The Exchanges

Q I want to get more into the perennial strategy and structure, but I think before that it would be great to just dive even deeper into the state of wealth management today. What have been the biggest problems drilling down further into the issues that you've seen, how wealth is managed, maybe the different types of wealth over time, but structurally, like, what are the biggest problems there?

A It's very interesting. So they're basically, there are two approaches, um, you can use to have your wealth managed, uh, if you're a wealthy individual. One is you can go To the traditional RIA or wealth management channel. And I'll talk about that in a second. The other one is you can go to traditional asset managers. Think, you know, large asset management firms, you know, of hedge funds, PE shops, things like that. And both those, uh, approaches I think have their own, uh, sort of problems when you're dealing with an individual that has an institutional amount of wealth, uh, or will, and are taxable, right? These two, these two The, the confluence of these two effects, uh, means that the sort of the two standard approaches I just described aren't really great. So wealth management, traditional wealth management, most of these firms, the independent firms have spun out of banks and the banks themselves, uh, don't train people to be professional investors, right? These people are trained to be service providers. They're trained to be responsive. They're trained to be helpful, but the actual investment acumen when you're at a large bank sits in a separate group. And you're rewarded as a wealth manager by how much you grow your book of business. So you're never trained to be an investment person per se. And then when you spin out, therefore, when you create your own large indepen…

AI assessment note: “the banks themselves, uh, don't train people to be professional investors”

Q Is that the main difference between A-sixteen Z perennial and let's say an iconic? How does it fit within the broader theme of these Silicon Valley oriented firms?

A Um, I think the Silicon Valley oriented firms, for the most part, again, are trying to be a full stack offering of all the services. Um, and so, you know, with a certain amount of revenue, there's only so much you can build in house, right? So a lot of these firms do not have professional investors. So I, I often ask people as a quiz, um, how many professional investors do you think are in, you know, RIA XYZ? And, uh, and people will answer, I mean, percent, right? People answer me, 20%, 50%, 30%, but, uh, the number often is zero or one or two people, um, and so that's the big difference between us and many of these other firms.

AI assessment note: “and so that's the big difference between us and many of these other firms.”

Q were a huge trend. Secondaries have taken storm. And so with secondaries, we're seeing not only lots of volume in secondary transactions, which is good, I guess, for growth investors, because that was really quiet for a while, but we're also seeing these multi-layered SPVs pull Proliferate and cause sometimes scams, but in terms of secondaries, what are you seeing and what are you advising your clients on with these?

A So it's a fascinating space to your point. Um, it's a little bit like the comment I made before where if you don't have professional investors on your team, uh, you have to build a fund of funds to invest. It's the same idea with these, these, uh, secondary vehicles. I'd say be very, very careful what you're doing. Um, attorneys love to use this term, perfect your ownership interest. So let's say we're going to use SpaceX again since we've been on SpaceX. Let's say you've been working at SpaceX years, and you create your own Molly Corp, and you put your SpaceX stock in that. SpaceX doesn't want you, or most companies, I don't know the pictures of SpaceX, don't want you to transfer your stock to an external person, right? So what you do is you transfer it to your own entity, And then you sell shares in that entity to other people, right? And it's not very clear, and, and you often charge fees, right? So a lot, I mean, it's sometimes quite egregious to your point. You've been paying two, three, five percent for the right to buy something. Um, but the problem is the, the stocks are sitting in that entity, and you are the manager of the entity, the employee is the manager of the entity. Um, and so they're the ones who ultimately, even though they've written the promise saying when there's a liquidity event, we'll sell the shares and hand you the, The money. Uh, I've seen personally…

AI assessment note: “I'd say be very, very careful what you're doing.”

Q For those founders that come to you, they're post exit, they're liquid. Do some of them want to start on their second or their third company? And how do you manage their portfolios to do that?

A Many do want to start a second and third company. Um, especially nowadays, you're young. Are you going to retire when you're 35 or 40 and not do anything? I mean, I don't think anyone wants to do that. So a lot of people want to do. And so if, if that's the goal, we try to keep the portfolio actually more liquid because their hope is that they can finance more of it themselves, right? The idea is, well, I did my first company and by IPO I owned 15% of it. The next time I want to own 30% of it, right? And so I'm going to bootstrap it and use my own capital, uh, more. So we try to, yes, is, is a short answer. We change how we would suggest the portfolio based on those, on those desires. A lot of founders, though, um, I think want to stick with their company very, very long term. They're not necessarily thinking, you know, two years out, I'm done. Uh, they want to stay along. I mean, this is their baby. They know it. They've grown it. So it's not necessarily, I'm going to completely detach. It's maybe my, um, level in intensity will decrease. Maybe I won't be CEO anymore. Maybe I'll be chair or something like that, but flat out leaving, I'd say it's kind of the exception. You do see it.

AI assessment note: “we try to keep the portfolio actually more liquid because their hope is that they can finance”

Q Through the different generations of social media and media in general, we've gone through things like forums, we've gone through different social feeds, mobile, now we're having different algorithms and AI. What have your biggest learnings through those different waves been? And how has Reddit endured?

A So, The things that are important to Reddit, we've talked about. It's communities. It's authenticity. It's, you know, alongside those things, maybe being stubborn. Not making changes too quickly. But the UI, the pixels, the formats, the platforms, That's all for grabs. Those things evolve. So I think what we've been able to do is evolve on the things that matter, like the platforms, you know, move to mobile, um, the style has changed, support more content. Like Reddit used to be only links. Right now it's links and texts and images and video and, um, you know, we don't have audio yet. I'd love to have audio. Um, but the communities, the authenticity, the voting, the human poweredness, even where Reddit has algorithms, um, at the end of the day, nothing can become popular on Reddit without a community of people within the context of their values voting on it and making it popular. Those are the qualities of Reddit we protect, But then we have to just continue to evolve, and we will, you know, we have and will continue to do so. So I think it's, yeah, being stubborn about the right things, but otherwise evolving on almost everything else.

AI assessment note: “being stubborn about the right things, but otherwise evolving on almost everything else.”

Q What do you think the key traits are that make a really good salesperson?

A The thing is, I'm a good SMB sales. Enterprise sales is a whole different art, um, that I've yet to master, but I'm working on. I think it's a mix of different things. I think the best salespeople are willing to listen. Um, you know, When you're a founder at the very beginning, you talk a lot because you're so proud. You want to say, ah, I do this, I do that, I do that. The best salespeople are the people that actually listen. Hey, what do you have? What's your problem? The ones I actually, and it's, it's actually not obvious, but the strongest ones are the ones that truly understand the problem. A lot of salespeople are very superficial about their understanding of the product that they're selling. At deal, when you're looking at like, okay, you have an HR stack, you have different companies, you have different employees, you have different contractors, like, How do you work through that? Like, what product makes the most sense for you, et cetera? We've kind of built and went from being, like, one product you sell, it's very easy, into, like, being very much, like, almost external consultants that help you as a company think about your global workforce, think about where you want it to head, and, like, that's very different than, like, you know, just selling, selling something super fast, right? And those are the salespeople I actually value the most, the ones that are able to…

AI assessment note: “I think the best salespeople are willing to listen.”

Q From a deal perspective, I want to unpack the process. How do you underwrite a company like this? Do you look at Tesla? Yeah.

A So, um, this is one where you have to think about a variety of scenarios off into the future. Um, and so to make it simple, I, I would frame it as there are three like base scenarios. The first is Waymo stays the only game in town. I certainly like hope that is the case. Um, Their dominant market share of a, a market that grows quite significantly. The, the second case is the market still grows significantly because, uh, it's such a great value proposition, self-driving. However, there are multiple players, um, that might be a Tesla. It could be a Zoox. It could be a Wave. Um, there are Chinese players as well. Um, but because of the technical challenge, I think it's a productive oligopoly. And then the third scenario is where things don't work out as well for Waymo and, you know, maybe, uh, there's impairment, maybe, uh, one of those other providers has an advantage over them in the fullness of time. I think the most likely scenario of those is that it is a productive oligopoly, that there are many players, but we expect Waymo to be, you know, a, a meaningful, uh, share of that overall market.

AI assessment note: “there are three like base scenarios. The first is Waymo stays the only game”

Q When you're evaluating these companies, what are the through lines you're looking through them, and then what are the metrics, the tangible numbers and kinds of slopes you're looking for?

A Yeah, I mean, look, each company is bespoke and, like, we, uh, don't bring the same lens cookie cutter to every company. Um, we are snobs around growth. We, um, you know, I, I mentioned earlier, like, our portfolio is growing, you know, on average over a hundred percent. Um, if you're an early growth company, um, you have to be growing, you know, several hundred I think part of like the through line of that is, um, we want to be invested in these companies time after time, round after round. There are many companies across our first four funds that we invest in all of them. If you're growing like 60%, um, at moderate scale, the likelihood that we're going to invest many times over time just isn't that great. And so we, we tend to be pretty snobbish about growth. Um, we think a lot about end state margin. So, like, I talked about gross margins earlier. Like, we can be, give you a bit of a pass today if your margins are lower, if we believe there's, like, a believable path to higher margins. And ultimately, like, we're thinking about, like, what can free cash flow margins be at scale? Um, that doesn't mean it needs to hit that in five years or necessarily even 10. Um, but we need to see the through line thereafter to make sense of things. Um, as we're, like, assessing each of these metrics, I think, like, retention is a really key one. Um, if you have, like, high gross retention,…

AI assessment note: “we are snobs around growth. We... our portfolio is growing, you know, on average over a hundred percent.”

Q That's phenomenal. I hope you know that. It's pretty incredible to be 15 months old. You were at SpaceX for nine years. Can you just talk more, go deeper into how this all started? And before we get too deep, obviously, I think the fundraising activity is super, super exciting, but we didn't talk about what Revel is. So could you explain what Revel is and how you started this?

A So just real quick, Revel is a platform for controlling and testing hardware systems. And I think kind of going way back, I've, you know, I grew up Building machines with my dad in the garage. Could never actually kind of write the, or make them do anything. Fast forward into college, I was, worked at a research lab in robotics, and then kind of similar story, I could like, I could design the whole, the robot, I could even fabricate, I could machine it, uh, but then I could not actually write the control software to go make it do what I wanted to do. So I ended up getting a, you know, Um, getting a computer science masters. I was a mechanical undergrad, and then later at SpaceX, it was really interesting. It was essentially the same problem at a much larger scale. We needed to write a lot of control software for the launch site, for the rocket as well, and there were all these kind of solutions that had been developed over the eighties, eighties and nineties, and that were, some of them were in use at SpaceX, but they were, you know, three decades old at this point. And, uh, overall it's just like this space has just seen, there's like, I think there's actually kind of a brain drain in this space. Like all these solutions were developed in the eighties and nineties. And then I think all the software engineers in the world got very excited about like the internet and, and worked…

AI assessment note: “Revel is a platform for controlling and testing hardware systems.”

Q Is it cool to have an open army? What is that like?

A Hey, it's very fun. I don't have a sword to, uh, you know, lead them into battle. I, uh, I just get to read the safe harbor disclosures at the, uh, at the start of our earnings call. But no, we, we're incredibly grateful. We certainly don't take it for granted. Um, and I think that, you know, we launched that website, accountable at opendoor.com, and we really believe that because we want to be held to account. One, again, because we recognize how critical this community has been to giving us a second birth. And again, I, you know, I've been here at Open Door for 10 years because I believe in this mission so much, and I think that you're still kind of hearing me keep going back to it so often is that, yeah, the mission matters, and so having people who believe in that same mission being able to hold us accountable is just kind of table stakes for the way we talk to our community.

AI assessment note: “Hey, it's very fun. I don't have a sword to, uh, you know”

Q company and shell of a culture, and now there's literally a cult following. You have the army around you, the open army, and then you have, uh, yeah, you have people like me and people like Keith who are just pounding the table and want more open doors. So Could you share, like, why is it so important to have a founder mentality with such a big turnaround like this?

A In order to create things that have not been created before, you need, like, exothermic energy. Like, we're, we're not a widget factory. Like the thing we don't do is like optimize the creation of a thing over and over again and try to turn like a dollar 10 into a dollar 12. That's not our job, right? If that was our job, then you can imagine like a professional manager being good at it, right? Like just look at the knobs, turn them slightly, like. But I find in the history of American corporations, and for Westworth, I think this is a uniquely like North American problem because it's not true in Japan, for example, but in history of American corporations, you get these significant moments of alpha followed by a slow decline once managers takeover, right? And you can, you can think of your favorite big company where it had that significant moment of alpha and then the decline happened. So I think the, the, the right words to use is not whether the founder is working at the company or not. The right words to use is the founder chair taken or not. Is someone sitting in the founder chair or is there at the, around every single meeting table in the company, an empty chair from someone whose job it is to call bullshit on things. Right? So look, I'm not anyone's, um, ideal dream of a corporate CEO. Like if you like go to Harvard Business School and imagine what a CEO looks like, it a…

AI assessment note: “In order to create things that have not been created before, you need, like, exothermic energy.”

Q Why? How did you get exposed to it growing up in Germany?

A So I have this, like, whole story about how I think, how important that is, and how people in Silicon Valley always underestimate how important it is that Silicon Valley has this, um, centralizing force on talent, but, uh, I think it, kind of, the main, the main thing I can remember is, while I was, like, super young, um, for the, for the purpose of that discussion, um, 1112, maybe, Maybe even slightly younger than that. Uh, there was a, an article. It was the title page of their Spiegel, which is like the, uh, one of the largest German newspapers, and it was talking about Silicon Valley. And I was like, You know, I was obsessed with technology. I was, like, reading all these, like, technology books. My dad was the opposite of that. My dad was, like, an economist, and he, ah, always made, made technology sound like, you know, not, not that serious, and you should do more serious things. But in that story, they were talking about this idea that there's Silicon Valley, and there's all these people, all these technologists, they come together, and they work on, on things that they think will change the future. Well, the, the story itself was actually very cynical. Um, I was, I was too young to really realize that, but their Spiegel is like a little bit anti-tech. So it was like the underlying tone of the story was just making fun of Silicon Valley and like how funny it is that all…

AI assessment note: “there was a, an article. It was the title page of their Spiegel”

Q Yeah, I mean, well, I think about all that, I'm like, do you ever think maybe I have multiple personalities?

A I think everyone does. I think people are afraid to just, like, express them, but that's why people, like, think they know me a lot, is because they see the personality at the press conferences where I'm talking shit and saying absurd things and wearing diamond chains and street wear, and then, like, I'm at my, Ranch just talking about cows, and have a gun on me, and jeans, and boots, and, um, a Carhartt jacket, like, and then I'm doing business, and then I'm doing a YouTube video, or I'm blowing up a car, like, so I have a bunch of different sides of me. I think people maybe are just afraid to express those sides sometimes, but tangent.

AI assessment note: “I think everyone does. I think people are afraid to just, like, express them”

Q You came out of stealth in December and you disclosed a very large seed round. How much have you raised a date and how much do you think you're going to need to raise to get this company to escape velocity?

A Yeah, I mean, it's a good question. So we raised four 75. Um, there's actually interest to do more, so we'll probably, probably raise some more in a, in a short time frame. I think to get to actual first product, it's probably a billion and a half is my guess. And it sounds like a huge number, but I think the opportunity is enormous. So this, this initial money will get us through much of the exploration and sort of a product, not productization, but like What it takes to build a product. So there's a lot of engineering required to get from the science to this is something I can productize. Then the actual productization will probably be the last billion or so. And it's just because we have to build a bunch of infrastructure. We have to, we're going to do a whole stack. Like we're not just going to sell a chip. You can't do that because we're changing the whole paradigm. So we do need a fair bit of money to do that, but that's a few years down the line.

AI assessment note: “we raised four 75... to get to actual first product, it's probably a billion and a half”

Q How did you get into this sport and how does it make you a better CEO?

A Um, well, I, I got into this before because I just like cars. I mean, I'm an engineer, you know, and cars are a thing you can engineer. They're also beautiful and they make cool sounds and, and all that. Um, there's something very visceral about them. It is, it is sort of a form of moving art in a sense, right? And experience. So, um, learning to do race car driving stuff, I actually just was pretty good at it when I first started. And, um, I raced, you know, like racing go-karts years ago, like in the early 2000. I didn't do anything for a long time because I, Went back to grad school. Had kids and, and all of these things. Um, after I sold Nirvana, I didn't want anything. I stayed in the same house and all that kind of stuff, but I wanted a Ferrari. I bought a Ferrari, took it to the track, and that, that just started again. The addiction. It was like that first hit. And, uh, yeah, so then I started to like, uh, I started racing in, in that series and sort of, you know, kept on upping the dose. And actually I'm right in the middle of a race at the moment. The Daytona 24 hour race is happening on Saturday. I was at the track all weekend because we had our practices this past weekend. I'm literally here and I go back to Daytona tomorrow. So, um, it's something, how does it make me a better CEO? I think there's actually a lot of lessons to learn from, from racing. It's, it's pre…

AI assessment note: “how does it make me a better CEO? I think there's actually a lot”

Q and use Brex. Start today at Brex.com slash sorcery. That's B-R-E-X dot com slash sorcery. Most of the ones I see in my feed, because I'm also, like, definitely, like, active on X, but I like a lot of data-driven content. Content is the data-driven content that you put out, whether it's charts or like macro analyses and that kind of thing. So like, what is your thinking behind those?

A I have a 10 Commandments type list of when I started writing on Twitter specifically, I told myself it's so easy to knee-jerk do stuff, right? Like you see, you scroll for a bit, you're like, oh man, this is the thing everyone's talking about. I need to have my opinion. I need to put a take out there. Um, I found that Paradigm to be not evergreen. This is just not a systematic way to do things. So I told myself, okay, what is my thing? And so I have four or five areas of competency. Two, I try to stick to facts and not opinions as often as possible. No political commentary. No, like, you know, try to minimize negativity in any way, um, and, and not offend people for no reason, even though sometimes I clearly missed that. Go. Um, and, and so, you know, things like that. I have a bunch of list of commandments. The reason the data thing always stands out to me is because I'm like, well, it is literally fact.

AI assessment note: “The reason the data thing always stands out to me is because I'm like, well, it is literally fact.”

Q and use Brex. Start today at Brex.com slash sorcery. That's B-R-E-X dot com slash sorcery. Most of the ones I see in my feed, because I'm also, like, definitely, like, active on X, but I like a lot of data-driven content. Content is the data-driven content that you put out, whether it's charts or like macro analyses and that kind of thing. So like, what is your thinking behind those?

A I have a 10 Commandments type list of when I started writing on Twitter specifically, I told myself it's so easy to knee-jerk do stuff, right? Like you see, you scroll for a bit, you're like, oh man, this is the thing everyone's talking about. I need to have my opinion. I need to put a take out there. Um, I found that Paradigm to be not evergreen. This is just not a systematic way to do things. So I told myself, okay, what is my thing? And so I have four or five areas of competency. Two, I try to stick to facts and not opinions as often as possible. No political commentary. No, like, you know, try to minimize negativity in any way, um, and, and not offend people for no reason, even though sometimes I clearly missed that. Go. Um, and, and so, you know, things like that. I have a bunch of list of commandments. The reason the data thing always stands out to me is because I'm like, well, it is literally fact.

AI assessment note: “The reason the data thing always stands out to me is because I'm like, well, it is literally fact.”

Q and use Brex. Start today at Brex.com slash sorcery. That's B-R-E-X dot com slash sorcery. Most of the ones I see in my feed, because I'm also, like, definitely, like, active on X, but I like a lot of data-driven content. Content is the data-driven content that you put out, whether it's charts or like macro analyses and that kind of thing. So like, what is your thinking behind those?

A I have a 10 Commandments type list of when I started writing on Twitter specifically, I told myself it's so easy to knee-jerk do stuff, right? Like you see, you scroll for a bit, you're like, oh man, this is the thing everyone's talking about. I need to have my opinion. I need to put a take out there. Um, I found that Paradigm to be not evergreen. This is just not a systematic way to do things. So I told myself, okay, what is my thing? And so I have four or five areas of competency. Two, I try to stick to facts and not opinions as often as possible. No political commentary. No, like, you know, try to minimize negativity in any way, um, and, and not offend people for no reason, even though sometimes I clearly missed that. Go. Um, and, and so, you know, things like that. I have a bunch of list of commandments. The reason the data thing always stands out to me is because I'm like, well, it is literally fact.

AI assessment note: “reason the data thing always stands out to me is because I'm like, well, it is literally fact”

Q Close out. This is the most difficult question I'm going to ask you today. This question is from Omnicorp. Are you happy?

A Very happy. Very happy. Um, look, I think, I think at the end of the day, like, I'm not gonna lie. The last two and a half years were really hard. Uh, there was a lot of, um, A lot of uncertainty, really high attrition. Like, reaccelerating growth is really hard. Uh, most companies can't do it. It's just really hard to reignite the thing that made you great. Because you're much bigger, there's much more scale, there's scar tissue everywhere. Um, so it, it took a lot from me and the team, uh, on a very personal level, like a lot of stress and anxiety and, you know, keeping my mental health, the team's mental health in a good place, uh, took a lot. Um, so, so I, I think the outcome is, is of course really exciting for everyone, and we're really excited to build this part of Capital One, but, but I think to me the most exciting thing is This allows me to go back and say all of this really fucking hard work was worth it. And, and there's a thing which is saying, well, the numbers are better, the metrics are better, and the customers are happier, the NPS is higher, and the retention is higher. Like, all these things, of course, they matter, right? But there's a very big difference between that and saying, here's a crystallized outcome, which is the biggest deal of this size that ever happened in history, and the scale of a bank and a fintech company. Uh, and by the way, here's what …

AI assessment note: “Very happy. Very happy. Um, look, I think, I think at the end”

Q Which of the other companies do you think is most underrated?

A Honestly, I think they're all severely underrated right now. Like, I, I think that XAI is, like, severely underrated, and it, and it makes sense, like the, it's revenue scale compared to, Open Eye, Anthropic, Google is obviously like much smaller, but it just kind of blows my mind that people don't understand how fast the company is moving. And like, you just have to look at the, the derivatives of progress. Um, and then also just like look the bottlenecks I believe the bottleneck at least for inference is going to be like power. And even if you have the best model in the world, you know, if you can only like deliver it to one percent of the market or two percent of the market demands, like you're heavily limited in your kind of growth rate and expansion opportunities. I just, I think XAI is going to Elon's the best in the world at atoms, and I think atoms are going to be a decisive factor in the AI race. And it just, the way Elon builds companies is different than other people. He builds, the way I describe it is he builds up potential energy, and then he converts up potential energy into kinetic energy. Whereas a lot of other companies, like they're kind of, whenever they have potential energy, they're just immediately converting it into kinetic energy. Elon builds gigafactories that are not producing any cars or revenue for, like, five years, and then immediately start makin…

AI assessment note: “I think that XAI is, like, severely underrated”

Q And I know that was one of your first partners. You talked about that a little bit. So can you just talk about how SpaceX has been expanding Starlink and the ways in which you work together?

A Yeah, I mean, so Starlink is, is really amazing in the sense that it just continues to get better so fast, and I mean that in a few ways. So one is, as I mentioned, they're expanding really fast. They're rolling out in new countries every week in major markets, right? So, um, just as a, as a real recent example, just this last week they launched in South Korea, right? Big market and an important ally for the U.S., so that's a big deal. The second thing is they Are also expanding the types of services that are available. It started that Starlink was just a consumer product, then they brought it to Enterprise, um, and, you know, initially that was used by Enterprise as more as a backup, and now it's being used more as a primary, and that is because the service keeps getting better and better and better as more birds, more satellites go up into the sky, and then each generation of satellite is also better. Not to mention the terminals on the ground, and there's now multiple types of Terminals, including the more recent minis that people really like. Hey, I can put it in a backpack. If I go on a hike, if I'm traveling, I can put it on the ski rack of my car. Perfect internet all the time. And so all that does for us is it gives us more use cases that we can unlock where we say, okay, now that you have connectivity on the oil rig or even, you know, on a farm or a ranch, you know, wh…

AI assessment note: “all that does for us is it gives us more use cases that we can unlock”

Q I guess to take a step back a little bit further, where are we exactly in the AI super cycle?

A It's a, it's a great question, and my humble answer is, I don't think anyone really knows. It is early, and it is useful to draw from history about similar kinds of large changes. And if you look back, even things like industrialization, which one tends to think of as like some discrete thing that just happened within a few years in, I don't know, 1800, something like that, actually is a phenomenon that started closer to the 16th century and just kept going for a very, very, very long time. I think AI represents the beginnings of us being able To run truly thinking algorithms, to industrialize thought in a very, very big way, and I think it's very much the beginning. And I think there are lots and lots of applications for things like this. Everything, as I said, from being able to pretty much Create, for example, what's called a classifier or a sentiment detector. You have a piece of text. Is this text angry or happy? Um, being able to do problems like that without really needing to know any programming. Two, Let me think about a complex analysis that I am going to do when I'm given a new piece of information. We get revenue information every single day. We often want to know, why did revenue go up? Did it go down? Is there something else? These are all things that a human with expertise in the area needed to be able to do. Now we can begin to write down some of these things in…

AI assessment note: “It is early, and it is useful to draw from history”

Q What did you learn from your acquisition and how are you making this onboarding process? Founders ship faster on deal. Set up payroll for any country in minutes, hire anyone anywhere, get visas handled fast, and get back to building. Visit deel.com slash sorcery. That's deel.com slash s-o-u-r-c-e-r-y.

A Our acquisition went pretty smoothly. It's a little bit different from Observe in that we were more tech, like, tech and talent rather than a running product. Observe is a running product. It's a business. Um, to me, the most important thing to remember if you are an acquired company is that you have to become one with your new home. You need to align yourself, um, with what your new home, in this case, snowflake wants. On the other hand, As the CEO of Snowflake, I have to recognize that what this startup, what Observe has created is magic. It's really hard to create products that are working well. People often underestimate it because, you know, we see so many successful companies, but to me, a working product is pure magic. Frank, my predecessor, used to say a working product or working startup is like a life force. You just can't create it. It's very, very special, and so we're going to try everything that we can do to keep that team together. Jeremy is going to report to me directly, and we're going to empower him to scale that business as rapidly as he can, benefiting from things like close access to Snowflake engineers, the scale of the platform. They no longer have to pay Snowflake for using Snowflake. I think things like that are going to be beneficial. They're trying to strike the right elements between Give them, give them that support, but also give them that indepen…

AI assessment note: “Jeremy is going to report to me directly, and we're going to empower him”

Q back to Alfred's point. So he was talking about all the different kinds of investments he's made and things that he's learned and the principles, and he noted zipline for the capital P pivot versus the lowercase p pivot. So could you just talk about that shift, like that dramatic shift and how you had to reorient and now you're building out vertical integration and doing all this crazy stuff?

A Yeah, I mean, I think, you know, when we started, when we started building this company, I mean, I was 23 years old. We were totally clueless. We had no idea what we were doing. Alfred ended up, um, being our first, like, institutional investor, investing in the company, and I kind of went to him at that time. I mean, we were, we were building all kinds of different solutions, but none of them were really working. We, we knew that we were really interested in robotics, and the more I learned, the more I kind of concluded that we should really go focus on logistics. The problem was, You know, we wanted to build an autonomous logistics system that could deliver 10 times as fast, half the cost. It was very obvious we should build something that could fly and that could deliver from any, ah, you know, store or restaurant or hospital or primary care facility directly to homes. That was illegal. And so I think that was probably the nature of my disagreement with Alfred. I was like, Alfred, I have a good idea. Let's go do something that's illegal. And he's like, I don't know if it's a good idea to go do something that's illegal. Caller, like, can we, you know, pick a business model that is legal? Um, and of course, you know, the whole, The, the whole crazy conversation around that was like, okay, well then we're gonna go to somewhere where it is legal. And I think that this naivete th…

AI assessment note: “we were building all kinds of different solutions, but none of them were really working.”

Q Um, I think it would be actually pretty cool if we brought back those, like, vacuum sealed tubes. Do you remember those?

A We talk about those all the time. Yeah, like the pneumatic tube systems basically for hospitals. It's funny you should mention that because actually that's exactly how we describe this product to hospital systems that we're working with. Because they used to have those systems, and they would basically walk to a wall, they'd put something, and they'd stick it in a tube, and it'd instantly be teleported somewhere else in the building. And so the way we talk to people about this is like, it's exactly like your pneumatic tube system. But now, instead of going somewhere else in the building, it can be automatically teleported to any home, you know, within range. And so, yeah, it's very exactly the same paradigm. I think these kinds of systems, those tube systems though, they're very expensive. They take a long time to install. They can only really serve like the building or an overall like facility.

AI assessment note: “We talk about those all the time. Yeah, like the pneumatic tube systems”

Q You recently got up to five hundred and fifty million dollars to expand into Africa. Can you break this down?

A Yeah, I mean, we announced this a couple weeks ago. Um, you know, it's really coming, uh, from the, the US government, the State Department, trying to redefine how it is delivering healthcare and, uh, you know, providing help to developing economies. Um, obviously, you know, USAID was shut down a year ago. I think there was this, you know, huge political battle over that, over, like, what was the impact? But, you know, interestingly, the countries themselves have been extremely consistent. You know, as I mentioned before, like, they want They want trade, not aid. They, they, they want AI and robotics, not cost plus contracting provided by US NGOs. Like this should not be that surprising to anybody who has kind of, um, spent time in Africa or, you know, sees the analogs in the US. Um, and so the, the, uh, Basically, the U.S. government is taking a new approach they're calling commercial diplomacy with the idea that, look, like, we want to be helping these countries turbocharge their economies and leapfrog into the future, but they should be doing it by working directly with U.S. companies, and we should be using that to, um, to secure U.S. technology and manufacturing leadership for the decade to come. Um, and so, you know, Zipline is already, in a lot of these countries, operating large autonomous logistics systems, delivering life-saving medical care, um, and the, the, Kind of…

AI assessment note: “countries themselves are committing, uh, uh, an overwhelming majority of the CapEx and OpEx”

Q do follow you on socials. I follow Nikhil on socials, and every day, You're meeting a new family of royalty. You're meeting a new leader of a country. You're constantly in the UAE. I see you at the White House all the time. You guys are in multiple places sometimes like a day. So how do you maintain like mental clarity and at least some sanity through all that travel?

A One is, um, you have to sleep on the airplanes. Uh, so that is a critical, uh, component of this. Two is you have to train your body to be able to handle, uh, any time zone. Um, so you can withstand that. And three is if the project is exciting enough and the adrenaline is going, um, this is like, no, this is like no problem. This is a gift. Um, this is the, it's, it's not, I can't imagine doing anything else. Um, it truly is a gift. And so the trips we take are not vanity. They're always Very carefully chosen, and I won't go unless I think there's an actual real outcome that's important for the company to go do it, because time is just too valuable. The money that we've raised represents time, and I think of myself as I'm in the time business, and I try to give the team more time to be able to accomplish these really hard things, and so, ah, you know, we're working, you know, night and day because the time is finite, um, to get this done, and so it happens to be a period of time where things are, are good. These are the good old days, ah, right now. Um, but I don't take that for granted, because the, the time will run out, the money will run out, and we have to be successful in building a real business.

AI assessment note: “One is, um, you have to sleep on the airplanes.”

Q So, how did this evolve, and what is your current set, like, what is in your garage?

A Well, my garage at home is mostly full of my, uh, my personal stuff, so I have a bunch of motorcycles, I have a bunch of cars, I have a lot of personal projects. Uh, I don't really have a lot of Anduril or weapons-related projects at home, because I've got a way better workshop and a way better lab here at Anduril HQ. It wouldn't make, wouldn't make sense for me to go home and And do that stuff. If I'm gonna work on those things, I'll just, I'll just stay late at work. Um, but that, that, that, that, that's been an evolution, you know, compared to the days, you know, in the very beginning of Anderil, uh, you know, I, I, I, even before Anderil, you know, I was building jet engines at my house, uh, in my empty swimming pool. So, uh, it's, it's, it's come a long way. Now I have a better place to test everything.

AI assessment note: “my garage at home is mostly full of my, uh, my personal stuff”

Q This is more of a personal question, but what's it like being a father? How has this changed your perspective of the world?

A I don't think it has changed it all that much yet. I know, I think it will happen over time. Um, you know, I, I, me and my wife are, um, me and my wife are very traditional. She's raising the kid. I'm working for the dough. Um, and a lot of the usual things people say, like, ah, you know, the kid, you know, really made me appreciate, you know, long-term perspective versus short-term. I like to think I'm already a pretty long-term thinker. I'm doing things like Andrel because I care about the long-term future of our country. I feel like, ah, I want our country to be better. I want to leave a better place for my kids. I actually cared about that even before I had kids, so I was already pretty amped up on a lot of the things that I think people say change over time, and then also, he's just so little right now. You know, he, he, uh, his only words he can say are, are truck and car, um, which are pretty good words to start with.

AI assessment note: “I don't think it has changed it all that much yet.”

Q What was it like to open up Arsenal One? I know it's under development, but choosing Ohio, where you're from, what was that like?

A Yeah, at some point when we got down to like the final three states, uh, I realized that the, the bias was going to look really bad to the company, so I just kind of sat back and I'm like, you know what, I don't, I don't want to push this. Uh, I think Ohio's great, obviously as a native Ohioan, uh, I thought it would be awesome to land there. Uh, the reality is that when it comes down to just a competition for, uh, you know, where we were going to end up doing this, and that was some combination of Facilities, the access to utility scale, you know, power, water, things like that, as well as a labor force that could scale with us as we grew out to that five million square feet. Um, Ohio just had the most competitive, uh, opportunity or offer for us. Uh, so, uh, we kind of natively ended up going there. Uh, you know, when, when we did the ribbon cutting, uh, earlier this year, I brought my mom with me since she's just, she lives right down the road. And, uh, You know, having her meet the governor and having the governor thank her as if somehow she was the one that convinced us to go to Ohio was, was somewhat entertaining.

AI assessment note: “I thought it would be awesome to land there... when we did the ribbon cutting”