The Exchanges

Q For people that don't know, like, what are the typical products that they can order, and do you have any partnerships with people?

A Yeah, Zipline works with amazing global brands like Walmart, Chipotle, Sweetgreen, Mendocino Farms, Wendy's, Buffalo Wild Wings, many, many others. We all also this year are launching our healthcare business in the US. We're partnered with folks like Cleveland Clinic and Ohio Health and Michigan Medicine and many others. Um, all of this is really just enabling teleportation from their stores, restaurants, or Health facilities directly to homes. So we actually got a, you know, a text the other day from someone who was like, oh, you know, it was late at night. My two-year-old was feeling terrible. I had a terrible fever. I was freaking out trying to figure out, like, am I going to really get this kid into the car and, like, buckle them in and drive to the local pharmacy and wait in line and try to, and then she thought, oh wait, never mind, zipline, and they deliver pharmacy now from Walmart. She got on, ordered exactly what she needed. It was delivered less than 10 minutes later. Gave it to the kid. Kid felt better. Went to sleep. She got sleep that night. She wrote us this long email the next morning being like, you have no idea how game-changing it is to have access to this kind of a service that just feels, you know, it feels like a different thing. And these kinds of services, you know, today with most of our partners, we're operating something like 16, 17 hours a day. Um, o…

AI assessment note: “Zipline works with amazing global brands like Walmart, Chipotle, Sweetgreen”

Q with Turing. Turing builds realistic reinforcement learning environments and data systems based on real operational traces, the kind of infrastructure Frontier Labs need to train superintelligence. Visit Turing.com slash S-O-U-R-C-E-R-Y. I've done several, if not a lot of interviews with the defense tech sector, which has a different kind of payload, but for you, have you gotten any demand or interest from that sector for buying any of the drones?

A Yeah, all the time. I mean, I think interestingly, this is an area where because of the nature of the market, um, the commercial progress that's being made technologically is, is, Exceeding the military progress that's being made in this area, probably by, like, an order of magnitude. So these systems, and, and by the way, you see that in Ukraine, where it's like the vast majority of those drones that were being used, they're basically commercial drones with, like, slight modifications, you know, where you put Z-IV on them. Um, same thing is happening here, where the military is also going to want access to autonomous logistics. I think in the long run, It's just a hundred percent the case that the military should be buying commercial solutions rather than trying to create their own kind of, like, exquisite, bespoke solutions to that problem because, um, commercial market is so big, there's so much capital available to improve all the main components of the technology that, um, the military no longer has to do this in a one-off way. Right now, Zipline is so completely overwhelmed with demand on the commercial side that, like, We're doing one thing and one thing only. It's all we have time to focus on. You know, Zipline is gonna scale to a million deliveries a day over the next couple years, and that is gonna require us to continue that rate of, like, 15% week-over-week growth f…

AI assessment note: “Yeah, all the time.”

Q So we're maybe like a week or so after the yes no event. Can you share more about what you released?

A We released a few things. One is a big upgrade to prediction markets. So one of the things is you can see prediction markets now on web. Whereas in the past, you had to be logged into the app, which I think one of the big use cases of prediction markets is not just as a trading product, but almost as a news media product, the source of information. So that makes it a lot easier for, for people to engage and interact with our prediction markets. The second thing is combos for sports and, uh, and the ability to trade individual player actions. So the sports experience in Robinhood is just getting much deeper and much more dynamic. You can put together lots of trades into one big one.

AI assessment note: “We released a few things. One is a big upgrade to prediction markets.”

Q And that's a closed end fund. So is that just structurally incorrect for this? What do you think about that? Cause it's the same thing for privately listed companies in a public domain.

A Yeah. So that's a closed end publicly listed fund. Um, and we actually, we we've announced something called Robinhood ventures, which is the general umbrella underlying our efforts to sort of like facilitate access to private companies. Tokenization is a mechanism to do that, but, uh, we, we don't, it's not yet legal in the US to tokenize private companies. So we've, we've done some early steps along that outside the US in, in EU where we're tokenizing public stocks. And we also did a token giveaway of SpaceX and open AI. So in the U S we have Robinhood ventures and we filed Robinhood ventures fund one, which is a closed end listed fund, uh, that'll invest in private companies. The difference is the fund is by its nature, more diversified. So you're not able to trade, uh, an individual company, but you're trading basically a basket of companies. And, and I think it's good, but it's, it's, um, Obviously it's a, it's a different product. This is more of like, if I want to passively have exposure to private companies as a broader asset class, closed debt fund is a great solution. And I think it's, it's probably the best we can get in the U S until tokenization becomes legal. Um, and then outside the U S we, we've already demonstrated the mechanism to, to trade individual companies.

AI assessment note: “closed debt fund is a great solution. And I think it's, it's probably the best”

Q Okay, so what is a vision and the mission of Harmonic?

A Yeah. So harmonic is building what we call mathematical super intelligence, and it's an artificial intelligence that can solve math problems better than any human mathematician. And so, uh, the company has been around for a couple of years. I'm chairman of the board and co-founder, but I'm not like day-to-day operating. Well, the, the north star was, can we actually solve really, really important math problems like the Riemann hypothesis or You know, Hodge conjecture. You know, there's like, This, this group of math problems that have been open for hundreds of years that are called the millennium prize problems, and they're considered very big, difficult, and, and actually valuable. So that was kind of the north star. And the reason we wanted to do that was if we could solve those problems, well, maybe we could everything downstream of math, like theoretical physics becomes unlocked. So then you can imagine Solving really hard physics problems. Like, I don't know if you're interested in this, but I was very interested as a physics major. How can we unify, uh, the strong, the weak, and the electromagnetic force with gravity? So it's sort of like, there's these four forces. Three of them, we kind of have a theory for how they originated from one Single force in the early part of the universe, and then we have a hypothesis that we can unify these three. Gravity somehow fits into t…

AI assessment note: “harmonic is building what we call mathematical super intelligence”

Q So you talked a little bit in the beginning about the overall structure of WonderCo. I'm curious if we could put some numbers behind that. So how much are you investing at the seed round, the growth and these build strategies?

A So we have, uh, our core fund that will do both builds and invest in venture companies. Uh, builds will do about one a year and we'll put 50, seventy-five million dollars in those builds. We take quite a bit of ownership in the early days because frankly, it's our sweat equity. It's what we roll up our sleeves. Um, and we all pitch in. This is not sort of a every partner does one. Um, it's, that's why we sort of say we feel more like a company in, in a day-to-day of how we operate. Uh, and it's, but it's fun. It's much more collegial. Uh, on the venture side, we'll invest five, 10, fifteen million dollars. Uh, we don't have a strong view on, uh, you know, things like we must have X ownership, we must be in this round. We found, again, going back to it, be the people business. Of course, the best returns are coming from as early as you invest, but, uh, if you just invest in generational founders, it tends to work out, uh, if you look back at the last 1015 years for us and for, for others. Anthony and I also have a lot of fun with the time that we spend on our seed fund. It's a fifty million dollar fund. We're typically investing 500,000 dollars, which means we're not leading. We are participating alongside other great seed investors, many of whom we've known and worked with for 1015 years, 20 years. Many, Dropbox has been a great fountain of producing VCs over the last 1015 year…

AI assessment note: “builds and we'll put 50, seventy-five million... venture side, we'll invest five, 10, fifteen”

Q options, crypto, all in one place. They'll even give you an uncapped one percent match when you transfer your investments over from another platform. If you want to build a portfolio that actually reflects your thesis, visit public.com slash sorcery, paid for by Public Investing. Full disclosures in the description. So given the fact that you split both sides, how do you manage your time between Anduril and Founders Fund?

A I, I don't. I, uh, you know, I'm, I have an awesome, uh, team around me. My EA, Elena, has been with me for over 10 years, and she's an absolute rock star. I have a chief of staff, Ellie Untermeyer, who literally goes wherever I go. Um, so if I'm in San Francisco at Founders Fund, she sits right next to me and makes sure I'm on task. When I come down here to Andreal headquarters, she sits right next to me and makes sure I'm on task. So, uh, it's just kind of whatever task is At hand at that moment. Uh, it, it's just a lot of context switching between the two. Um, and the Founders Fund team has always been really cool about this. I mean, if you, we have no build program, there's no incubation policy or anything like that at Founders Fund, but, you know, Peter started Palantir. I started Anderil. Um, uh, Scott Nolan started General Matter. Delia and Esperohov started Varda, and it's just kind of part of the culture. We're totally fine with, uh, the splitting of time and concentrating our efforts into things that we're the most passionate about. So, I honestly just feel really lucky that I have a team at Founders Fund that is super supportive of this crazy model.

AI assessment note: “I have an awesome, uh, team around me. My EA, Elena”

Q Are you also outsourcing and finding different ways to manufacture?

A We have a lot of manufacturing partners. Obviously, we're not building every subcomponent of everything that we're building, so we're, you know, working with other vendors, we're working with other machine shops, we're working with Other manufacturers. Uh, and then we're pulling it all together, generally in our own facilities. Uh, but, you know, we're, uh, in the first quarter of next year, we'll be opening our soon to be five million square foot factory campus called Arsenal One, just outside of Columbus, Ohio, uh, which is where we'll start ramping up our collaborative combat aircraft to the autonomous fighter plane production. Um, and we have other facilities around the country. We have, you know, shipyards. We have, uh, wood and munition assembly that's happening, uh, in Atlanta, Georgia. Uh, you know, we do some stuff right here in Costa Mesa at our headquarters. So, uh, I imagine that there will be multiple factories across, not just the United States, but across, uh, allied and partner nations as well, where we're ramping that manufacturing muscle at the same time.

AI assessment note: “We have a lot of manufacturing partners. Obviously, we're not building every subcomponent”

Q And what are we standing in front of right now?

A We are standing in front of, this is our XLUUV. In Australia, these are called Ghost Sharks. Uh, here in America, they're just called the XLUUV. This is a fully robotic submarine, so, uh, no humans on board, no, no people remote controlling, fully autonomous, so you give it a mission, you program some waypoints, you program a mission set of what it's supposed to look for, where it's supposed to drop payloads, uh, when it's supposed to surface. And you send it out on its way and it goes and performs its mission completely autonomously. So, uh, these are designed, uh, at our, um, office in Sydney, Australia, which I had the pleasure of setting up a couple of years ago when we first launched this program. Um, and now they are currently being manufactured in our, uh, our Sydney manufacturing facility that just opened. It's about 75,000 square feet and is capable of making dozens of these a year. And they'll be expanding production for them to our new facility in Quonset, Rhode Island. Uh, where we'll be making both our dive LDs, our smaller submarines, and these big guys for the U.S. market. The, uh, dev test area here is a, an area that is meant to break things. It's the blunt version of it. So, uh, these guys work on figuring out all sorts of ways to break our products. So whether that's spraying it with salt water, as in the case of our little chamber over here, um, I don't know…

AI assessment note: “We are standing in front of, this is our XLUUV.”

Q Well, this is fun. This is great. I've been waiting to do this for a while now. You are the managing director at General Catalyst. You are a managing director at General Catalyst. I don't think many people know the breadth of General Catalyst's asset management function. So could you just break down how it's structured?

A Yeah, sure. I can talk a little bit about GC and how we're set up, what we're all working on. So we were a venture capital firm, but we're evolving to be really a company. And people ask me, well, what does that mean? There are two big parts to it. As a company, one, we're actually building companies for the long term. So folks have seen the announcement about us buying a hospital system in Ohio, for example. That's a, we did that through an organization called HATCO, which we incubated and then bought a hospital, and we plan to hold that for a really long period of time. We have a wealth management business that we've set up to help founders manage their money. That's another company we've built in house that we plan to hold for a very long time. And then finally, we have now an AI consulting business called Percepta that really comes in and changes Fortune 100 companies, helps implement AI, Really leverages everything we've learned from AI investing, and that's another company we've built in-house that we, you know, will hold for a really long time, maybe forever in these cases. So GC as a company is building in-house what we call transformation companies, with these three being examples of businesses we think should exist, are good for society. We're not planning on taking them public. We want to hold them for a really long time. In addition to these three transformation com…

AI assessment note: “two big parts to it... one, we're actually building companies... we have another bucket”

Q This was a good question from Kyle Harrison, but he wanted to ask, how do you decide when to choose from building an AI roll up or investing in another SaaS company?

A Yeah, it's a really good question. Uh, one answer to that is percent automation. So if we think a space is going to be 90 or a hundred percent automated, then probably software is the best solution. And honestly, an incumbent like Microsoft or Amazon or Google that has the distribution can just push the software. It can be part of your Google workplace or your prime subscription. So if something's a hundred percent automatable, it probably should be a software or agentic solution And then most likely the winner there could be a fast growing company, but also it's very likely someone who just already has the distribution. Um, so if coding gets fully automated, maybe it can just be pushed through by Google or Microsoft or someone else. So one thing we're careful about in the AI enable rollups is we, we target 30% automation at least, but we actually don't want more than 70% automation because if something is approaching 80, 90 or a hundred percent automation, then there's really not the people services part of it. So that's one important part. The second thing is fragmentation. Like when the industry is really hard to sell into, imagine creating AI native software for homeowner association, HOA management, like that's just extremely hard to sell into. So you could create an amazing product, I'm sure, but your sales process would be very, very slow. So the second thing we look for…

AI assessment note: “one answer to that is percent automation... The second thing is fragmentation.”

Q You've been at General Catalyst for a couple years now. What is the biggest lesson that you've learned from him on?

A Definitely, um, advocating on team and paying up when you have to. Like, um, I got to learn from HT some epic stories about how GC got involved in Stripe. And, you know, I won't repeat all of the details there, but there are some companies you just really want to be in. And it's less about the terms. It's more about catch them early. Like you can buy 10 or 20% of an iconic company at seed or at A or at B. So a lot of people have the mentality of, oh, this is a hundred million dollar check. Let's spend all our time. This is more important than like a one million seed check. But the reality is normally your a hundred million check is buying you 10% of a company. Your seed check for one million is also buying you 10% of the company. So it's really important to kind of what are going to be the next 50 iconic companies and ideally try to catch them early and pay just as much attention to buying 10% of some seed business as 10% of an established business. So we have really a GC shifted a lot. Our focus on seed, um, with the acquisition of La Familia and bringing in Jeanette and who's running our Europe practice and as a very prolific seed investor from La Familia, um, Venture Highway, the India seed firm that we also acquired, uh, we brought in recently and then Yuri to come lead our us seed practice. He had a successful seed firm. So I think that mentality we're really pushing throu…

AI assessment note: “Definitely, um, advocating on team and paying up when you have to.”

Q Sometimes I feel good. Sometimes I need to go to the spa and get a massage. This will be a shift into investing because I think this does package itself well into how you chose to lead Tusk Ventures and how you're now going into services for equity. So can you talk about that shift?

A Yeah, sure. It's, so I, you know, I don't, unlike most people you talk to, like I didn't start off in business or technology, right? I worked in politics and government for years and years and years. You know, I made government salaries or campaign salaries for years and years. And then I kind of found attack totally by accident, right? So, uh, my last like real job was in 2009. I was Mike Bloomberg's campaign manager and ran for mayor of New York City. We won. And I decided that I thought there was sort of in the kind of political consulting business, a hole in the model where typically people did one of two things. Either they ran comprehensive campaigns for Companies or institutions or candidates, whoever it was, but in one place, or they would work nationally, but they would offer one skill set. They were a pollster. They made ads, whatever it was. And my view was that the world had changed enough that the way to get things done in government and politics was no longer like a guy knows a guy and, you know, the right guy. It's really multifaceted, right? So yes, it's the inside game of lobbying, but it is also Um, earned media, and paid media, and social media, and grassroots, and all these other tools, and I felt like the amalgamation of experiences I had had, both in terms of the things I've done, and the different places that I've lived and worked, said to me, I think som…

AI assessment note: “I decided that I thought there was sort of in the kind of political consulting business”

Q Given those categories across energy, ships, and manufacturing, what are some of the portfolio companies that American Dynamism has?

A Yeah, so I mean, look, we, we today are investing very actively, obviously defense, space, public safety, energy, and now we're increasingly looking at mining, manufacturing, um, and of course we make like the one-off investments in other areas too when we find an iconic great founder. Some of those companies in energy, um, I think of energy as like generation, transmission, and storage as like the three big buckets of energy. And so for energy generation, we have an investment in Radiant Nuclear. Um, I'm very excited about that company. Uh, it's been a long time since this country's had a new nuclear power company. I think Radiant is going to turn on the first fueled nuclear reactor of a new design in like 50 plus years. I think they're going to do it next year. I'm very excited about them. Um, amazing team. Amazing pace of execution. Their productivity is out, is just extraordinary. And they're building a reactor that fits in a shipping container and can be transportable. Um, so that's awesome for natural disasters. It's awesome for remote locations. Um, it's basically a diesel generator anywhere that gives you five years of clean energy when you flip it on. Um, in terms of resiliency and storage, we have an investment in base energy. So base energy is, they're starting in Texas, but they'll expand from there. This was started by Zach Dell and Justin Lopez. Zach Dell worked a…

AI assessment note: “we have an investment in Radiant Nuclear... we have an investment in base energy”

Q And you became so popular because of the media. So I'm curious, like, when did you decide to take the media side so seriously?

A The media took me seriously. It wasn't a, it wasn't a, it was, it was a happy accident. I came to New York City after college in 2006 to do theater, and I ran out of money. And so I had to get a job and it was go back to school, which sounded terrible, or move home, which was way worse, or Bartend, you know, do a survival job. And so I got my real estate license because a friend said it was just like theater. It's all a game of improv. You meet someone on the streets. They say, I want to find an apartment. You say yes. And yes. And it's just acting is selling, right? Except you're doing it authentically and it's not about taking from people. It's about helping them make a decision they're going to make anyway, except now they get to make it with you and not make it in a year or with somebody else. Um, so I got my real estate license. Lehman Brothers filed for bankruptcy that morning, and I was off to the races from there, and so I put the theater thing to the side, because I had to make money. I had to pay my rent to stay in the city, um, and I was at the bottom of the barrel there, and then I went to an open casting hall for Millionaire Listing New York, which was a TV show on Bravo, and I was cast on that, and that started in 2010. The show premiered in 2012, and I did it for 10 years. So yeah, so that show and that show was a shotgun for me into the real estate world, you kn…

AI assessment note: “The media took me seriously. It wasn't a, it was, it was a happy accident.”

Q Sorcery has had a lot of fun with tech over the last year or so. One of the most fun podcasts we did in the last couple weeks was with Keithra Boy, and this was when he just rejoined Opendoor as board chair. The funny thing about that was specifically like the cult sentiment behind it. How has the public market evolved?

A If you look back maybe, you know, six, seven years ago, the idea of retail investors like was, was not a thing, right? Like, you know, what I love about the public markets is that anyone can invest in it, right? So, you know, I would debate, it's actually kind of how I got started. Like I used to debate stocks with my grandfather and he worked in the plumbing industry. So he, you know, he wasn't a professional stock picker, but he loved investing. And so he would invest in, you know, companies that he thought were long-term compounders. He loved Warren Buffett and the idea of value investing. Well, fast forward to, you know, a few years ago with companies like Robin Hood and retail trading, and then just the internet broadly, more and more people have gotten into investing and the impacts on the market have been huge. And so before I worked at Code Two, I was working at Melvin Capital. And so, you know, many of you guys probably heard of Melvin as the hedge fund that was short GameStop. And so I lived through this period where we went from, at the time, probably The best performing hedge fund in the world from a return perspective, like single manager, long, short equity to basically down 50% in two weeks. And the reason was we were at the time betting against GameStop and we didn't realize like how powerful retail could be when they focus all their energy on the single stock. …

AI assessment note: “the market dynamics have, you know, very much evolved”

Q So, in terms of Cotu's fund, how big is the fund, and what's your main portfolio that you cover?

A Yeah, so the, Cotu as a, as a whole is probably, it's around sixty billion of assets under management. On the public equities, so we basically have public equities, which is around twenty-five billion, and then you've got a private's business, and then a, a credit business too. So, I focus almost all my time on the public equities. The nice part about doing both is, I also, you know, follow open AI and Anthropic and am very in tune to what's going on in the private markets. A, because a lot of those are impacting the public stocks, especially today, but also because when we're, our private teams looking at a private investment, there's a lot of times often interesting insights from the public markets. You know, my knowledge of how digital ad works might, you know, impact some business or how they think about it, you know? So I, but mainly I focus on TMT investing in the public markets, trying to find, you know, stocks that are going to go up and then trying to find stocks that are going to go down. It's internet, China internet, cloud, and then we have a pretty tight knit team. So we all, you know, we all work together, um, kind of the core group of us.

AI assessment note: “it's around sixty billion of assets under management. On the public equities”

Q Shifting into one of your other strategies. We covered investing, macro, and everything like that. But I'm really curious how you shift from investing directly into companies to incubating them. There's a couple companies that you started that start with brain. So what's the deal with these brain companies?

A I mean, um, so Ankur came up, Ankur Goyal, who's the, um, CEO and founder of Braintrust, um, came up with Braintrust, which I thought was a great name. Um, and I helped him really early get that up and running and did a lot of early customer calls. And, um, initially we talked about just doing that as like an open source project and all this stuff, and then it kind of converted into a company. So we were just doing it for fun. Um, it's like a kind of a side project. Um, and, uh, then when I helped get this other company up and running called Branko, we were just calling it Branko as a placeholder. Yeah. It wasn't meant to be the longterm name and hopefully Ankur isn't upset, you know, that we have another brain thing in the family, but, um, It was meant to be like kind of funny and quirky and it was an internal placeholder and then we're going to come up with something better and like Apple and like Stripe and a few other companies, we just could never come up with anything better. And the people who are working on it liked it. So it kind of stuck. So it was inadvertent.

AI assessment note: “we were just calling it Branko as a placeholder... it kind of stuck”

Q that, all took the stage. Yeah, one unexpected player stood out as the next breakout AGI leader. Some stats. Three hundred million plus in revenue and profitable. Two hundred and twenty-five million in funding at a last valuation of 2.2 billion. A network of four million engineers and customers that include OpenAI, NVIDIA, Anthropoc, Google, Microsoft, Meta, Salesforce, Amazon, and I'm sure a lot more. So, Jonathan, what is touring?

A So at Turing, we train superintelligence. Uh, we work with seven out of the eight, uh, Frontier Labs. Uh, we work with OpenAI, Anthropic, Meta, Google, Microsoft, Nvidia, Amazon, anybody that's building a Frontier Foundation model, we are probably working with them already. Uh, and what's happening, uh, is as these models have become smarter and smarter, the data needed to improve them has become increasingly harder to generate. Uh, the earlier era was, um, almost like, uh, commodity data labeling. That era is over. Now it's all about frontier data. These models need expert human data in every domain imaginable. They need data to train these models in reinforcement learning. And sometimes they need synthetic data. Uh, what we are doing is scaling up our data infrastructure at gigantic scale. So for these models, the cool thing is you, uh, everybody's, uh, aware of all the research breakthroughs that are needed to move these models forward, and all the labs do an amazing job at advancing the research frontier. You need tons and tons of compute, and we, we have, uh, NVIDIA, Cerebrus, uh, Grok, like all these companies to thank for that. But they need a ginormous amount of data. And what's happened, uh, Molly, is these These models ate the internet when they were pre-trained, but the internet data is used up. It was used up like three years ago, right? Where's the data going to co…

AI assessment note: “So at Turing, we train superintelligence. Uh, we work with seven out of the”

Q Because research has become such an important part of this next era of AI, it would be, it would be wrong not to bring up the fact that this is your background. So you were in research and in AI development before this. So how did that lead to founding Turing?

A Turing's founding DNA is AI research. Uh, my co-founder and I met at Stanford. I worked at the Stanford AI lab and the Stanford info lab. My co-founder worked at the Stanford NLP lab. And in an alternate universe, both of us would have gotten our PhD in computer science and AI. And Stanford, at Stanford, there's this radioactive spider that tends to bite people and makes them start companies instead. And that's what happened, happened to me and my co-founder. Um, and, uh, so we saw the power of AI early. Uh, and when Turing was started, it was all about using AI to find the world's smartest software engineers at scale. Use AI to vet them, match them to companies, use AI to manage them, right? So when, um, the AGI wave hit, uh, or I, I remember that fateful meeting with OpenAI when they were training GPT-III and OpenAI wanted to teach GPT-III to code and to do function calling and tool use, which are building blocks for training agents. It, when we saw it, it was obvious what this was going to become. Right? This was the future. And we were perfectly positioned. We had the world's largest platform of software engineers. Where we could build, ah, the ability to generate high quality data from. And it was clear that, ah, the models needed not just coding data, but data in every advanced domain in STEM, in healthcare, legal, finance, et cetera. Um, and that, ah, that really helped …

AI assessment note: “Turing's founding DNA is AI research. Uh, my co-founder and I met at Stanford.”

Q How did this happen? How did you guys raise so much capital in such a short period of time?

A So I'll say a couple of things. The round is led by Addition. All of our existing major investors are reinvesting. So Thrive, our earliest backer, Valor, who led our Series A, Altimeter, Andreessen Horowitz, Lightspeed, Allad Gill. Um, you know, a number of other firms that have been on the cap table and investing in, in every round, and then routing other, other firms to the cap table as part of the round. So Ribbit, Capital G, Bond, Spark, Gladebrook, Positive Sum, um, Uh, and Lower Carbon, Avenir, a bunch of other firms that share our kind of long-term orientation and conviction for this opportunity. Uh, what I'll say is a couple, you know, a couple more things, I guess. One is that the business momentum is, is, uh, undeniable. We're growing incredibly quickly. Uh, you know, we're adding customers on the order of 30% month for a month, doing millions of dollars a month in revenue. Um, we've got a more demand than we can serve. We've got thousands of customers on our waitlist and a, a multi-month backlog. Um, and you know, the, the business is ramping in a way where capital allows us to unlock the next phase of growth. Um, and you know, as you can see, given you're standing, uh, clearly right in front of our first factory, uh, we're making investments today that will help us scale, uh, into the future on a five and 10 year plus time horizon. So, um, you know, our business is …

AI assessment note: “business momentum is, is, uh, undeniable. We're growing incredibly quickly.”

Q worked across finance, and then you and Justin came together through his time at Anderil. Can you talk a little bit more about how you guys came together, how you got conviction on this? I know we already talked about this in our first podcast together, and you guys have a really great explanation, but could you share more about how you came together and the opportunity that you saw?

A Yeah. So, you know, I've been studying this kind of energy paradigm shift for, you know, three to four years prior. So I started my career at Blackstone, a big private equity firm in New York, and I kind of looked at opportunities in the space there. And then at Thrive, I kind of picked the thesis back up and started studying the battery value chain. And the way I would describe the paradigm shift very simply is the last five decades of energy have been defined by coal and then natural gas. And the next five decades of energy will be defined by solar and battery storage. And by the way, it has nothing to do with, you know, ESG or climate change or anything like that. It has everything to do with cost, right? So the, the lowest marginal cost way to add a watt to the grid, to add a megawatt will be solar and storage. And that kind of clicked with me in 2018, 2019 when I was at Blackstone and, and really stuck with me. And then, um, when I was at Thrive, we made, you know, large investments in SpaceX and in Anduril. And I got to, you know, see those companies from up close and it was a pattern match. It was like, oh, wow. Um, You know, what SpaceX did to aerospace, what Andrew did to defense, no one has done to energy, right? If you look at the energy industry, it is this kind of sad combination of the largest and least innovative companies in the economy. They're not engineering …

AI assessment note: “when I met Justin, I realized like, this is the person I was looking for”

Q And I'm curious who is someone that has. Shaped the way that you think as a founder?

A Honestly, um, I, I've learned more from my team, uh, than any one person outside of the business. I've learned a ton from, from, you know, my, my dad, obviously I've learned a ton from, from Josh. Uh, I've learned a ton from just, you know, admiring and kind of analyzing and observing other CEOs and founders throughout history or folks that are operating today. But the, the, the strongest learnings have come from Justin and Jared and Dana and Cole and Dino and the rest of our team here. We've got some incredibly talented operators that have Lots of experience, right? They've scaled businesses from small to big. They've worked on, you know, safety critical systems. They've run massive, you know, a hundred person teams. Um, and we're in the trenches together every day. And so the feedback loops are really tight and, you know, we're constantly, you know, I think we have a, we have a very flat culture. Like, you know, my desk looks like the intern's desk. I park with the intern parks. Like we don't have a shiny corner office thing. We're like, You know, I sit and eat the same lunch with the same people at the same picnic table in the backyard. Right. And so do all of our leaders. And so we have this very kind of like, you know, um, you know, you're out of college engineer. Uh, I say something dumb in a meeting, like that engineer calls me out and they're like, Zach, you're wrong. T…

AI assessment note: “the strongest learnings have come from Justin and Jared and Dana and Cole and Dino”

Q yield from day one. With same day and even same hour liquidity, access your funds anytime. Companies like Scale AI, DoorDash, Service Titan, HIMSS, Anthropic, Flexport, Robinhood, and Plaid trust and use bricks. Start today at brex.com slash sorcery. That's B-R-E-X dot com slash sorcery. Drones seem to be at the forefront of the sixth domain of warfare. Could you explain a little bit further your one-to-many approach to this?

A Sure. So when you look at drones, they have the advantage of coming out of what we'll call consumer electronics, and consumer electronics for years have been building around common system on a chip cores. So Qualcomm, Intel, other companies build NVIDIA, build the Jetson system. All of those chips come preloaded with all the software and the control circuits you need to build a drone or Build a robot or build an augmented reality headset. And a lot of times the chip manufacturers even give you reference designs or plans to say, well, if you don't know how to build your own drone, here's how to do it. And so that feeds basically a very simple tinker toy way of building toy, building drones or fielding and building drones. And so we see lots of different folks that are becoming to the business. You know, you see folks from China, you see folks from Iran, but you see folks like the Houthis who don't even have their own country, but they're able to participate. In this kind of warfare due to the ease of design and engineering. And then when you're talking about additive manufacturing, three D printing and these types of things, then that makes the physical container for those chips easy to build as well and easy to scale as well. So we have a problem with manufacturing speed and capacity more than like arsenal depth or how many missiles we have. It isn't how many we have today is h…

AI assessment note: “where you might have many, many small little software packages all coming and descending”

Q go public earlier on in the life cycle than other companies. Uh, it's probably one of the largest like frontier tech companies that's public. What was the decision to do that earlier on than later? Like strategically, was it financing? Cause now you get access to secondaries. Um, via public markets. What do you, how do you think about that as you build out this like really capex heavy business?

A I mean, I think that's, that's all part of the equation. So we, we were founded in 2009 and stayed very small for a long time, really understanding the fundamentals, the foundational pieces of that technology, understanding what needed to be invented, um, what worked, what didn't. And, uh, it was, it was in 20, kind of 2019, 20, 20, they closed in 2020. We raised the first big round. It was a series C. That Toyota led. So Toyota came in early as a, uh, as an investor from one of their venture arms, and then, uh, and then came in as an, it led the series C, which is between four and five hundred million, um, that we, that we raised. But we realized that this is a very capital intensive business, and especially with a vertical integrated model, we don't just vertically integrate down into building and designing, building, and testing all of the components that go into the vehicle platform. We're actually vertically integrating up as well. I like to think of it as, so we're vertically integrating to the customers. So we're actually designing and building the software that then takes that, that vehicle, the, the, the aircraft and lets you book it on demand, um, either through the app that we're developing or through one of our partners. So we're partnered commercially with Uber and with Delta, um, for example, to, uh, to be able to, to integrate our service seamlessly into these di…

AI assessment note: “we realized that this is a very capital intensive business... took advantage of an opportunity”

Q It's really fun. Let's be honest. It's fun. I want to talk more about the consumer experience because it is, it's a delightful thing. We've been wanting flying cars for a while. I don't, I don't think helicopters are flying cars, but I think this is more akin to a flying car. So could you explain more of like what that experience will be like to the consumer?

A Absolutely. So, so fundamentally, um, uh, you're going to open up an app on your phone. Maybe it's Joby app, maybe it's Uber, um, our rideship partner and, and you'll, you know, select where you want to go. Just like today, you open up Uber and you say, I want to go to, you know, the airport or I want to go to, to downtown or something. And the, in the Joby app, the only option will be Joby, but, um, in the, in the, in the Uber app, so you'll, you'll be able to kind of, you know, choose like the Joby option, which is going to be faster than any other way to go. And, um, And so then the reason why we're integrating, uh, and have partners, uh, a partner like Uber for, for ride share is that, you know, typically people won't be right next to where, uh, one of these aircraft can take off and land. Um, so we think of it as vertiports or skyports like to call them. And, um, and so, you know, depending on where you are, you know, a car will come and get you, um, just like a car picks you up today. If you're just going to ride in a car all the way, but instead of taking it to your destination and maybe sitting in an hour or two of traffic or something, depending on where you're going, it'll just take you a few minutes to the nearest, uh, vertiport. And then what we're doing is building the backend technology that we can have multiple people kind of meeting just in time essentially at t…

AI assessment note: “fundamentally, um, uh, you're going to open up an app on your phone.”

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A Dirac is a company driving America towards context-aware production planning. It's a new, new one-liner I'm going with, uh, lately. We at Dirac have built, uh, actually, let me, I can give a little bit of background about myself just for a little context. So, um, my background's originally in electrical engineering and robotics. Spent a little bit of time over at Northrop Grumman, you know, did a little bit of electrical engineering work, some mechanical engineering work, a little bit of technician work, and just got to see how unfortunately archaic all of the infrastructure was in the manufacturing side of things. I want to just do something about it, right? I was starting to get the feeling that the West was forgetting how to build great things, and I want to make sure that didn't happen. And so, uh, Dirac, uh, at, at our company, we're building what we call the first automated work instruction platform. So we'll take a CAD file or a three D model of an assembly as an input, figure out the assembly sequence automatically, and then automatically generate 80, 90% of the assembly instructions for that system that we're trying to assemble. Um, you can sort of liken it to, you ever build IKEA furniture? You know, a little paper instruction book tells you how to build the thing. Imagine that, but instead of being like paper, which is what we actually have today in like most manufac…

AI assessment note: “we're building what we call the first automated work instruction platform.”

Q How are business models different in this era versus the SaaS era?

A So I would say at the applications and at the teammates layer, SAS took us from the era of perpetual license, which was enterprise software to subscription, where you charge per user per month. Now we are moving into an era of consumption based pricing or outcome based pricing. I don't pay you per month. I pay you for what I use. And that's where this era is going, where I don't charge per user per month. I charge for the activity I do for you. I charge for the task I complete for you. So that's where the business model is changing. And that's a very important component of these AI native companies. They have to move from subscription to consumption based pricing models.

AI assessment note: “Now we are moving into an era of consumption based pricing or outcome based pricing.”

Q Let's talk about Kaz. So how did you decide this is who we need a CEO?

A Well, we needed someone with product innovation ability. So he's not only, he was not only serving as a COO of Shopify, but he also ran the product team. So he needed someone to understand how they innovate a product. Opendoor has an innovative product five, maybe longer years. Uh, so someone who has that muscle and steroids, but the most importantly, he's both bold and ambitious. But very disciplined and rigorous and analytical. And that's a rare combination. A company like Opendoor needs to be rigorous and analytical, but it can't sacrifice the ambition and the boldness and the willingness to do things and push the envelope and creativity and innovate. And so that was what was very appealing. And then the company at a kind of tactical level just has too much of a bloated GNA. It's always had too much of a GNA that was Way out of control, uh, since 2015. We need to fix that. There's 1400 employees. There should be like more like 200 or 300 max, and one of the things he did at Shopify when he got promoted to be COO was cut their GNA as a fraction of revenue from 14% to four percent, and I think they're on target next year to be at one percent. So, it's even more important for a non-software based business to have a GNA that's In line with the cost structure that's in line with the cycles that real estate always goes through. Every decade, residential, commercial real estate goe…

AI assessment note: “we needed someone with product innovation ability. So he's not only, he was not only”

Q So in terms of all this, all right. So let's talk about open door. In general, macro. How did we get here with Opendoor? You mentioned back in 2015, things started to go south?

A No, no, no. The company did really well. You know, we were almost, we were just, I think we hit twenty billion as a market cap company for at least a day or two. Um, minted money. We were actually free cash flow. We were between, we were minting five hundred million to a billion dollars of free cash flow, um, when we were public. We went public in, uh, 2020, late 20 20, uh, and company's doing really well, but The company did not build the foundation correctly so that when interest rates rose, and the Fed raised interest rates six times in a very compressed period of time, unprecedented compression of time. When interest rates rose, the company's cost structure was inappropriate for the amount of transactions that were going to occur in the United States. In a peak United States housing market, six million Americans buy a home, and in a bad market, Four million do. So it's a pretty big way, a pretty big variability there. So you need to be able to be profitable or break even in a market when only four million Americans transact. Opendoor is currently a transactional business, so we get paid when we buy and sell. And so if less people, like, 50% less are buying and selling, all of a sudden, your costs are out of whack. But the reason why I mentioned in 2015 is Vinod Coastal, my partner warned us about this. I remember a meeting, a review we did, Eric and I did, Uh, with Vinod an…

AI assessment note: “The company did not build the foundation correctly so that when interest rates rose”