So my new product that I'm going to take years to develop, I
might be able to sell to an existing customer for less.
That's a bitter pill, Swallow. Trivialize humans by saying
you're just an NPC. Now we're going to have agentic
NPCS that are. Very flush.
Send our digital twins over to to Yankee Stadium and send us
pictures like so. You could be social evil when
you're working. Today on the Newcomer podcast,
an old friend, Rick Heitzman, one of New York's most iconic
venture capitalists. He Co founded first Mark Capital
back in 2008 when betting on New York as a tech hub felt like a
contrarian take. He's invested in a lot of
companies, you know, love or maybe hey, Pinterest, Airbnb,
Riot Games, DraftKings and Discord.
So he's going to help us make sense of what could be MW IP OS
coming later this year with SpaceX, open AI and potentially
anthropic. This episode is all business
seed rounds, valuations, IP OS, what's not to love?
Here's the episode. Rick Heisman, thanks for joining
the Newcomer Podcast. It's awesome man.
Be good to be here. I only have been on in a long,
long time, so it's great to be back.
We've known each other for a long time, so it's fantastic.
Great to do it in person. I'm excited about this
conversation. You know, if you've been
watching the channel, we've veered into the political This,
this is business. If there ever was business, I
like talking to you because you're a startup guy.
You invest in early stage startups, but you're also in New
York. You talk to the bankers.
You have a sense of the capital markets and how startups
eventually go public. I feel like there are a lot of
financial people who want one or the other and it's hard to find
both so great. Way to talk to you.
It's good to be like that, man. You know, we, we think about it
in the power law companies, right?
The companies that generate most of our returns usually generate
those in the public markets. So you have to be public market
aware to really understand where your returns are coming from.
And as much as VCs like to be, you know, pickers where they
like to be style makers, they like to be podcasters, you know,
we view our job as being asset managers who actually have to
think about not only buying but also selling security.
You have to get the time in, right.
I think that's sort of something right In and out yes, so 2026
could be an insane year for public investors and getting
access to tech stocks. You know SpaceX, the now sort of
ultra merged Elon company should could go public open AI could go
public. Obviously we've just gone to to
war in Iran like and you know, as you mentioned to me, bankers
don't love wars. Companies don't love wars.
They want I'm. Not sure who loves wars.
Right. Exactly.
Nobody does. So yeah.
Do you think those IPOs are likely to happen this?
Year, I think they're so likely to happen.
You know, as we know the world shifts very quickly.
So so there's probably two things I think you alluded to
the market hates uncertainty and you know what are the most
uncertain companies previously private companies are getting
ready to go public. What else creates uncertainty?
Uncertain regulatory environments, things like
tariffs and things like an uncertain presidency.
And then what else creates uncertainty?
Wars, you know, unstable macroeconomic times, very
volatile currencies. So this is not a great time for
IPOs. I don't know if anyone would
anticipated this war. I don't know if anyone would
anticipated, you know, these changes with the Supreme Court
and tariffs or all these things. But I think people were feeling
good about an IPO market. And then there's probably going
to be one of two things. And I think we talked a little
bit about this sooner. Could smaller companies slide in
and you know, say, hey, here are interesting companies, might be
great companies. You know, these are founders who
worked very hard for a decade or more building a couple $100
million company, even a billion dollar company that could go
public and maybe Q2 after they do their annual audit.
And then what does it mean for these mega companies?
They're going to raise $50 billion plus.
So you talked about open AI and thropic maybe Stripe depending
on where they wind up and obviously SpaceX that they will
have such gravity. Rank Make your prediction on the
most likely to least likely of of.
Those I think SpaceX is definitely is going to go.
It needs it. Or I think it probably needs at
least because I think it's less capital consumptive than maybe
some of the other ones. I would say, you know, if I
would, if I was picking a bit ago, I, I, you know, now that
this is this mega Elon company, mega Elon company probably does
need some capital, especially if they're going to be providing
Internet from space and doing all kinds of different stuff.
That's still a bit unclear. But you know, the main the main
thing that's going to drive that IPO is going to be Elon and but
you know, open AI seems like the company that needs to go public
just talking about how much. Money it wants to spend so.
Yeah, just just raise more money in the private markets and
probably for the first time in, in, you know, in history or my
history, and I go back in the markets to the 90s, that
companies are going to run out of private capital.
I mean, SpaceX open AI have accessed every bucket, every
pocket, every sofa cushion of private capital and they're
about done. And, and if there was any more
money to come, it would be sovereign wealth.
And that, you know, the Middle East is not tied up.
Yes, they have. They have their they have their
other problems and the and the world's more uncertain.
And it seems like I, I, I don't know if you scrutinize it, but
the reporting the Amazon investment in Open AI seemed
like there was some potential IPO.
Yeah, there's there's some stuff like it'll be interesting in the
S ones to actually read the details.
Definitely if you think about everything from what is that,
what does that mean? What are some of the NVIDIA
deals mean? What does you know, what do some
of the private credit things people have done off balance
sheet? You know, there's one reported
at X dot AI where they did a massive private credit deal to
buy in video, which video also participated in equity.
So the disclosure around them will keep you busy for weeks.
Definitely. So SpaceX number one, open AI
#2. Open AI #2 Anthropic, you know,
you know, Dario famously says. You know, I don't know, maybe
next year I'm out of money, or maybe next year I'm a trillion
dollar company. I don't think he's going to be
out of money, but I think that they're probably #3.
Venture capitalists are very excited about that.
I mean obviously VCC only. Have So we've never seen a
company scale like this, right? Some of these companies have
scaled like things we've never seen before.
The consumer adoption of open AI is amazing, just the revenue
scale of Anthropics amazing. And then the market power of
Anthropics really amazing if you know, they just can announce a
I've never seen a private company just kind of announce a
product and crash a whole public sector.
And that's just going to be really interesting to see.
And you know, it's aside from a centrini of just being able to
say, you know, Anthropic got into security and that sectors
down 10 plus. And you know, you know, just
well, we're giving commentary on anthropic.
You know, once it's Simo. This fight with the Defense
Department was terrible. On the other hand, anthropic so
weak with consumers. If every you know, Lib mom is
about to go get and clawed. It seems like they're getting
huge download numbers. So it could.
Yes, there's like consumer, you don't know what it what that
means. And then you also don't know how
this changes, right. I mean, I think, you know, the
current administration has had back and forth with every single
company where they've been on the naughty list and I'm on the
nice list. All of a sudden the government
winds up in 10% and everything and everyone's off to the races.
And that could be prediction markets where chip companies?
Well, in your portfolio, probably the buzziest is Discord
that has had some reporting around there.
There are some others that are sort of in the mix that could
potentially go. And I think that everybody's
kind of waiting. You know, there's this weird
time in the market now where everyone has to finish their
audit and that kind of will probably take another couple
weeks if you're on an annual cycle.
Certain SAS companies are on a January fiscal year end.
So that takes time. So it's traditionally Q2 is a
time companies will get ready to go.
And I think you saw probably as good as a backlog as you've seen
in years that you know, it was, it was as bad of a time as
you've seen in years between 2223 and 24.
The market started to open up a little bit across the board,
right? We saw some crypto IP OS, we saw
fintech IP OS, we saw traditional SAS IP OS with
things like Figma. And now people thought, hey,
it's going to be open and it's going to be open for companies
of all types, both sectors wise and size wise.
And now all this uncertainty is, is, is kind of hitting a pause
button. And there's, there's probably 2
uncertainties that people are thinking about. 1 is macro
uncertainty, war, trade, regulatory.
And then what's going to be the gravity that these mega guys
have? And even if you're doing a
billion dollars in revenue, you're profitable, you're
growing well, no one care because everyone's just staring
at SpaceX open eye anthropic and trying to figure out both and I
would also in. Terms of like the retail story
or? I mean, even, yeah, I've heard
from some companies the it's, you know, getting banker
interest because bankers are like, oh, if I could raise 50
billion from Anthropic, this is going to be a huge year for me,
for my firm. So I got to stay close to
Anthropic. I'm not going to be bothered
with a, which was sort of a great IPO, $500 million IPO.
If I could just be part of that syndicate.
I need to focus on, you know, where the money is.
Say this is a thought exercise like say SpaceX or Anthropic did
their last fundraise on the public markets versus the
private. Do you have an intuition of
where they would have gotten a better price?
Like they stay public, they use capital scarce, they leave room
for sort of the growth in valuations or or do you think
you know, in some ways the private markets have become more
bullish than the public? Market, it's it's the age-old
question. I mean if you look at the
secondary markets, it definitely depends on buzz.
So we have companies in our portfolio so that we we keep an
eye on those very increasingly liquid secondary markets for
probably the first top 20 or so positions we just named about
you know, five or seven of them. There's probably another 15
companies that we can rattle off that have liquid enough markets
that the trading price matters. The buzziest ones traded a
premium to last round. The ones who are not as buzzy
traded discount. And you think?
That tracks with the public market and that I.
Think that that's a better predictor of public markets than
anything else. And you know, historically you
and it's also because they raised so much money and those
syndicates are so broad, tending to be with crossover investors,
right? So if you see a a Bailey
Gifford, a Fidelity, a Black Rock investing in a big private
round, they're kind of pricing it like an IPOI mean that whole
part of the market has been somewhat wiped out of small cap
tech investing. And that used to be, used to be
going back to the 90s, there used to become like a $300
million market cap where you'd be, you have a whole sector of
people that would follow it from 300 to 3 billion.
And it was somewhat inefficient part of the market, really good
part of the market that billions of dollars were invested in.
And that just doesn't exist. So you you predicted SpaceX
opener would probably still go what any other predictions about
what you think happens the anthropic?
Goes, I think, I think, I think Stripe waits till next year.
Stripe. Never wants to go public.
I don't. Think Stripe ever wants to go
public? They have a great business.
They're able to, you know, the things that they need to do of
raising capital and providing early employees and investors
liquidity. I I'd heard.
Chatter that thrive was sort of signaling to people you should
never go public like we'll find we'll do vehicles and there's
this argument that there's this sort of private investor class
that has an incentive It's like if I'm going to get exclusive
access, you don't need to get scrutinized on the public
markets. I'll price you, you know well, I
don't know what what do you make of does Stripe ever need to go
public it. Doesn't it?
Doesn't because they're getting the benefits of being in the
public market of liquidity and capital.
Is there some other reason that they need a depth of capital
they can't get in the private markets?
As the private markets have evolved, there's a tremendous
depth of capital. Like, you know, 20 years ago you
weren't seeing sovereigns, you weren't seeing large
institutional LP's who are Co investing in these large rounds.
And it's two things. It's companies are wanting to
stay private longer. What you're seeing is bigger
outcomes in when the companies do go public.
So the venture capitalists who stick with them are being
rewarded tremendously. And then you're seeing an
absence of, you know, whether institutions or public market
investors being able to participate in the small cap
tech, They're going back to the private markets.
So the venture capital entries totally subsumed that whole
sector. And they've done it kind of
somewhat slowly and quietly and maybe, you know, at least and we
have a growth fund unintentionally and, but I think
you're seeing great value creation there.
And I think the LP's in the and the institutional community is
saying, hey, if I want access to the best companies, I have to
get it through the best venture capitalists all.
Right we have to talk SAS apocalypse yes are you in the
abstract sort of buyer seller of figma like what what's your to
pull one or you know yeah I. Know, I know.
I know a little bit about Figma. I know they put up great
numbers, right, 136% net dollar retention, yeah.
You got more numbers on it than I do off the top of my.
Head yeah, they grew about, they grew about 40%.
So they're they're back to being a rule of 40 company.
You know, they've gotten beaten up in the public markets.
I think they're down about 70%, you know, depending on the day
this comes out. So that's a very, very good
company. You know, probably the best SAS
software company to a public last year, maybe the one of the
best companies the last couple of years, excellent CEO and
transitioning into AI. So I haven't followed the story
completely, but I followed it through the IPO and they had a
whole interview strategy at one of our.
Events last year, the CEO. Yeah, yeah.
And they have, you know, they're responding to the vibe coding
thesis. Yeah, they're really trying to
follow the person is trying. To evolve that, I mean they're,
they're competing on the edge with, you know, the replets, the
replets and Lovables over here, obviously competing a little bit
with Adobe on the collaboration side across SAS, you know, they,
they have a pretty big market space.
So I think that, you know, like a lot of other things, if you
have a big market, you have an excellent CEO, hopefully when
somebody else throws the baby out with the bathwater, that's a
good opportunity. I think some companies, and it's
no different than how we think about SAS and software investing
today, that you have to be two things.
You can't just be workflow because that's being
commoditized incredibly quickly by companies that could do that.
So you need to have some sense of a network effect and
collaboration. And then the most important
thing is having access to proprietary data, right?
So data is the oxygen for AI. It's also the Mouten AI.
So if you're either building horizontal or vertical software,
how do you have access to that data?
Because that's what's going to enable you to compound that
competitive advantage grow over time.
Your, your. Answer on figment.
Not that it's more of an example than anything, but if answer on.
Figment is is people have blanketly said SAS is dead, Some
SAS companies are dead. I think Figma is a very good
company which is not dead right you buy.
Into the somewhat the move against SAS, but you think there
are companies that will sort of yeah.
I think there's some SAS companies, especially companies
that haven't evolved and developed and you know, there's,
I don't want to name them, but you know, the companies that
maybe even gotten taken private by private equity companies who
then cut R&D, tried to milk that, that user base.
That user base is probably tired of getting milked that there's a
new AI forward company that provides a lot more value at
probably a similar cost that they're going to be, they're
going to be taken out and you know those companies then as you
start to unwind those companies then especially the ones that
are burdened with debt you can't reinvest, I agree with you on.
Sort of the private equity company that sort of allowed
their customers to hate them and now the customers have a tool to
say, oh, we we can do that. We can build custom much more
easily than we could before. You're extracting everything
from us we don't want. But what about like a sales
force? I mean, it's interesting there
because you know on sales force was on the come up in some ways
it could have been presented as a Oracle versus Salesforce
story, but Oracle has also done tremendously well since the rise
of Salesforce. So that's been sort of a
response like why does software necessarily need to get
decimated just because there's a new generation of company and
it's. Not like they're sitting on
their hands, right? Salesforce just yesterday bought
one of our company's momentum that is Fury AI Ford.
And you know, they have obviously amazing distribution.
If they can buy great products to plug into that distribution.
That's kind of how Salesforce has grown over the last 25
years. And so now that they have that
great distribution, are they being thoughtful and careful
about what products they build by and partner with to drive out
there? I don't know enough about
Salesforce to see how they're competing across each of those
things because Salesforce does so many things today.
But I know they're not, you know, thinking, you know, I know
they're not crying in their beer.
I know that they're being aggressive and being out there
and getting stuff done right. They're.
Very loud on agents and embracing the change.
On the other hand, it does sort of have some of the workflow
like a lot of their strength is you're doing sales, we do sales
like well, hey, you're doing. Sales, can you put this in this
other database and should you send that person an e-mail who
might buy something from you that could be agentic?
But and then the problem a little bit of the problem with
the public markets is can you slow down to speed up?
And will the public markets give you that grace to say, hey, I'm
going to need to disrupt myself. I'm going to need to cannibalize
myself either on pricing or on product.
And you know, that'll be the best thing for me in the long
term. I think the best CEOs get that
grace. I think, you know, Benioff
probably is that, you know, you'll, you'll obviously see
Elon who's done some things like that, that you're going to be
able to do that. And then it's going to be the
expectations in the public markets, a key thing being
pricing. And historically, you know, Sass
is priced on a seat basis. Well, there's a lot less seats,
right? People think there's going to be
a lot less seats and hard. To a complicated transition to
make. If you have to swap your
business model, take risk, especially on the public
markets, yeah. I I have to reinvent myself.
I sell a new product to an existing customer that I'm going
to charge less for and they're going to want to buy less seats,
even if they they live with that seat based model.
So my new product that I'm going to take years to develop, I
might be able to sell to an existing customer for less.
That's a bitter pill, Swallow. Changing gears to another
important topic, what do you make of the block layoff, You
know 40% of their employees, is that specific to block or you
think more to come? I think that's.
Going to be a trend. I mean Shopify famously has been
able to grow revenue over the last couple years. 70% will
keeping the employee base constant.
You know, there's two things that are happening there.
I think people grew very inefficiently during COVID.
And this might be the last piece of saying, all right, let's
reset ourselves. How many people do we need,
especially if we're here in person and we're able to act
more efficiently. All right, that might be how did
we look at the end of 2019 and how were we able to generate
efficiency then? And then on top of it, where can
we add agents? So I don't know many companies
who have done that analysis incredibly well.
You know, obviously companies on the board of that are smaller,
easier, more centralized through doing less things.
It's easier. But you think it's more over
hiring than agents creating value today, I think.
It's less focus on efficiency in the near term and then more
agents over time. So if you know, block takes out
40% of their employee base, that employee base might not grow
that much, right? They have the.
Confidence is sort of what they're trying to lean into in
terms of exactly new capacity is and you know.
Famously, X, you know, not only do they take out a whole bunch
of people, but they didn't grow that employee base.
Yeah. X will be fascinating what we
unfortunately, how much. Is we will never.
Necessarily know how well he did with that whole deal or not I I
can't imagine SpaceX really has to get granular about the
performance it'll. Be interesting.
It'll be interesting to see. I mean, they'll probably have to
report revenue numbers. Maybe that's about it.
I don't, I don't, I don't. I'm not a thank God, I'm not a
security player. What in terms of sort of the AI
deal making? Yes, it's been happening.
I know you have some point a point of view on that like what
I don't know, revenue round tripping I guess is the most
like charged way to put it. But like to what extent do you
think these deals, you know, including like now with Amazon
wanting opening out how to use Tanium chips are I pay you to
spend money with me? Yeah.
And then? There's some of the some of it's
off balance sheet with private credit that I'll give you some
equity, you'll agree to buy my stuff.
We're also going to put this private credit thing that's off
balance sheet we somewhat opaque that you know, opacity has never
been proven to be good for shareholders, right?
And transparency is the key thing to if you're not really
transparent and straightforward about something, what are you
trying to hide and why? And it's not because it's so
awesome that, you know, you want to hide it from the public.
So I think that's going to be a case, you know, just the, I
think the. Thirst.
For AI will let this go longer, right?
So everything, every new technology that was incredibly
CapEx intensive crash, right, whether that was the railroads
or television or fiber and the Internet at some point.
I will overextend at some time. What we're saying, because
there's no one ever says, maybe I'm maybe I'm OK, maybe I don't
need dessert tonight. Everyone's like ice cream and
all some gummy bears and hot fudge and, and you continue to
get rewarded right As the hyperscalers have said, I'm
doubling down on AI. I'm spending more stock prices
gone up. So not only is there an ego
thing of like, hey, I'm looking next to me and I got to keep
spending and keep up with my my fellow hyperscaler CEOs.
My stock price will go up when I do.
That my stock price goes up and I remember going back to the old
infrastructure Celex in the early days of building out
software that they, they came up with a a metric of you got
valued at 7 times whatever CapEx you put in the ground and that
became a a metric for next generation telco companies and
Internet providers in 2000. So you know what what's the
incentive there? You'll you will put as much as
you can in the ground and it's insane in.
Retrospect to think Internet providers were, once, you know,
obscenely valuable well. In in that every dollar, I mean,
once that metric came out that every dollar you spent, he was
worth $7.00. Your only incentive is just to
spend as much as you can as quickly as you can by getting
dollars, however you can get them.
And I'm not sure we're at that point now.
I think you're still seeing GPUs be somewhat.
There's no dark GPUs, there's no dark data centers.
What do you mean? By that, so there's.
Not being used in the, in the fight when people were laying
fire, they were, they called it, you know, 1% was dark, they
wasn't being used. We haven't lit that up yet.
And therefore we're building things for tomorrow.
And don't worry, the customers will come, because right now
NVIDIA. Has been great about projecting.
There's more demand, Yeah. We could seemingly set whatever
price we want exactly. So they said, you know, in that,
in that, in that analogy, the dark fiber people were
overbuilding, saying eventually the customers would come and
they did. It was just five years too late
and all the companies went bankrupt.
In this case, they are saying as many chips as I could produce,
someone's buying them and actually I can charge whatever
and there's a line outside the door.
You know, they're also investing in companies to buy their chips
and round tripping it. So you don't know what real
demand is, but until you see a little bit of of stopping a real
demand and some of that demand being driven by, you know,
consumers, some of enterprises, maybe a lot of that demand being
driven by fear in both enterprises and hyperscalers,
it's not going to stop anytime soon.
But you think it has. Another year or two years I
just. Think that given how we're
seeing some of these companies scale, given the fact that the
capital markets seem wildly open for them even, you know, as open
AI has hit some choppy waters and still continue to raise a
lot of money at very high prices open.
AI in particular is insane because it is still a nonprofit.
Obviously they resolve some of this, but.
They're structure court. There's so many.
That'll be interesting. We know they're interesting
disclosure when they go to court, I think later this year,
right, Right. They're yeah.
They're in a big legal battle with Elon.
You know, it's just, yeah, you can see, you know how Anthropic
is a less complicated company to invest in, where they're selling
to businesses, they're more eager to be profitable.
Whereas open AI, it's like weird structure, all the legacy
problems of being a yeah, they, they, they.
Have they have some consumer facing stuff?
They have some agentic stuff, they have some infrastructure
stuff. They're going to get into
specific agents. Are they going to?
You don't have a bet, right? You're disinterested.
In either of those and then, you know, how does that stack of,
hey, there's going to be consumer agents.
Some of those consumer agents are going to be shopping.
Well, they don't have a commerce.
They have a commerce strategy, but they don't have commerce
revenue. They have an ad strategy.
They're just getting into ad revenue.
You know, they're going to do specific roles for you.
They'll they're going to be involved in healthcare.
No one's quite sure exactly what that means.
Are they going to be your payment agent?
Are they going to be your, your healthcare coach?
Are they going to be your doctor in your pocket?
And then you're like, wow, these guys are kind of trying to do
everything, which was, you know, why I submitted the code red a
couple months ago. It's like, hey, we're doing
everything and we can't win a we can't fight a battle on every
front. I mean, I I wrote a piece of
being bearish at 157 billion, which seems clearly wrong.
Now I'm. Sure, you're going to edit that
out. No, I'm still bringing it up.
I can't help myself, you know, I wear my, my mistakes on my
sleeve. I mean, it's just very hard to
call, you know, pricing tops in new markets.
I mean, I remember when Silicon Valley was super divided by Uber
at 3 billion and thinking that was, you know, so far ahead.
So it's, it's really hard to know, you know, we will
overextend given the nature of how these will go.
But then you, you, you know the markets could the I forget it
was just Druckenmiller or or Julian Robertson.
The markets can remain irrational longer than you can
remain liquid. So betting against a market,
especially a runaway train market like this is, is, is
really, really hard, which is as in the, in the venture markets,
how do you kind of, you know, don't get irrationally excited
about it. Stay close to your knitting,
continue to invest in the in the strategy that you've committed
to yourself, your LP's, your partners about and continue to
do good deals in that space and good things happen.
What, how are you playing on the private markets right now or
where do you see investable opportunities in AI so?
We, we see really three different things.
We've begun to see consumer AI experiences and actually, and we
do a lot on the consumer side and even as people have
abandoned consumer, you did riot.
Games you did, riot. Games.
Yes, we're the seed investor in Riot and they've gone on to be
the biggest video game in the world over the last 20 years.
So you know, gaming is really interesting that non player
characters can be agents and therefore it makes a game more
fun assets and games can be created much more cheaply.
So we we've looked at a lot of things there.
We've looked at things of you know what are next generation
social networks and social constructs company called people
that does you can have a digital twin who exists out in the world
as an agent for you. You can have a digital friend,
you can have a digital pet. And what does that mean as these
these other things that are out there in the world, whether
you're pet or digital twin, are now interacting with yours.
So like, hey, digital Rick, go go digital Eric and go get an
ice cream cone at the Yankees game and then send us pictures.
And that's I can't claim to. Understand what's the appeal or
what's the it's no. Different than the Roblox of
you, you're you're basically able to have something else that
extends your social experience and But no, we were.
Hanging out, I guess we're friends now, you know, it's like
we've done that. We outsourced them in school.
We were working, we were doing a podcast, send our digital twins
over to to Yankee Stadium and send us pictures like so you
could be social evil when you're working.
But don't I? What I want from being social is
primarily like the experience, right?
You're getting old, man. I want the networking of it or
like the. Or you want you want the
experience or do you? You know, there's obviously a
whole generation's growing up that want the the likes and the
friends and you want the. Sort of saturation like.
Hey, look at look at little you're like Instagram if we're.
If we're going to the aquarium performatively on Instagram,
like why go at all just like have the yeah if you.
And if you could get likes, thumbs up points for for having
a very cool picture of little Rick and little Eric at the
Yankees game, that's just another way you could do things
when you don't have to do anything.
It's an accelerationist. View of getting rid of
Instagram. Yeah.
Well, I think yeah. I think there's going to be
agents or it's not just a flat photo that, you know, you're
hoping because you put a good filter on that people will like
you have people doing things for you.
So you know, whether it's the dating market, the social media
market, the gaming market, the commerce market, we do have done
a lot in digital health on the consumer side, which we think is
going to be transformed because Healthcare is so broken, you
know, better, you know, AI could definitely make that better,
faster and cheaper. And then on the enterprise side,
you know, we have two sides. We got, you know, call it, you
know, application layer enterprise AI that we talked a
little bit about having data and proprietary data and proprietary
access to data and the ability to use that data in to create
new applications, new enchanted applications.
We're also seeing companies like crisp who create inter
enterprise applications. So think about supply chain.
If I'm able to have an agent, if I'm able to have my data and
your data, you know, I'm Mandalay is your Walmart, you
know, somebody else's unify, which is, you know, the
logistics company. How do I understand how that
works and then be able to put intelligence on top of a multi
hop data system And you think about the lock in of that if
you're across enterprise and the data network effects which would
exist and why that's really important.
And then even, you know, the third bucket might be on the
infrastructure side. You know, a lot of Fortune 500
companies are still trying to pull data out.
You know, a lot of these companies have grown through
acquisition. They have a spaghetti of all
kinds of different databases, software, languages, all that
stuff. And they're just trying to
unlock that data. And there's a whole generation
of companies that are doing that.
And then what happens when you unlock the data?
Holy shit, you know, is that secure?
And who gets access to that? You know, so I, I've, now I have
this data, who's getting access, the agents getting access to
that. How long does the agents have
it? So if the agents has access to
your credit card and financial information all the time, well,
what is that agent doing? What is is that what does?
What are they gonna do and why? I'm very.
Interested in what company is actually willing to play
gatekeeper for agents spending your money right.
It's like, is it the actual application?
You know, you can see existing, you know, like a, a Plaid or
something. But it doesn't seem like a a lot
of companies I think are wary about signing up to be the one
that says yes, this is safe to let your agent go.
Spend or what does that and where does that data go?
Even if it's just your bank account number, like, oh, you
could go, you could go buy me that sweater, but you know that
would. So what's that agent give that
bank account to another agent who gives it to another agent?
And what does that mean? And, or if it's, you know, even
worse Social Security number, which you can't just cancel and
get another one tomorrow, you know, how does that how does
that data exist, whether it's payroll data.
So we think about that we've had.
Space. Yes, we have a.
Couple different things around that we have Daytona which which
does sandboxes around agents to keep them more secure and
running specific things. We have LM Studios, which
manages data around this problem and we're looking at a lot of
things because you know, the one of the best and worst things
about agents is they're always working, right?
So they're always working. I know we're.
Going to I feel like they're hope.
They're doing good stuff, but if they're doing bad stuff, they
could really. A new anxiety we're inventing
right now is this sort of when you wake up, you have to see
what your agent did. It's like, have I been
productive overnight? You know, did I set everything
up so that, you know, the night time agent work was super useful
and I have stuff to do today so or did they?
Get. Or did they, you know, take my
credit card on a Shopping Express shopping spree with
little Eric at the Yankees game? What?
I mean games, games and consumers obviously the most
fun. And what what in gaming in
particular, are you optimistic? Better.
Have you made any bets yet? Not?
Recently we we looked at some stuff in terms of content
creation with some stuff in terms of pure content creation.
So if I wanted to play you in a game, we can create a much
better game than we ever could of right.
So there's kind of next generation unities, which is
great game creation. Game engines, you know, game
engines are able to leverage, you know, existing IP and they
work with companies like Disney or Epic, they leverage existing
IP. So that game creation is going
to be easier or no different than it's just easier to create
applications or anything else like that today.
So we've looked at those things. It's hard to create a lot of
long term competitive differentiation.
So there's a lot of these companies are doing it.
They're all creating a lot of value, but it's hard to say
where they're creating a long term competitive
differentiation. So we haven't done anything
there. We've companies that are
creating really good at gentic non player characters, right.
So NPCS is you know the the term for them.
They used to be had an NPC. It was like, it was like, I know
well. NPC We trivialize humans by
saying you're just an NPC. Exactly.
Now we're going to have a gentic NPCS that are like, oh, it's.
Very fully fleshed, you know, So, you know, those were like
the stormtroopers. You're going to go straight
ahead and you're just going to shoot them.
And now these NPCS are going to be smarter, and there's people
who are making smarter NPCS, and that's kind of interesting.
But again, there was lack of differentiation.
You know what we're really probably most excited about on
the game side because I think that more people are playing
more games and maybe even some AI will let people work less and
therefore play even more games. And we both love playing games
is the opportunity to create, you know, independent studios,
right? So Riot despite being enormous
today was independent studio who said, you know, we were able to
bring League of Legends to market for about $6.7 million,
which you would just. Bet on a game, so I think.
There's going to be small teams of game studios who have
different play patterns. We've looked at things around
audio being a really interesting thing because the ability to use
AI to ingest audio and come back with audio.
So are there audio formats which are really interesting and
different? Are there interfaces that are
different? You know, looked at a company
that does kind of audio formats on TV.
So can you play? Yes, there are.
Some of my best friends, I host events with them, so I know them
very well. Yeah, there's a.
Couple yeah, really good. That's you know, and you know,
so are there different ways that hopefully I'll meet somebody
that'll say, you know what we thought about all these things
and we believe believe with like a handful of people, we can come
up with a game. They'll be completely different.
It'll be audio or voice driven and it'll be super cool and fun.
It'll be and we'll pull into all these things.
We'll be social, you know, they'll have a chantic NPCS and
they'll do all these things. But you know, we often times we
spend a long time looking for looking at mega trends and
figuring out what's going to be it.
And then you have to find that special entrepreneur the way
Brandon Beck and Mark Merrill were at Riot, who were like, ah,
you're actually saying what I've been trying to articulate for
years. This is an old one and we don't
need to spend a lot of time on it, but the whole like Major
League Gaming, like the did you guys made a play in that world?
We didn't. There was I.
Wrote about it and I got excited.
Founders Fund? Didn't they even make a play
like this? Sort of?
And obviously, you know, Activision went big on having
more. Broader E sports, E sports.
So there was a whole bunch of things in E sports, a whole
bunch of So there was teams, there was leagues, there's some
other things died. Right, like has that.
It's not. Happened well, if not the.
Pandemic when right it well. It died a little bit.
There's two reasons I think it died that different than like
Major League Baseball or the NFL.
The a lot of the rights and the IP was so controlled by the
games, by the games and the developer publishers that you
really were just playing someone else's game and he had less
control. And then they sort of.
Because then they got built sort of as marketing for the game,
but then because it wasn't a real business, they didn't have
to set it up in a way. And you can.
Only play in the in certain places and then therefore the
rules were very much dictated by that in the there was some very
big companies. 100 Thieves is still a really good company
growing that space 9 liquid. There was there was a lot of
companies that were very valuable at a time, but their
ability to gain audience didn't let them capture as much value
as I think people would have thought.
But there's still a really active, you know, riot, you
know, sells out, you know, any kind of regional event, You
know, I think they sold out. They had a three day champion
worlds in in Paris this past summer and it sold out in 8
minutes. So people are still, people
still love it, people still enjoy watching it.
I think that just the developer publishers are capturing the
lion's share of those economics a big.
Portfolio company of yours is Roe.
You know what's I mean, it's a fascinating space given the rise
of GLP ones like, yeah. What's your read on sort of
their Business Today? Yeah, I.
Think, you know, again, we're talking about megatrends thing
about the rise of GLP ones, the rise of direct to consumer
healthcare, the ability to put the patient first.
So you know, going, you know, one of the things you're looking
for as venture capitalists, incredibly large markets where
people are paying a lot of money and are very unhappy with the
service. And you think about healthcare
being very clear in that, that people have a lot of money for
healthcare either as an individual or even employer in
government being the other other very large payer who doesn't
feel like they're getting their money's worth.
The patients are unhappy. The payers tend to be unhappy
about everything. And So what do you, so how do
you fix that? I think it's around six weeks to
get an appointment with the doctor today in America.
So if you think about all the things you could use help on and
when you get an appointment, you get about, you know, 10-11
minutes. So it's not like, you know,
people are really, really have the time to really provide
personalized healthcare. You know, can, can you do
something in a better way with remote access with AI to help
that provider know what's important to you and why and
then to solve very large problems and you know, GOP ones
and you know, obesity have been a huge problem for a long time.
GOP runs have now been proven to be very helpful and a lot of
other conditions. And are they still?
Able to produce them because for a while they had the
opportunity. So there was there's.
Like a scuffle there, yeah. GLP ones became so popular that
there was a global shortage. If there's a global shortage of
a necessary medication, the FDA says, OK, we're basically going
to suspend the patent and we're going to let people compound
their own drugs. And then when when that shortage
is over, it flips back and says, hey, you know, you got to
respect the patent again. And that's been a lot of chop in
the market with different players.
You know, we're always been incredibly good about respecting
those patents and saying, OK, when we need to compound to be
able to fill that consumer demand because there's excess
demand, we'll do that. And now when that's not there,
how do we partner with the Nova Nordics or Eli Lilly's of the
world to provide the best possible medication to the right
person at the right time at the right price?
And that that's moved on. And, you know, they've continued
to provide a great service. You know, they're kind of, you
know, Morgan Stanley put out a great note saying they're kind
of the Spotify of direct to consumer healthcare that you're
getting a premium service in a white glove way.
And you feel like you're being treated like this is a really
good service and you're a patient and and you're being
treated even as a patient like a customer finally.
And I think, you know, the growth of Roe, you know, kind of
riding that tide of GLP ones and that being maybe the most
important drug in the last 20 years is going to be a great
story for, you know, some of the stories they tell and how
they've changed people's lives, the ability to access
healthcare. And then from a digital health
side, how it's really changing the way that pharma companies go
to market and the impact they're able to have they they can.
Get the consumer excited about a drug that's good for them and
not Yeah, well. They hear it, they go see it,
and then they if they want to have access to it, they have
access to it. There's now a bunch of different
formulations. You get a pill, you could get a
shot. You can go from Lilly or
Nordisk, there's different providers and therefore you have
the ability to say, hey, this one's right.
For me it's differentiated. In some, yeah.
Well. There's enough, there's enough
providers out there that this one's right for me.
Hey, I'm afraid of needles. I'd rather take a pill.
I'd rather, you know, payless or pay more for it.
Maybe a different brand, no different than anything else.
But you know, here's what I definitely know what I want.
I definitely want to be able to take this drug, which is proven
to help people lose weight, you know, push off dementia, have a
lot of these other knock down effects.
And I want it delivered to my house and I want to be able to
do my regular check UPS. I want to be able to check on
make sure there's no side effects.
I want to be able to do that right, right through my phone
and get what I believe is a very high quality service.
And that's, you know, this next generation of companies are able
to provide a very high level of service, delight their customers
and then have, you know, a huge viral effect.
First, Mark was an investor in DraftKings.
Yes. Have the prediction market
companies, have you made a play there?
We have. Not and not because we were in
draft investors, DraftKings, we looked at some of them, maybe
because we were concerned maybe about the regulatory
environment. You're like we were.
Deep in the regulatory environment, and these companies
don't seem worried about it. We lived.
Through. It right?
And, and, and got and, you know, felt some of the pain of that
and these companies didn't seem concerned about it, which gave
us some concern. Do you think they were?
Always the prediction markets were always sports betting
companies in sheep's clothing, basically.
Well, I think now you could look at the and whether it's the
banks, Oregon, everyone else doing research, I think it's 85
plus percent of the prediction market stuff definitely now.
It is. I mean, for a little while they
had a 6A about, you know, elections and everything and
then. All of a sudden it's a little
bit about it. And then I mean, I was even over
in in Europe for a board meeting during the NFL playoffs.
And I wanted to look up. I, I think it was, you know, how
long the PM, how long people thought the PM was going to stay
in, stay intact in, in, in Great Britain.
And I go to pull up my prediction market and I couldn't
even get to how long that PM was going to be there because it was
8 pages of NFL ads, NFL playoff ads.
How do you? Think you think there's
eventually a crackdown? I think it's going to be
interesting. I think the current
administration is not going to crack down.
I think that might change under different administrations.
You know, the key thing is California, Texas and Florida,
huge part of the US that were, you know, at least California
bought, you know, actively voted to not allow sports gambling and
then now sports gambling exists. So what does that mean?
Maybe under a different administration or someone's
different way to view it or has this completely just, you know,
horses are so far out of out of the out of the paddock that
there's like a we, we can't turn this back anymore, you know,
which I think would just grow that market tremendously.
I think you know, DraftKings just had their investor day and
they said, you know, maybe we were not on our front foot on
the prediction markets because we we were trying to be is so
good on the regulatory side. But they were able to buy a
company in prediction markets and they believe this is growing
their Tam tremendously. So I think all those companies
will benefit from it. You know Flutter and DraftKings
on the current public side with their with their brands they
have today. But then obviously calcium
polymarket, are you still? Drafting as investor as.
Individual I, I still own a lot of the stock I got as an
individual as part of first mark, but we, we've distributed
all our stock this this. Sort of.
Political swing is interesting. Sort of closing out with, you
know, the IPO conversation again, I mean, do you think some
of these companies, yeah, they sort of need to go public in a
Trump era like the SpaceX and Elon's, where he's so close to
the. Administration, you know, I
don't know if you have to rush out before the midterms.
I don't know if the market cares that much about like rushing out
before the midterms. You know, what do you were, you
know, if something happened in the midterms and then that
emboldened the Democrats to say, hey, these prediction markets
are, you know, we're, we're after them, we're after them.
And that's going to be a huge piece of our 28 platform.
I think, you know, if you're a polymarket investor, you'd
rather be out than in, right? You'd rather have just already
gone public, just gone. Public and at least I always
think, and this might be a bias I have that if you can get out
and, and you, you think there's going to be something rough
ahead, you're better being out. We have more access to the
financial markets, even though it might be harder or more
expensive than it might, you might have thought and you at
least have some liquidity for some of your early employees and
investors. They might not be happy if you
hit a, a speed bump with the stock price, but they'll be more
happy than if you were private. So you just have greater degrees
of fleet of freedom to operate. You know, you have to provide
more transparency, but if you're uncertain about what's ahead and
you have the opportunity to be a public company during that time
of uncertainty and obviously if you have the great CEO, you want
to be up, Rick. Thanks for coming on the
podcast. Awesome.
Thanks. Great seeing you man.
That's our. Episode enjoyed having Rick on
the podcast. Thanks for sticking around to
the end. Please, if you've made it this
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