The Exchanges

Q Oh, interesting. And I'm out of curiosity, was, um, was the decision to publish it on, or talk about it on Reddit, just because that's, um, a platform you find yourself using, or was there anything in particular about, about hitting that user base that made you do go there?

A That's a, that's a good question. I, I wouldn't say that I'm generally, I don't consider myself to be a Reddit user, but, uh, there was so little support available at the time, uh, after the prescription, and I think that's still, uh, often true. Um, this is a very new way of managing your health. Uh, it's very different from kind of a traditional diet and, and, and really different from, I think, uh, every other experience I've had with a prescription medication, and so I, I I realized that there were a lot of things that I needed to learn. I needed to, um, I needed to understand, uh, how this medication was affecting my, you know, my brain, my body, like, uh, and because I'd gotten it through a telehealth provider, like I think many people do, I didn't really have ongoing support and advice. I didn't really have access to resources. It was also new, and so I think, like a lot of people, I ended up Uh, gravitating towards Reddit because there was a large active community of fellow GLP One users who were sharing experiences, sharing advice, and it ended up being a very helpful resource just for that sort of crowdsourced wisdom. Obviously not a substitute for actual medical advice, but it was a very helpful resource sort of in between those appointments.

AI assessment note: “gravitating towards Reddit because there was a large active community of fellow GLP One users”

Q Um, what do you ask them to do or how complex is it? And then three, what's their incentive? We can unpack those. I'd love to start with just, you know, distribution and marketing. How, how have I, I presume this is on the Apple app store, uh, Uh, but how, what steps have you taken to get the word out and make sure that, uh, people know it exists?

A Yeah, so we are on both the iOS App Store and on the Google Play Store, so iOS and Android. Uh, and, you know, I think we, we had the incredible advantage of being the first app in the space by a long shot, so, um, you know, and yeah, yeah, and also this is not my first app, and so I had a, um, I had some existing, uh, experience with App Store marketing and, uh, positioning. So, We were able to leverage that pretty early on and make sure that we were, um, you know, making the best use of our early lead. And so, uh, we continue to benefit from being, uh, the number one ranked, uh, GLP one companion app. And, uh, you know, at the top of all of the rankings for the organic search terms, um, that's, that is where the bulk of our new users come from. Um, we've had, uh, we've had over a million downloads. And, uh, we have, uh, at this point, I think a 100,000 active paid subscribers. Um, and yeah, most of those have come either through the organic search results or through word of mouth, because it really has spread very much through, um, just user referrals and recommendations. I think from the beginning on Reddit, I think it continues to be, um, you know, often recommended on Reddit. People like to share screenshots of the charts that they can generate in Shotzi and, uh, you Yeah, I think it's just a very helpful way to, uh, to share the experience that they're having with these m…

AI assessment note: “most of those have come either through the organic search results or through word of mouth”

Q the company. You know, I know there's a lot of debate as to what may be the source of changes in climate and whether or not they're more or less severe, but I admit, I feel like I've been reading more about wildfires, uh, than I have in the past. Um, and so, you know, what are the numbers say and how has that influenced you and building this company?

A You know, we came at it from a landscape ecology lens initially. Uh, so, you know, understanding how the built environment interface with natural processes sort of core to the foundational elements of frontline. Uh, wildfire is a part of every plant community across the US. Uh, 80% of fires in the US are burning in grasslands and shrublands. About 20% Uh, are burning in forests. Um, so, uh, you know, the fire return intervals differ based on if you're in a grassland, it could be, you know, three years. If you're in a forest, it could be 80 to 220 years. Um, but nonetheless, the need for fire, uh, as an underlying component to restoring those plant communities remains the same, right, across, uh, all plant communities in, in the United States. It's the best way to regenerate the seedbed. Uh, it reduces competition, and it also eliminates invasives. Uh, think of it as a way of just, um, you know, kind of restarting a blank canvas, uh, and from that blank canvas, uh, you have growth, and then when that growth matures, uh, it starts again. Um, so, you know, as a need, all plant communities need fire, uh, with the increase in climate and, and, and really temperatures globally, um, the onset of fire has increased. Uh, so you have, Uh, longer duration fire seasons, uh, fire season starts earlier in the year and it lasts longer. Uh, you know, a lot of the fires that we've seen in the l…

AI assessment note: “80% of fires in the US are burning in grasslands and shrublands.”

Q Um, I'm curious, um, how much time have you spent looking at gels, uh, to complement water or in lieu of water?

A Yeah, a lot, actually, and we use a foam. We use a Class A biodegradable foam. Uh, in the system. There's about 20 different foams that, um, have been approved, uh, by, uh, the US Forest Service. Um, and any one of those can be integrated, uh, into our, into our system. Um, and it's the same stuff that, that firefighters carry on their trucks. Uh, you just don't need a firefighter to be there. So it's a class A foam. And what it does is it makes water wetter. So you're able to do more with less water. Uh, it, uh, more quickly hydrates the recipient fuels on and around the structure, whether it be patio furniture or a dormer, you know, on your home or the leaves in the gutter. Um, and so you're able to more quickly hydrate those, uh, in advance of, of the amber exposure.

AI assessment note: “Yeah, a lot, actually, and we use a foam.”

Q oh my gosh, there's, there's a bunch here. So let's, let's, let's go back to Tickle. So what, what, uh, prompted the move from, uh, Massachusetts to SF?

A Yeah, so, you know, we, we knew that Silicon Valley is really the center of technology for the world. Uh, you've got, you know, the, the convergence of the entrepreneurs and the investors all in one place. And coming from Boston, like I said, I'm a, you know, I'm a Boston guy. People were really guarded with, you know, with their information and what they're doing and want you to sign an NDA. And then we get to Silicon Valley and we realize ideas are easy. Execution is hard, right? So people are open to, hey, I'm working on this. What are you working on? And people are, they may be competitive, but they're also collaborative. It was a totally different environment. And on Sand Hill Road, that's where most of the VCs have offices. And that's where a lot of the Investment for these tech companies come from. So we knew that if we really wanted to be in the heart of technology, we need to be in Silicon Valley. I think if you're an actor, you should probably go to LA. And if you're in finance, you should probably be in New York. So we realized we need to be there. And, um, when we finally, after many, many months of trying to raise money, when we finally raised money from August capital, that's when we made the move. And my business partner, James, named his kid West, because he was like, we're going West, and I am committed, and I thought we'd be out here for a few years, build up …

AI assessment note: “when we finally raised money from August capital, that's when we made the move.”

Q Got it. Okay, so now let's fast forward to Rails. What year did you start the company?

A So we started, we started Rails about, uh, three years ago. So, uh, 20, 23. And, um, Rails is a, what we call a hybrid perps exchange. So perps perpetuals. And the hybrid part is, you know, FTX that everybody remembers, um, back in the day, um, Was the best crypto trading platform in terms of, um, the execute, the speed of execution and the breadth of assets. And it was all great until they did the wrong thing with Alameda research there, you know, their, their, um, sister company and using user funds to be able to, to do what's called market making. Now, if they had never done that FTX would still be around and they'd probably be the biggest exchange in the world. Uh, so what we saw when FTX went down was the hybrid approach was how do you bring centralized order processing? So the very fast execution of trades, how do you do that in a safe way? So what we've done is that we've brought our custody on chain. So what happens is users deposit funds with us. We put that in a smart contract, which lives on the blockchain. And at Rails, we never actually touch their funds. Their funds stay locked in a smart contract, and then you're basically taking a virtual equivalent of those funds and trading in our system. And then when you want to liquidate, when you want to exit, we would then take the difference of any profit or loss you've had and unlock those from the smart contract, right…

AI assessment note: “we started Rails about, uh, three years ago. So, uh, 20, 23.”

Q Um, super exciting. And, um, can you dial us in to Tickle? What, what, uh, what problem was it solving in the market?

A So Tickle became the largest online personality testing site in the world. And the original spark was at Harvard Business School. You've got a bunch of highly competitive, you know, type A people. Um, we took the Myers-Briggs test there. Uh, this is back in Um, and it was paper and pencil, and you take it, and you send it in, and then months later, you get your results, and you kind of forgot about it, but then we saw everyone started to open up and talk about, oh, I'm an ENTJ, you're an INTF. Now I, I understand how, you know, how, how, You know, how we get along or don't get along. So we saw that and said, wow, the internet, this, this new thing, you know, in 1998, this internet could do all of this immediately and make it more fun and shareable and viral. So that was the original spark. So we started doing personality tests online and, um, And the first ones we did were really serious, like Myers-Briggs and anxiety and depression. And it turns out those are not very viral and not very shareable. So we, we pivoted and we said, okay, we have these PhDs on staff. What, what can we do about, you know, making your personality something that's fun and shareable? So we said, okay, people like their pets. We said, what about what breed of dog are you? So we are going to have our PhDs that are like, do you really want me to write a test That is basically assessing someone's personali…

AI assessment note: “this internet could do all of this immediately and make it more fun and shareable”

Q Wow. And, um, okay, so you said you ended up giving equity to the staff who you kept on. Was that a consensus decision, or was there any one person in particular who's, you know, insisted that that was the best approach?

A So my, my partner, uh, Uh, Jeff Bonfort and I, uh, and our other partner, Gary Shue, we really, we're Silicon Valley guys, and that is the lifeblood of Silicon Valley is stock, right? I mean, people, you know, these, they start these companies, these entrepreneurs start companies with a huge amount of risk on the table, and you, you need to have commensurate upside for that risk. The reward has to be there, and for most people, it's not in cash, it's about the upside in stock, and if I, at the I want a stock. So Jeff and I were insistent with the other PE firm that everyone is going to have stock that will, you know, it will reflect their level in the, in the company, of course, but we wanted everyone to have stock. And I remember, um, when we took the company public, we're, we're standing on the New York stock exchange floor and our head of marketing came up to me. He was, he was one of my direct reports. And he said, Every single thing you said on day one, everyone's going to have stock. We're going to be transparent. We're going to work hard together. We're going to do this and we're going to take this company public. He said, every single thing as of today, you guys did. And it felt so good for me because I know on day one, they were all like, this is too good to be true. He said that to me later. He said everything, it was a one 80 from where we were. They were like batter…

AI assessment note: “Jeff and I were insistent with the other PE firm that everyone is going to have stock”

Q So fast forward to today, it's February, 26. You know, I'll oversimplify trading, and let's say some of it's speculative, some of it's hedging, uh, some of it's long-term investment. What do you, what do you, you have a sense of the people who are active and leveraging rails? What's their predominant focus?

A Yeah, so because Rails is perpetuals, and you can think of as perpetuals as you are going either long or short. You are just taking a bet directionally. So a lot of those folks are going to be more speculative, right? So it's not typically just a buy and hold. So most people, if you're just going to buy and hold, you might be trading on Coinbase. You might just say, I want to buy 10,000 dollars of Bitcoin and forget about it and let it go. Rails, because it's perps or perpetuals, Um, it is more speculative. You know, I believe that Bitcoin or whatever asset is going to go up or down in, in, in a shorter period typically, uh, than someone who's just a long-term holder. So, uh, we have a lot of those types of traders, and also because we are, uh, compliant and regulated, you know, we can have institutional investors as well who, um, tend to get, you know, spooked with DEXs, decentralized exchanges, which are not regulated.

AI assessment note: “a lot of those folks are going to be more speculative, right?”

Q Okay, I, I mean, I have a bunch of questions, but before I start unpacking stuff, Exeno, can you give us a little bit of insight into the value prop?

A Yeah, it's amazing. Exeno is a company that's founded by Eric Siegel, who's a former creative partner of mine back in my advertising days, and Brett Banker, both of whom are probably genius, earnest, but entrepreneurial in their own bent, and they Came out of the advertising business as I had with an understanding of, um, how screwed it is, sort of. How slow, how bureaucratic, and how increasingly, um, locked away the best talent is, uh, for certain assignments. So they kind of grew up in that space and, um, had the bravery and the vision to say, There's got to be a different way to do this, and so what they created is essentially, um, a, a marketplace of top talent that they can deploy in a very accelerated fashion for clients on a project basis to really bring, um, solutions that are, that are powerful, but done in a fraction of the time At a fraction of the cost it would take to access that in the agency world. Um, and so when they originally reached out to me, it was ironically as an expert in their network, you know, could, could I help them bring strategy vision to life? Um, I saw them and I said, hmm, I have a lot of early stage founders who could use not just a strategic product that I give them, But a creative product done in at the speed of venture at the speed of early stage. And so I, um, joined them. Uh, I was absolutely magnetized and enamored by their offering, r…

AI assessment note: “a marketplace of top talent that they can deploy in a very accelerated fashion”

Q and rational solution, but, you know, in the absence of just appreciating the actual mechanics of how that worked, um, yeah, no bueno. Um, you know, so definitely, I would imagine that's one of the, the items on that list, uh, that you held up to the screen a moment ago. I'd love to know, you know, what are the other policy items that are, that are near the top?

A Sure. Um, so in the previous administration, when President Biden was in charge, there was a I'm sure folks know the Securities and Exchange Commission was led by Gary Gensler, and the SEC had a ton of rulemakings. The most egregious, we actually went to court and sued in federal court and won, and we completely knocked out this idea that they had passed, which was to essentially micromanage the relationship between general partner venture capitalists and their limited partner funders, and it was, it was a dumb idea. And it impacted every private fund, and so we band together, like we do a lot of things in Washington with coalitions, and so the hedge funds and private equity and us and others got together and went to federal court and sued and won, but that was one rule, and there were probably forty-something rules that he sort of passed when he was in charge, and so a lot of those were trying to clean up. We're trying to get in a better place. We now have a chairman of the SEC and Paul Atkins who Is very friendly to private capital, to private enterprise, to, you know, wanting to see innovation happen and everything else, and, and so the conditions are right to see if you can't get some of that in a better place, and so we're certainly working on, on that. Um, a great example for venture capital firms is that Most venture capital firms enjoy the so-called venture capital exem…

AI assessment note: “a great example for venture capital firms is that Most venture capital firms enjoy”

Q Wow. And then do you, is there a focus on any specific engineering domains, or does it vary cohort to cohort?

A Activate's mission is squarely around, uh, sustainability. So when we're looking at different types of ideas, that's our first filter. Now, within that, we have many different sort of category, categories. Chemistry and materials, um, industrial manufacturing, energy, you know, water. We do take some fellows every year in life sciences, agriculture. And so when you look at these thematic areas, they do sum up to one thing, which is these are the industries that they are mainstream industries, but these are the industries where we believe change needs to occur for Both people and planet and the future of what we're building. So that's kind of exciting. I, I should probably state explicitly. We don't do software. We don't do AI. Like we're in the business of the physical world. So steel in the ground, that's who we are. And that's called deep tech and it's hard tech in, in other corners because it is very hard, you know, getting the, the capital in the system that could support these types of ventures. It's a longer duration, and it's a slightly different return model than if you were investing in the next great LLM. So it's historically been under supported, and we are just one of many that are committed to these types of technologies that can really help shape the world in the future.

AI assessment note: “Chemistry and materials, um, industrial manufacturing, energy, you know, water.”

Q a lot of VCs get asked, you know, specifically by the, their LP base is how do you differentiate yourself? And so if we can, if we can tie that together, I would love to get your perspective of how, uh, Volition seeks to separate itself from, I don't know whose count to follow. I've, I've heard a thousand or 2000 VCs in the US, but, uh, there's a bunch.

A Yeah, no, absolutely. So there are two ways that we really differentiate from the broader growth equity realm. So, you know, there's VC earlier stage, there's private equity doing majority. We're doing minority investment and growth equity. Within growth equity, we tend to be contrarian investors. So whatever the market is saying they hate tends to be where I spend my time thinking about, oh, maybe there could be something there. Uh, for example, if you were to go back two or three years, there are a lot of growth equity firms that would blanket statements, say, we don't touch anything with hardware. We don't touch it because there's capex and requirements. It's messier. You got to deal with all these, you know, inter international manufacturers and such. So we actually doubled down on it. Uh, we made four investments in hardware enabled software over the last five years. That would be an example of, of kind of taking more of a contrarian bet. The other way that we differentiate is that we are very concentrated in our portfolio. So what that means is we're not playing the power law game where we have, you know, 40 companies in a portfolio, and so if half of them don't succeed, it doesn't really matter because the other half will, you know, provide exceptional outcomes and make up for that. We are investing in 15, maybe 20 portfolio companies. So, more diversified than a founder…

AI assessment note: “there are two ways that we really differentiate from the broader growth equity realm”

Q And so, um, for the, for the current college students or recent grads in the audience, um, what advice would you give them based on, on your experience that time?

A Yeah. The best advice I was ever given that I'll pass on is when you're applying to a role, you want to be focused on sharing what you could do for that firm. So giving ideas, coming up with Ideas on how you could be impactful, and focusing on that, rather than focusing on a specific internship that may exist, because I can tell you none of my internships were programs. They were two early stage companies, but I had worked at, you know, a marketing agency one summer, and I said, hey, I could help you with SEO, I could write blog posts, I could help with Google Analytics, and you know, then I started that internship. I learned A whole bunch of new skills that I could then bring into the following internship, um, and I think it's really about do anything you can to build something you're good at. Right now, AI. You should, you should be taken advantage. These technology shifts, they favor the young, right? And you're probably taking classes at this point about a topic that a whole bunch of people are just scrambling to figure out, and so if I were a college Student right now, I'd be reaching out to whatever I wanted to work for and saying, hey, I'm really good at Claude agents. Here are some of the projects I've built. You can send them the projects that might be hosted or apps, uh, and say, I could do this for you and, and show them you can provide them value in addition to just…

AI assessment note: “when you're applying to a role, you want to be focused on sharing what you could do”

Q I love it. Um, looking ahead, what, uh, what do you see on the horizon for the asset class?

A Yeah, it's an interesting time. Um, I think growth equity is actually in a good place as an asset class because In venture over the last few years, just as there is every time there's a big tech refresh, there will be a lot of companies that fall to the wayside. I think the loss rates in companies that are early stage will be higher than they have been over the last 10 years, just like they were after the dot-com boom. Uh, and then if I think about private equity, there tends to be a lot of debt use. And I think that given the anxiety in the market, it will be harder to Get debt facilities if you have balloon payments coming up to replace, and that will actually increase the loss rate for the private equity firms. Uh, and so growth equity is somewhere in between where there's not a lot of debt. The companies are, are big enough that they had to be some product market fit, and they have enough resources to maybe make the pivot if they are not AI native to start. If you think about A company with twenty million of revenue coming in the door, that's twenty million of cash you could use to, to fund a whole lot of innovation that, you know, if you were zero in revenue and pivoting would be a lot harder to do, and so I think growth equity is in kind of a unique place, and I wish I could say I could have predicted that when I chose growth equity, but that's, that's not usually how lif…

AI assessment note: “I think growth equity is actually in a good place as an asset class”

Q the investor, you know, to be able to say, hey, this is a typewriter. Uh, this is, uh, this is the next, uh, next big thing. I'll be curious. So, um, you know, I heard references to mentors, uh, along the ways. And so early on, did you actively seek them out? Did it just happen? Um, how did you find people to give you, share their wisdom with you?

A Yeah. I would say I've had many mentors. I think that when I was younger, I always thought, oh, I need to find one mentor to, you know, guide me through everything. I think it's about trying to build real relationships with the people you work with and be open to learning, and you may have different mentors at different junctures of life. Um, I had a great mentor in undergrad at the Startups that I mentioned, Brian Rogers. Uh, I had a great mentor when I was in investment banking, Rahul Swani, who kind of challenged me to get the quantitative skills that I think I did ultimately need for what I do now. Um, I had a great mentors at, at Summit who taught me the asset class, Tom Jennings, Steve Toomey, Caitlin Vorlachek, who brought me in originally to the asset class. Um, and then I have great mentors here at Volition. Now, and I think, um, I try to keep in touch with all of my mentors, and sometimes that's easier said than done, but I don't think the theory of needing to find one mentor in order to make it is true. I think you can have many, and, uh, that can be just as valuable.

AI assessment note: “it's about trying to build real relationships with the people you work with”

Q So, um, during, so during the, the time at Google, what, what were some of the key lessons that you took away that informed how, uh, you're building optic today?

A Yeah. Um, I would say number one, and they're slightly opposite to each other. Number one, focus matters. Even in a company like Google, where you have seemingly endless resources, attention is not endless. And being unfocused and trying to work on all the things at once makes even big and powerful and very smart companies like Google fail at things. We all know stories of many failures and many projects that got shut down at Google. I worked on some of them. I was in charge of launching Stadia platform, the gaming platform that failed at Google. And, you know, I won't get into the deals here, but I would say that Other companies that had more focus on gaming actually could turn it into a quite, uh, meaningful business. And, you know, Xbox live streaming is alive and well and working really well. Google didn't have enough attention to focus on this project. It didn't have enough resources to dedicate to it. And as a result, it failed despite, you know, all the resources. So that was an important lesson to me. When you're a startup, it's, it's, it's orders of magnitude more important. To have very clear thesis and focus on a very little number of, little number of things that you can do really, really well. And the second lesson is probably the opposite to what I just said, and that is scale matters. And especially when it comes to machine learning and AI. Uh, the more the, what…

AI assessment note: “Number one, focus matters... And the second lesson is... scale matters.”

Q So how do you, how do you think about today, uh, distribution for optic and, and increasing the, you know, the, the top of the funnel and getting, getting the word out, uh, you know, any, any biopharma junior analysts out there who are going to benefit using the platform?

A Yes. Um, generally biopharma market is a enterprise, uh, market with a pretty small number of companies comparing to other markets. Um, so when it comes to software distribution, it is a limited space, uh, which is normally dominated by, you know, direct sales and connections, um, that people build over many years, uh, account-based marketing. Uh, and, uh, that, that is the, uh, the playbook. Now we come from slightly different angle as a, uh, originally tech company that focuses on life sciences rather than life sciences company that expands into building some software. Um, and so in many cases we lack, uh, connections or history in the market that would enable us to immediately, um, Um, reach, um, all of the potential customers out there. Then that's a realistic situation. Now, the way we counteracted as a startup is number one through, um, through broadcasting our discoveries via papers, uh, in scientific journals, but also we just publish a lot of works on AI. Like, for example, the best paper out there on competitive intelligence and due diligence, uh, for, um, life sciences assets, so for drugs, uh, using AI is by our company. Uh, in fact, I think if you search on Google right now, do drug due diligence AI or something along the lines, the first organic result will be a paper, uh, published by my co-founder as a lead Uh, author, but also myself as a co-author there. Uh, t…

AI assessment note: “the way we counteracted as a startup is number one through, um, through broadcasting our discoveries via papers”

Q So that makes good sense. So do you find that you have more success with, um, B to C, uh, just retail or consumer based businesses, or is this, are you finding success also with B to B as well?

A Uh, B to B as well. Uh, but, uh, wherever you have a lot of communications between you and your customers, um, then immediately you are, you naturally are losing some part of them. Um, and regardless of is it a B to C or B to B, if you are having a 10 calls per day or a hundred calls per day, or potentially a thousand calls per day, which is rarely, mostly it's from 10 to a hundred calls per day, um, calls or, or web chat or Instagram inquiries, so all kinds of channels, uh, you're losing 20, 40% of them. Why? Because 10% you're naturally losing from non-working hours. Most likely your call center, your, uh, your reception is not working during weekends and after whatever, nine PM or seven PM. So, 10% from seven to 14, actually, percent of all your new, new customers are coming from that non-working hours. So, that you immediately cover with AI front desk solutions.

AI assessment note: “Uh, B to B as well. Uh, but, uh, wherever you have a lot”

Q I think you maybe know my next question is going to be is, and you may have answered it earlier, but how does training work?

A Uh, it's, uh, we, we currently have a platform on top of our platform, which, uh, reads your business website, uh, and will understand and train itself. So yes, you just, it's simple. You just go to newo.ai slash creator. You will see, uh, for the field, you paste your URL, press train, And our platform takes about three minutes. It goes and reads all your pages, your products, services, prices, your working hours, story about your company, locations, if you are a multi-location organizations, and it will produce provision a phone number for you, which we call AI phone number. And that's it. Now you have a phone number. You can call this number. You can talk to your AI sales, AI receptionist, and as soon as you're ready and you're satisfied, you just redirect all inbound calls from your existing public phone number to this number after second, after the second ring. So you give your human coworkers chance to pick up the phone. We call it human first and second. So humans will be able to, you know, they have chance this for whatever, eight seconds, 10 seconds, two rings to pick up the phone. If they fail to pick up the phone because they're absent, they're, they're, they're talking to other customers, it's non-working hours, time, the phone will immediately be redirected to the AI receptionist. The AI receptionist will answer all questions, look at the open slots, Your customer …

AI assessment note: “reads your business website, uh, and will understand and train itself”

Q So, uh, separate but related subjects, what's your outlook then for the impact of humans as it relates to work?

A Yes, so I don't have a crystal ball for, you know, five years from now, but I have a view of the next few years and then maybe 20 years from now, right? It's that middle that's, that's often a bit hard. So in the short term, what we're seeing is there are a lot of areas where there is, um, a shortage, especially of highly skilled labor. It's not just, um, unskilled labor. And there are organizations that are actively looking to hire and can't find people. Um, and this creates what we call sort of a capacity crunch. And a lot of our portfolio companies are building systems into that. So they're unlocking latent demand. They're not taking jobs away from anyone, because again, these are like racks that haven't been and can't be filled. And what that does is it actually empowers people. So, for instance, we have a company that's building an AI data scientist. They're not building automation tools for data scientists. I'm not trying to make the life of data scientists easier. There's people doing that. They're building a data scientist. And so there's only three million data scientists in the world, but the global demand for data science capabilities, if they were readily accessible is probably a couple hundred million, right? So now the marketing manager in the Philippines or the, uh, the construction CEO in Nigeria or even in San Francisco, right? Who can't hire a data scientist f…

AI assessment note: “unlocking latent demand. They're not taking jobs away from anyone”

Q make everything that we want. I'm not saying he's right. I'm not saying I, I, I agree with him. But there is an interesting implication, and that is, you know, are you anticipate, if you, if we follow the crystal ball thread, are you anticipating a significant disruption to the existing SaaS, um, ecosystem if, if AI's ability to write code continues to improve at the pace that it's at?

A Yeah, I want to separate two things there. So there's, What Elon is saying, which actually probably has some truth in it, but I think is sort of a longer term, more extreme view, with your immediate question of what does it do to sort of sass? So, absolutely, um, I think, uh, the era of horizontal, shallow software that's sold in some kind of monthly subscription Um, is, is reaching its end. Um, I've been saying this for the last, you know, 18 to 24 months, and while I haven't shorted, uh, you know, a lot of SaaS companies, um, I do think that this idea of actually going deeper and doing real work for people, uh, in a very customizable way, um, is the future. We at Axiom are only just a few people. We have the luxury in twenty-twenty-six now of building a firm with all of these new technologies available to us. So what would a VC firm, what should a VC firm look like? Um, so we're building agents internally, um, usually, and we only have like half a developer, um, that Basically help us scale. So we're building an internal AI lawyer, um, a couple of AI associates, um, some other sort of, uh, AI accounting functionality. Um, and these are agents that are autonomously getting work done to make me look a lot more like a coastal ventures or a social capital where I worked before that scale, um, without having to hire that many people. So that's already happening today. Um, And, you…

AI assessment note: “So, absolutely, um, I think, uh, the era of horizontal, shallow software”

Q don't, I suspect they don't appreciate the nuance that you're aware of and how to separate the signal from the noise, but if you can maybe just start with big picture, what things have looked like up until today, and then I'd love to hear your thoughts as, okay, you know, how is indexing, uh, or how is AI impacting indexing for purposes of enabling sellers to find their buyers?

A Yeah, we started out, um, as one of the pioneers in SEO, search engine optimization, before that was even a discipline. So we wanted the first companies to have a Google page one ranking on a really valuable keyword. Um, and ever since then, we've continually upgraded our approach as SEO has changed and evolved. And today you're right. This whole idea of organic search or being found by search engines is changing radically. Some people are now calling it GEO. We call it AI SEO. And the basic principle is we're moving from a internet where people Google things. Right, where we would type something into Google, we would go click the links below, we'd go to a website, we'd read the information, we'd click back, and we'd do that again to an internet where we just asked the AI. And that comes in two flavors. One is the Google AI overview that now shows up at the top of most Google searches. You've seen that. And then the second is standalone AI tools like ChatGPT, Perplexity, Claude, and so on. So the new game, instead of getting listed in those links down below, is to get listed as a featured source for the AI overview. So when you Google something, uh, and you get that AI overview, you'll see a list of links or sources over to the right of the results. That's where we want to be listed. So that's what we help our clients do is create content that's more likely to show up in that G…

AI assessment note: “we're moving from a internet where people Google things... to an internet where we just asked the AI”

Q Uh, a hundred percent. It makes great sense. In fact, we were literally just having this conversation this morning on the role of client engagement and how do you optimize that experience? Um, let's come back, uh, to AI and marketing. Love to talk crypto. Uh, so you're an author as well. You got six, your sixth book coming out. Wow. Uh, the intelligent crypto investor. What's it all about?

A I'm really excited about this book, Christian, because this is the first book to make crypto investing easy to understand and accessible for anyone. So it's really fun to read. It's got a storytelling approach where we basically, uh, start each chapter with the story of a great investor, uh, anyone from Warren Buffett to, uh, Jack Bogle to Peter Lynch. And we unpack what made them successful. What was their philosophy or their approach that allowed them to accumulate these, um, huge fortunes? And then we show how those principles can be applied to crypto investing. We have a step-by-step investing approach that anybody can follow, regardless of how much money you have to invest or your level of tech savvy, and we show how to do that and also how that approach has made money for the investors who have been following this, uh, over the last seven or eight years.

AI assessment note: “start each chapter with the story of a great investor, uh, anyone from Warren Buffett”

Q Um, You know, because everybody's risk return profile is different. Um, so I'm, I'm curious, um, you know, what, what gravitated you towards, uh, the asset class?

A I, uh, learned about Bitcoin back in 2013. Uh, I have a, a, a, a geek friend who told me about it, and I researched it and said, this is really interesting. And, uh, my wife and I talked about it. I said, let's go, let's go buy some of this stuff. It wasn't easy back in those days, Christian. Uh, It, there was no Coinbase. We basically had to send a wire transfer to a seller in Belarus. I didn't even know where Belarus was on a map. Um, and I imagine us sending this money sight unseen, a large chunk of money. To buy a bunch of Bitcoin. And as you know, like it takes three days for wire transfers to clear. So we were just sitting there praying that it went through, but it did. And we received the Bitcoin. The price of Bitcoin at that time was 125 dollars. 125 dollars. So we held on to this, uh, for several years and I kind of forgot about it. Every once in a while I check in. And then in 2017, the price skyrocketed, and it was kind of the first big Bitcoin boom. The price hit 10,000 dollars. And I said to my wife, this is the greatest investment we've ever made. Let's go all in. So, as I mentioned, we have this marketing company, MediaShower, and I said, let's refocus this business exclusively on Bitcoin and crypto companies. And at the time, this seemed like a great idea, because there were companies starting by the hundreds, and they all needed marketing, and we understood thi…

AI assessment note: “I have a, a, a, a geek friend who told me about it”

Q I'm curious. Did you, was it, did you always seek out mentors in your career?

A No, no, I was, I, you know, I, I grew up in a, in a pretty rough neighborhood in New York city. Uh, and, uh, Prior to meeting Paul, I was a pretty troubled kid. A friend of mine dragged me to a conference in Oklahoma City, a leadership conference, and I was like, you know, 18, everybody there was, most of the people there were like in their fifties, sixties, seventies, and there was a party, and I sat outside of the party and got a chance to meet this guy, Paul, 85, um, you know, not really like a big Personality, but, you know, mostly ask me questions about, like, who I am, and, you know, what, what I want to do, existential life questions, and I got a chance to learn from, you know, somebody that just from a happenstance of an interaction, and that became the guy that I followed, and, and tried to learn from, and tried to emulate in the early days, so yeah, I wasn't a, a mentor seeker until after that moment.

AI assessment note: “I wasn't a, a mentor seeker until after that moment.”

Q Is that the same with the Turing test?

A That's it. The Turing test would be an example of that. So a Turing test, um, is you have a, a real human and you have an AI and they're in separate rooms. You can't tell which room has which, and you can only interact with them over a screen. And you, you ask each, you know, room and As many questions as you want, and you have to figure out which one has the real human, which one has the, has the AI, and if you can't tell the difference, then that AI is said to have passed the Turing test. Alan Turing, who was one of the, you know, early guys thinking about these things in the 19 forties, and people may have seen the movie, The Imitation Game, was all about Alan Turing, right? He came up with this idea, uh, and that was, for him, a test of, at what point do we say that AI is Really intelligent, like a human. It's when we can no longer tell which is the human, which is the AI.

AI assessment note: “That's it. The Turing test would be an example of that.”

Q sudden everybody has access to the same tools and everyone is making the same predictions, I'll use a stock market as an example. Not everyone could buy the same stock, uh, cause you need people to sell. And if everyone, the consensus is by, you know, you can't act on the prediction. Uh, so how, how does, how does, how do you see things evolving as these tools become ubiquitous?

A Okay, so two comments come to mind. So one, just the basic thing about the markets, um, even if you and I or any two people have exactly the same information about a particular stock, it doesn't necessarily, like, let's say we both think that Nvidia is going up, and we both have exactly the same reasons for it, and, um, you know, we're just completely singing out of the same songbook on that. Okay. There still is a possibility for a trade, because you may need money, Uh, when I don't. So I may want to buy and you may want to sell simply because you need the liquidity or your own situation. Maybe you already have as much NVIDIA as you could possibly have and you really need to diversify for your, you know, just to not have all your eggs in one basket. That could be a reason. So different people's motivations is also part of the equation. It's not just information. Although you are correct that essentially the stock market is an information processing mechanism and, um, The only way that I found consistently to do better than beating the index is you need an informational edge. You have to see something or understand something that somebody, some other market participant doesn't see. And then there's also these different motivational things. So that's like a general comment about the market. Um, and I'll do one more because I know some of your audience are investors or whatever. …

AI assessment note: “different people's motivations is also part of the equation. It's not just information.”

Q is that, uh, because there's a lack of IPOs, uh, VCs have been struggling to return, uh, capital to their LPs within a stated timeframe, let's call it 10 years. Um, and by consequence, their ability to raise a follow on fund is Is kind of, has kind of faced some headwinds. Um, does the data continue to prove that's the case, or are we starting to see a thaw?

A We're seeing, we're starting to see a thaw, but that doesn't mean that the venture fundraising market for funds has gotten much easier. This is a very difficult year to raise a venture fund, to put it, to put it bluntly. Part of that is because of liquidity problems. So I think that one of the underrated, uh, dynamics within venture capital is, uh, it functions at such long timescales that these things, what happened two or three years ago is still impacting us today. So if you're an LP, maybe you're not Stanford endowment, but you're just a, you're a, you're a institutional family office, for instance. You've got a decent amount of capital to devote across investment classes. You put a bunch of money into venture funds in 2019 and 20 20. Those venture funds have given you no money back, and many of them are probably not likely to give you money back anytime soon. So you're faced with the decision Okay, I could invest into a new class of venture funds, but I'm already pretty in deep in the venture asset class. I got a lot of money in venture that is not returning capital to me yet, and I don't want to put more money in right now. So I'm just going to hold off. And if enough LPs are kind of in that hold off position, fundraising for the whole asset class will retreat. The fly in the ointment here, the different countervailing narrative is big funds, the biggest venture funds in …

AI assessment note: “We're seeing, we're starting to see a thaw, but that doesn't mean”

Q Um, and while you might not see 10 X returns, um, you'll still, as an asset class, it'll still, uh, give you enough exposure with enough upside. Um, and so I'm, I'm curious then, do you have, um, For the, for the smaller managers or emerging managers who are able to raise any, any, uh, key insights that you can pick up on of why they may be having success?

A I think one of the things that we've seen a little bit more of lately, so there's two sort of trends within early stage venture. The first one is solo GPs. Um, those can be spin-outs from big funds that are doing their own thing. They can be deep operators in the space that have sort of a unique viewpoint, but the idea that you can do Everything that you want to do as a venture manager, but you don't need anybody else. You're, you're effectively a one man or one woman shop. That's kind of new. And it's kind of a bigger trend this year than it has been. Uh, I think that LPs are excited by that because you know that there's no dilution in the partnership, right? This person is the person who's going to make the investments. They're going to be there with the founders. It's kind of all on them. It's a little bit of a key person risk, but you know, That's okay. The second trend, which is interesting, which is, it's something that is always fascinating about venture. For a long time, it seemed like the goal of every venture manager was to get bigger. Like, okay, I'll start with a twenty-five million dollar fund. My second fund will be 50. My third fund will be a 150. And if I make it to fund four and I become a real firm, that one might be 300. Well, those are massively different investment strategies. You cannot invest into the same companies that you were investing into at a fifty…

AI assessment note: “there's two sort of trends within early stage venture. The first one is solo GPs”