - Well, I wouldn't go that far. - I would. - You're a podcast deraure, you stand up for yourself. - I'll tell you why I don't think they're going to get Banding Spooned [BLANK_AUDIO] what it's like, I don't know, right? I think there's so many things in the air table story that are scarier than they sounded, but I think one of them is that they only got one offer. And bending spoons is gonna look at everything and it's gotta be perfect. And maybe they will buy them. First of all, that would be a lot for bending spoons to buy it off, but they could do it, right? I guess you can always line up the financing. Like hub spot, assuming they would sell, let's just assume they would even sell, right? And there's a lot of fiduciary questions here. There should be offers at 12 if it's at 10 today. There should be, but I don't believe there are. I don't believe there's many. I will tell you at a meta level, if we wanna break on it, there is an issue here, and it's a structural issue in the world today, in the AI world. Just like if you're Canva, the pro-sumer folks are threatened by chat, if it can be done in chat, you can even accidentally, you're hyper threatened. The SMBs, the hub spots and Mondays and others, they're not really threatened by doing it yourself. Okay, that is a short nif. What they are threatened by is the fact that low end competitors in SMB are really good. The low end CRM competitors are exploding. The revenue growth from Monaco, Lightfield, or a cell, and others, they are like nothing we've seen before. You know, my first venture investment was pipe drive. When it had taken 40 years to get competitive with Salesforce, right? It was just slow. And that was a number one, like simple to use CRM, exited for a billion in something my first investment. The problem across my portfolio is, used to walk into a board meeting and the competition would be the guys bigger than you, right? Here's what the big guys are doing. Now, if you walk into a board meeting and it's SMB, they're all guys that were on the slide 24 months ago and they're really good and their agents are good and their LMs are good. And so the tough hand hub spot has, is it spent the last five years beating Salesforce at the low end, right? It's a CRM company now. It's not a marketing automation company. Now the low end is so good. And the amount of founders that want to compete even in niche categories, they didn't used to want to. And so this is the bear case on everyone at this SMB space, as it's just too many good competitors. - I actually think you're exactly right. Genie, I'm exactly right on that. It's very well articulated. I remember that the years of we're doing CRM we're competing on Salesforce 'cause you can build really excellent software really quickly with a different twist using AI. It's why I tell, I was telling this to someone who runs a big PE shop in tech. If I own one of these companies as a PE owner, if I was, I would just be at every wide combo in a demo day. I would be like, you need to infuse some of that DNA quickly while you still have breadth and figure out what you can build. You fucking kidding me? It's the loyalty that they have today. You think they're gonna stick? - Let's get a load of young people from YC, a big chunk of money and say, hey, come walk to this shit heap. They're gonna be like, yeah, chime. - I'm gonna see if you think it's a shit heap. No, but all the PE companies respect for their shit heaps. - You know why actually this strategy won't work? You wanna know the serious reason why it won't work? - Rory's right, Harry, you know why it won't work? Because all the hot startups have this model. They're all picking off everybody. I mean, I think one of my investments owner, I think they've acquired like 20 companies. And they get to go work for a reasonably hot company, right? And so how you gonna compete with that when Ripley is hoovered up 30 and owners who overed up 20 and revolutes who overed up 10, you just, that strategy worked three years ago. Like it's too late. Everyone is just sitting there hitting refresh, hoping these smart YC companies fail so they can hoover them up in an acquire. I'm not kidding. It is a core strategy of many of many leaders. - Boys, thank you so much. That was awesome. I love that. But before we leave you today, what's one thing in business that's spreading as fast as AI? AI risk. Every new tool your team signs up for. Every vendor that turns on AI features every new integration. Each one, I'm sorry to say, is an opportunity for something to go wrong. And most security programs weren't built for AI's pace of growth. Vanta is the number one agiantic trust platform used by over 16,000 fast moving companies, like RAMP, cursor, Harvey and more, to ensure they're always audit ready. Watch for the risks that show up between all this. Across your vendors, your AI tools and your whole environment. How? Well, the Vanta agent works like a 24/7 GRC engineer in the background, finding issues, drafting fixes and cutting vendor agreements time by up to 50%. Whether you're a fast growing startup or a global enterprise, Vanta's here to help you automate your security and your compliance and earn and prove trust. My listeners get a special offer Oh yes, a special offer, $1,000 off Vanta.com/20VC. That's v-a-n-t-a.com/20VC for $1,000 off. Deal handles the hard parts of global hiring so you can stay focused on growth. Set up payroll for any country in minutes, hire anyone anywhere and get visas handled fast. Deal takes care of onboarding HR, IT, EOR, benefits and compliance. It's more than 40,000 fast growing companies like AirWallix, 11 Labs and Intercom, trust deal to move fast and get back to building. Visit deal.com/20VC. That's deal.deel.com/20VC. While deal builds the team, Framer builds the site. If your team wants a website that looks and feels hand-crafted, but is still fast to ship, Framer is built for exactly that. Here's what I love. Framer is the pro AI website builder for creators, teams and businesses that care enough to get every detail right. The agents close the gap between AI generated ideas and production-ready website work because it all happens where the site actually lives. It lands on the canvas, stays editable and can be published when the team is ready. So you can build custom code components, create and manage CMS content, optimize SEO settings and ship everything all in one place. The agents bring speed and scale, you bring taste, judgment and control. Premium hosting, enterprise-grade security, 99.99% uptime SLAs, which is why the world's leading brands like Poplexity and Miro build in Framer. Learn how you can get more out of your site from a Framer specialist. We'll get started by building for free today at framer.com/20vc for 30% off a Framer Pro annual plan. That's framer.com/20vc for 30% off. Framer.com/20vc, rules and restrictions may apply.