Apple, OpenAI & Why Nobody Makes Money in AI | The SaaS Apocalypse

Transcript

The advantage in Silicon Valley was actually knowing how to write the software. So you can be dumb about a bunch of other stuff and not very professional and get away with it because you had the magic wizard hat. And now that everyone has the magic wizard hat, I think it's quite bad for Silicon Valley's like comparative advantage. Hi, everybody. Welcome to More or Less. How's everyone's week going? Hey, guys. Well, Dave and I are down in L.A. coming to you live from the Upfront Summit, which is the pinnacle event of LPs and GPs across venture capital. And let me tell you. I want to know what athletes are coming. I feel like the athletes are the MVPs. There are no athletes. Aren't there always like Serena Williams? No, these are like super nerdy tech people., I don't think so. But I will say, if you ever wondered who listens to More or Less, it's these people. I got a lot of podcast love today from all the LPs and GPs. So that's our target audience, guys. And hopefully they'll listen on Friday once they're back from L.A. Exciting. Okay. So Britt's got the L.A. report. What's going on in the pool house, Sam? Well, I'm brought to you today by Miller's Craft Meats. Miller's Craft Meats. No, but your T-shirt looks like a Taylor Swift T-shirt. It's not. It's a hot dog shirt. The hot dog revolution has been done. What is the hot dog revolution? And is this a weird innuendo to something sexual? Oh, that's a great way to sell hot dogs. I hadn't thought about that. No, this is Uncle Breakfast Company. Steve Bookbinder has got a new meats company. I'm a proud and proud meat investor., AI is taking all of the software margins to zero. So now we do meat. Wow., because the AI can't disrupt meat. Well, true. Except for it can. Because I got pitched in a very cool company yesterday. Here we go. Here we go. That's using computer vision to like weigh cows and detect the healthiness of cows. That's fine. That's fine. Then goes into a marketplace where people can buy the meat. And, so AI can help sell meat. It's fine. I was pitched years ago on a company that would kill fish with AI more efficiently so that they, so that they wouldn't get poison. You, we kill an animal, And it feels adrenaline. It fucks up the meat. So this was, and it turns out it's like quite difficult to like kill fish quickly, like factory farm fish. And so the meat always gets fucked up. So these guys have an AI, a fish killing AI. So these things are happening. Can you check back in on that one? How's it doing? Yeah. I'm sure probably pretty well, honestly, but it's, I don't know. It's, it's the fish killing AI. Like put the fish in like a little tube and the AI would figure out where the brain is and then poke it, kill it with one shot. Why can't we do this to kill like the bad fish that we don't want near our shorelines, like the sharks? Well, you have to put them in like a tube first. It was, they like put them in a tube and they shot a nail through its head. We can put sharks in a tube. Sharks in a tube. You don't need to do that. Honestly, if you let people like just kill sharks, people would love that shit. It's just more of a policy thing., I think they do in some parts of the world. And then there's the whole documentary about why we shouldn't kill sharks because it ruins the ecosystem, blah, blah, blah. But that's like shark, that's shark propaganda. We can get rid of the sharks. I don't have an issue. Sorry. That's what I thought. I was, I know Jess wouldn't care because she could surf more. Yeah. This would be fine. I don't know that we could., sharks have been around way longer than we have. I feel they would find a way. The sharks always find a way. I'm not going to fuck around with a shark. That's all I'm saying. At some point, we're going to figure out how to translate shark language. And the sharks are going to be, what have you guys been doing? That's true. They're their ancient overlords. I feel like sharks don't have language. They're just silent killers of the sea. That's their only language is killing. I will say this. A shark versus AI summer Hollywood movie would be amazing. Oh, it's like Jaws 3.0. It's like there's some... During Shark Week. There's some scenario where like an AI has been told to kill all the sharks. And like the entire movie is an epic battle between like robots and sharks. And I could just imagine that being a great movie. Okay. Well, that's a good side project. So here's what we're going to talk about today, everybody. We're going to talk about the Upstart Summit. I need a little more color. The LPs. How are the LPs doing? It's been a big week of headlines. We've got some doomsday reports out that have the markets particularly spooked. They're not reports. They're just like philosophy pieces. Sure. Philosophy pieces. Narrative precedes all else. Everything is narrative. People only care about narratives anyway. Yes. Sometimes I read the agenda and then we circle back. Yes. So that's what we're doing. I think we should check in on the cryptos and if they're okay. Then we've got some AI earnings. Everybody loves some AI earnings. And then of course we have to check on all our bots and see how we're doing. But we're going to save the bots for the end, guys. Oh, guys. I'm totally back on Claude. Claude is where I'm at again. Okay. Sorry, Dave. That's the preview. But first we have to congratulate the victor. Mr. Dave Morin. Oh, God. I'm going to be arrested. Mr. Stem lesson. But how many seconds in a ski race? A second. How many seconds? But that's a lot. But he crashed through the finish, which slowed him down. So it would have been two seconds. Oh, that's not true., I think both of you were crashing left and right. But let's hear from the athletes., over here placed fourth in the women. Weren't that many women. So we don't need to talk about me. I'll try because I didn't want to just put myself up there. Next year. But Dave, what is it like to once again have the top honor? Well, it's nice to still have it, I guess. And it's always good to do a ski race. My,, I'm nursing bruises and dealing with gait bruises, which is, I guess, that's what I do this time of year every year. You need the pads. Happy to still have it. He wears the pads. He goes so hard that he bruises through pads. I had pads, but I still... I don't know. Those gaits were actually pretty soft, Dave. Those are not hard gaits. You might want to toughen up your skin. Sam, we've learned that you and I have different constitutions. But Sam, how does it feel? Like so close to gold yet not there? Honestly, there's one thing I don't mind Dave beating me. Dave was on the Junior Olympics team and I contested that I am as good a skier, if not better in certain conditions. But there's no question that Dave is a faster ski racer than I am. That's just not like a point of contention after 20 years. Were you surprised how close you even got? No, no, it's about what it always is. Sam, that's how it works. Our son Ansel came in fifth in the kids and I know that your sons came in higher than him, but I think there's a next generation more or less ski racing that's going to like start ramping up over the next couple years. So watch out. I think he's inspired to start ski racing., my six-year-old beat me, guys. And I'm a good skier. Yeah, our six-year-old really fucking put down some times. It's amazing. And our nine-year-old did well. Did very well as well. But the six-year-old just went for it. Your six-year-old is very impressive. The six-year-old is impressive. Soon enough, you and I can just like drink a bunch of beer and throw beer cans at our children as they go down the course. And like that's going to be even more fun. We're just so close. Let's start with ringing cowbells. Let's start with that and then we'll take it from there. Okay, well, we just had to props where props are due. Dave Morin, still number one. Okay, up front. Like what is the vibe? Like is it AI red-pilled? Is it where are our IPOs? Like what's the vibe? No, the vibe is a lot of GPs and not very many LPs. Is it just sadness? No, it's like. Oh, it's slim pickings. I would call it neutral to positive. But there are not very many LPs here this year, which everyone is commenting on. Oh, no. And like every GP is here. GPs I wouldn't expect to be here or here. So the GPs are looking for the money. A lot of GPs are here not fundraising. No, that's what they all say. Yeah. I was going to say, never be fundraising. Yeah. You can't say you're fundraising. They're doing networking. So they're prepared for their next race. But I've heard a few things. One, the LPs, they finally started charging some LPs that were getting a free ride. And then a lot of them backed out. Second, there was a huge snowstorm, obviously, in the East Coast. So a lot of LPs got stuck, apparently. I don't know if that's true. That's what I would say. And then I think a lot of LPs just don't have money right now. And apparently, this is the worst fundraising market ever. And everyone's complaining about it. People are calling their funds early and just closing up wherever they're at. So everyone's waiting for liquidity from all these theoretical IPOs that are happening. The IPOs are happening. Let's say more about why it's the worst ever. It's because the LPs are at their peak level of exposure. Because you still see like eye-popping fundraisers from Andreessen Horowitz, Thrive. Well, endowments in particular have this denominator effect where they're way over allocated in venture. And so they're just not spending. Andreessen Horowitz and Thrive are raising from like the Middle East and not necessarily like universities at this point. So there is a lot of talk about sovereigns in Middle East, by the way. Like two years ago at this summit. Oh, up front southern Dubai. Is that where we're going? Oh, up front Abu. Two years ago, it used to be, oh my God, I can't believe. I can't believe that fund raised Middle East money. And now everyone's, so did you go over Middle East this time around, bro?, yeah, yeah, dude. So that was just expected. Except for I think now all the Middle East people are tapped out. It used to be they thought this thing was shiny and now it's like cold. To be fair, none of the people telling us that were bros. They were all women that were telling us to go to the Middle East. There was one bro. There was one bro that told me that it was tapped out. Just saying. The Saudis don't have any money. The oil fields are dry. We have to go back., you should go to Canada. We should go to the oil sands. Specifically PIF is dry. Oil sands. But the UAE is not dry. It was fun to hang out with a lot of GPs, though, I will say. And like everyone to like talk about what's actually going on in this AGI, AI, agent world. Are you even investing in software anymore? Yeah. What are the GPs doing about the SaaS apocalypse? Newsflash. Nobody has any clue. Everyone thinks something different right now. Yeah. It's like all over the board. A lot of people aren't hiring junior people at their firms, though. The story hasn't changed in three years. Like interest rates are extremely high. Venture capital is an asset class that,, doesn't return like the rest of the blah, blah, blah. And so this isn't a new story. This is the same story that's been going on for three or four years. It's just like more of the same. And there is some, I think, optimism about what's going on with OpenClaw and with AI agentic engineering and,, where things are heading. But I would say that most people are saying that they're doing the, they've done the fewest deals that they've done in the last four quarters this quarter. And we heard that from a lot of people. Here's what's funny and just so on brand. I have to say it's so on brand. what our last Slow Ventures meeting was about? Flowing down. No, we've done more investments in the last quarter than we've done in the last year. Because we finally,, we're just, we're just, we've got to be contrarian. So we raised our fund last year, not at the upfront summit. And we're fucking spending money like there's no hot dogs tomorrow. Say more about why. Yeah. I don't know, because it's good stuff. It's like for us, it's just like when's there good stuff and when is it cheap? Because we're cheap. Well, that's the other thing people are talking about. It's very binary if it's cheap or super expensive right now. It's either like a $50 million pre on a seed stage company or like a five. And there's not a lot of in between. Guys, I've done two, two, two and a half posts in the last eight months. I'm very proud of myself. So where are the bargains in venture? You post things on Twitter. I see. Yes. People respond to you with their business plans. You pick the ones that are good and you fund those. But it's all about the Twitter posts to idea to shit posting company cycle. That's how we make, that's how we generate returns. On that front, Sam, I was going to ask you, you had a post about, you have several posts, but one this week about, I'm going to get it wrong, but when intelligence goes to zero, what happens? Yeah. Inbundant intelligence is bad business. It's like everyone's like all these computer scientists running around gleefully talking about how computers will commoditize human intelligence. And so all the humans will have no jobs and they're like sad about it, but they're also proud of their power. But what they fail to realize is that the original narrative was someone will get to AGI and then that would be the end of the game is not how this is playing out. Everyone's going to get to the same shit. It's all commodity. It's all going to get a price to the cost of energy. And it's all worthless because if things are abundant, then they have no value. So I'm just, guys, if you really, if you really believe that we're moving towards a world of abundant machine matrix multiplication intelligence, y'all in the pretty bad business, being hard is not a moat anymore. Software is not a moat anymore., I've been, I'm like having fun with this because it's insane for a while. Can be if you can only uniquely create it. So I think this is, this is my new precision, On this, which is like these people, I was talking to some entrepreneurs, actually two today, who I felt I was listening to like a 2021 pitch where they're, we did the user research and talk to the buyers. And the problem the buyers have is blah, blah, blah, blah, blah. So we were building software to address the buyer need. And I'm, what universe are you living in? Like if you believe that the tendency is to, all this shit is like commodity software that can be cranked out, which is the direction where I'm not saying we're there yet, but we're in that direction. You can't build a business doing a thing a buyer thinks they want right now, just because it's, and it's just software. It has to be that you're doing something where you write software, And you give it away, Or it's like free. You don't bank on the software, but you use it to build some durable compounding data asset or trust asset or marketplace asset. We're, they have to keep using you because you're fundamentally structurally better at something that's defensible, Where you have a compounding advantage. But this idea, like anyone who believes that they can build a business because something is hard right now, as opposed to because there's some compounding inherent advantage to it, it's not going to be attackable is like cray cray. We have a company in our portfolio called Pulsia that a week ago had like 100k ARR. It's a new company. And it's pronounced R. I actually was thinking of bringing Ben on the podcast because it's been so fun to watch him. We need some guests, by the way, guys., I love you all, but we need some guests. Ben Lear was really pissed. We haven't asked him back yet. Again, we got some good people from Upfront. I want to be our guest. That's it's like because they need to raise money. Be our guest. Be our guest. Well, he didn't even need to raise money. Okay. So Pulsia.com slash live is this, don't like that name. It's AI. Can I say it, Dave? No. Yes. Share with the public. Transparency. Break some news. Why? I think it's funny. Don't give it away. Just think about words you can make with Pulsia. That's all. I'll leave it with that. Keep telling the story. That sounds like so that sounds like a female body part to me. Just going to say. Okay. So it is showing it. This founder is a sole founder. He has no team. He just booted up all these agents to build this business. And if you go to Pulsia.com slash live, it's the agents running the business in real time, showing you everything they're doing. And this company has gone from like 100k ARR to like 700k ARR in like less than a week right now. And it's, you can see the graph on the dashboard page. Are they doing a good job running the business? Is the business making more money than before? Yeah. Yeah. No, that's, that's why the ARR is up. Yeah, it's great. Oh, right. It's crazy. And it, it optimizes all of the spend and like efficiencies of,, it's running ads for you. you can start businesses on this platform and it like does the same thing for you if you have a business idea and it'll just like start doing things for you and like running your business for you. So people are like booting up many, many businesses. It's really amazing actually. So if you want to start a small business, you can use Pulsia. It'll do research, help you do naming. But guys, these businesses aren't going to need capital from you VCs. Yeah. It doesn't need any capital from you. We're not saying that they need capital from VCs. I'm just saying it's an example of like this agentic universe exploding right now. And people, I think the tale of two cities as we've been talking about for a while. I'm going to make a business called Pulsia clone that just takes whatever Pulsia figures out and just re-implements it and gives me the ARR, And let them burn all the tokens figuring it out., this is a tendency towards zero, Like there's no margin. I don't know. I don't know, man. Like Pulsia took this guy quite a while to develop. This isn't something that was just vibe coded in a week. he's been building this system for over a year. I believe that. I totally believe that, Dave. And it's with respect to a founder I have never met. Sam, this was a founder. We backed it slow. I've worked with this founder several times before. He's extremely talented. He's from Paris. I'm sure it's all true. And it's not to knock him personally, but from a pure first principles perspective,, it's like anything. It's like blazing the trail is much harder than following, It always is. So like someone shows you the roadmap, you can get there faster and cheaper. And so I just wonder to what degree with any of these businesses that people can boot in a box or whatever. It's, even if you think about it as like a token spend, it's, if you spend a hundred thousand tokens to figure it out and I can spend 10,000 tokens to clone it. Right. I'm not saying that it never works, but I'm saying, that's how market efficiencies work. And the more the bots are in the game and can do it dynamically, it just will, it'll just collapse margins so quickly is my sense. Well, this raises a question I had, which is, are businesses just going to operate in secret more because of this? And how like. It's a pretty cynical take. No, it's actually how capitalism works. It's you, you, the whole point of capitalism is to collapse margins. In an economics book, it's not always true that it's that efficient, Sam. And, definitely not. It's a hundred percent, but I would say that the whole point of the bots and this whole world speeding up and the fact that like things that were hard become easy to like brute force. That is actually what the whole story is right now is, actually capitalism is getting, it's like a black hole. It's gotten so good. It's outmoding itself. Right. Which is, you compete everything to the marginal dollar much more quickly because bots can do it and never sleep versus humans doing it. There's always going to be exceptions. Right. But I'm just saying, broadly speaking, I think that's a lot of what we're seeing is that margins just compressed so fast. Right. It's, it's the same story with these models and like open router versus cloud code. It's, versus even like claw bot. It's you sit there and it might be that someone had an advantage for six months that gets eroded to three. I sit there and just flip the models on open router whenever I feel it for the cheapest, most efficient thing. And there's just no margin to be had. Well,, at no point in human history where a new technology came along that made us more productive, were we less productive, it's always been the case that more things happen., if you look at the numbers, like there was an FT piece, I think it was this morning, new website creation is up 40% year over year. New IOS apps are up 50%. GitHub pushes are up 35% in the US, 30% in the UK. These metrics were flat for years before late 2024. And we're now seeing like jumps in the production of all kinds of different software, like across the board, like the sparklines are all going parabolic. And so I just don't know that, I just don't know that it's like going to be this perfect machine. But productivity and profits are not the same thing, are they?, I don't. Not necessarily, but, I just think that like there's more activity. People are going to find interesting things. Sure. But here's, here's another way to look at it. If you looked at the number of photos taken over the last decade or when social media is like through the roof with the iPhone, Or like the amount of likes and comments on a service through the roof. Built a huge business. One person did or five people did, but they the producers of all those things, all that activity, Doesn't actually result necessarily in like net value. It's like a war of attrition for attention, And so, it's just not clear to me. But aren't you running the creator fund? Yeah, because I believe in cults. That literally is investing in people that create the content. Sure, but that's not, but no, no, no, but I don't invest in them for creating content. I invest in them for building cults and communities and affinity groups. Like there's a big difference,, I understand, but you think that there's profit there. What's to say there isn't that? I just don't think it's about token spent. It's like, or, this is the thing I've seen a lot of people get excited about in different things are, we want engineers to spend as much money on AI. And that's like a measure of productivity is the spend. And you're, no, that's like not sensible. it should be, it's the margin that you care about. It's the profit. It's not just, you don't, you don't get credit for spending more money, Or for creating more things., I think that you want to look at value created per token, Just you're saying, Sam, like just because somebody creates content doesn't mean that they create a cult, doesn't mean that they create a community, doesn't mean that they create a marginal. But the value per photo taken has never been lower, Like in the world, because we take, because it's so cheap to take photos. You take photos of garbage constantly. There's no actual value to it, The value tends towards zero of the incremental piece of content or the incremental thing as the cost tends to zero. But it doesn't mean there's any margin in it. And there doesn't mean any value in it, It's just- Well, but you can use a stream of photos to create a community. No, but I,, if you look at my camera roll, I'll take a thousand photos for one good one, If I didn't take those, the world would actually be a marginally better place. They're actually negatively valuable, It's the thousands that like is great, And so I just think it's like this equation people are doing right now, like more tokens spent, more intelligence burn. Look, I'm the first one to admit, I probably spend, I think, thousands of dollars a month right now on various web services that I wasn't a bunch of months ago, It's all for fun. I enjoy, I don't mind, I'm learning from it. But, there's not super valuable. It's just me fucking around, Like if it went away tomorrow, my life is not worse off. It's literally the same. Yeah, but Sam, I think to your, to your creator fund thesis, like all the streams of digital creation that have come about because of the rise of the internet have resulted in people being able to create new kinds of value and new configurations and new communities that otherwise,, maybe they would have existed because there's a magazine on the shelf in the airport and everybody who flies planes or loves cars or whatever finds each other. But I think that there's people who are making vastly more profitable businesses serving these niche interests because of what you can do with the internet. And I would argue that the same thing is going to be possible with this new type of software creation. you're going to be able to create businesses that are interesting and there's going to be a Cambrian explosion of them. And we don't know what they're going to look, but they're going to come from streams of tokens that people are using to,, build new things. I think there's something to just keep in mind though, is, look on the flip side, the first thing that comes to mind is the great old like Henry Ford quote, which you can have a Model T in any color you want so long as it's black. Right. We went through a phase where you could have colors and a lot of colors. Did it make people fundamentally better off?, probably not. It's where the market drew you. Right. But, I don't think it like matters. Right. Like from like a big picture perspective. The analogy I would give on the Crater Fund is, look, I a hundred percent believe, obviously put a lot of money where our mouth is and whatever, that we're in this era where people are fleeing to the margins of these like cult communities with deep, super interests in different areas. And that becomes their like points of affinity. Does that make us better off?, no, I think what's happened is like the entire, we lost the ability to be the best basketball player in our town or to have meaning, or if you're the car dealer to feel really good about being the rich guy in town, because you want to use car dealership, like the globalization, the internet blew away all that and made people super sad because they realize they're not the best basketball player. They're not the richest. They have no role in their town. AI is only going to accelerate that because people sense of meaning goes away. So the market draws us towards cult and community, In these extremes and weird shit in order to like create a sense of purpose and meaning. Like that's all for sure happening, Like flat earth makes a hundred percent sense. But, I don't know that there's any like deep value to that. It's just shifting it around. I think their sense of meaning is going to go up. I think our sense of meaning is cratering right now. And so relative to where we are today. Yes. I don't know, man. I think, I think, I think people's sense of meaning that's the thing has never been worse. I want to just take stock of where everyone's positions are. We're debating for those who might remember what's going to happen to capitalism in an AI era. Sam thinks it goes to zero because things commoditize. And Dave makes the point that productivity has always been coupled with greater business growth over time or new technologies, Am I summarizing that correctly? Well, I don't think capitalism goes to zero. I think capitalism does exactly what capitalism does, which is wring all the margin out of everything and make goods as cheap as possible. Right. So who makes money in that world, Sam? That's the problem, Is that if capitalism works perfectly, no one makes money. Like that's the irony of capitalism, Is that like capitalism- But it doesn't work perfectly, Sam. It's good. It's working a hell of a lot better than it did. There are always bottlenecks, but the people who build things that help with the bottlenecks make money. Well, but Sam's point is if AI takes all the inefficiency out of the system, the inefficiency is where the money's made. It's not going to happen. Or does the money just go to the few instead of- Yes. I think Brit's got it. I think Brit's got it, which is what happens is, and again, I'm not, this is not a value, this is a statement of fact, is that if you own something that is fundamentally valuable and compounding, you're going to do great, If you own scarce assets that are not digitizable or replaceable, you're going to do great. But if it used to be, hey, you had some baseline value as a male, which is you could drive a railroad spike, that was super good. That was a lot of confidence in that. People felt really good about the fact they had fundamental value. That's gone. Now, it's just not that complicated. With white collar work, most of it gets blown away, And when that gets blown away, that means that the few compound really nicely and they're going to do great. Great time to own assets. Great time to be in that advantageous position. But the latter is gone and the value doesn't get shared, which is how you're going to end up with revolutions. Because again, this isn't even, I think, even avant-garde to say anymore. It's, look, people need a sense of purpose and meaning and security and safety and the value they can drive in the society. And unfortunately, there's no question that AI is just sucking that out of the system for most people. Okay, Dave, give us a response and then we're moving on. There are, we've talked about this before, there are 4 million iOS engineers in the world. There are around 6 million Android engineers. And there's something on the order of 3 to 4 billion users of software in the world. And so another narrative is that everyone has been stuck using the software created by the few. And that people have not had their own agency over how they create and therefore consume software. And that really what is happening right now is that AI, at least over the next couple of years, is going to make it much easier for way more people to create their own software, share their own software with the people around them, and maybe even millions of people, not necessarily billions. But I just think even if you only see, call it a 3x improvement, like let's say it's going to be 30 million people creating software for the 3 billion. Like that's going to be a massive amount of value created and a whole bunch of people that feel they have new purpose and new agency in creating software for each other. But I just don't think software is valuable. I like... I think we have to be specific about what value, Dave.,, I'm trying to think of an example. you could be entertained and that's value, but make zero dollars, You could... There's something that actually helps build a business that has different value. There's something that has like social capital, which has a different value. Well, some software is still going to be valuable to your point earlier, Sam, and what we've talked about. But actually, there's an interesting question. What software? Forget ecosystem. Forget network effect. Forget data. What software is possibly going to be valuable? Is it even valuable now? No, but software coupled with like a data asset, like a marketplace, like a social graph. That's the key question, Britt, honestly, is assume that software is just like always disposable. All you're ever doing, really... This is a really nuanced point. But no, no, I think this is an important point. Like there was... There's been a world for a long time where literally just doing the brute force of writing a bunch of software was in and of itself a defensible position. You're, I wrote a lot of software and because I wrote a lot of software... And I'm not actually trying to argue. So that's going to go... That's gone,, I wrote tons of tons of tons of tons of tons of tons of tons of tons of tons of tons of tons of tons of tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons tons We've invested in some businesses that are doing this nicely, but it's very, very vanishingly hard to do. So it's just an interesting problem because, yeah, I agree. I've written, I've committed more lines of code this month than I did last summer with cursor. I committed more lines of code with cursor than I did by hand the year before. There's more diffs being pushed, sure. But, it doesn't like have any value, Like there's no economic value to the diffs. And I would argue that what it can do for me personally, writing my own software, it's not terrible, but it's not like massively valuable. it's just stuff I'm playing with. Right. And so I think that like the bar of, can you, are millions of people going to find new ways to write personal software that makes them dramatically better off or has economic value to other people? I'm just skeptical. I just feel like the people were locked out from even playing this game, Sam, it's that people in Silicon Valley and around the technology community had the ability to combine software and a new business or business model or emotion around the creation of a new business. It was the combination of the two that created a lot of value over the last 20 years. And unless you knew how to speak the language of software, you couldn't do this. And so now you will be able to do this. So what does that really mean though? Just to push you one, I think it's bad for Silicon Valley, not good for Silicon Valley, Because the reality is that was the superpower. I'd actually argue the average person in Silicon Valley is not as smart as like the average person in New York finance, They're not the best marketers. They're not the best at anything. The advantage in Silicon Valley was actually knowing how to write the software. And so you can be dumb about a bunch of other stuff and not very professional and get away with it because you had the magic wizard hat. And now that everyone has the magic wizard hat, I think it's quite bad for Silicon Valley's like comparative advantage, Like that's just, I think going to happen. And then two, the question is when you give everyone the magic wizard software to make shit, are they going to make shit like dramatically better than like what they already do that change? And I'm just like more skeptical than that. I don't think, I think it'll happen. Like certain things, maybe, maybe what happens is like stuff like terrible EHRs that have been impossible to replace. Like EHRs are a great example of a business, electronic health record systems. Like why are they so shitty? they're shitty because they're just so huge, That no one could possibly compete with Cerner or Epic or McKesson because it literally would just take too much engineering time to compete with them. And so they've been able to like sit on monopolies that are really shitty for a long time. Does that get blown up? Maybe., they do have very powerful ecosystems too, and they can now move much faster too. But so, I'm not saying nothing will happen, but I think this utopian, like now that we can all write software, GDPs, I, I don't buy it. I actually think of anything like a lot of people who like had a skill that was valuable and allowed them to a lot of comfort and like to feel they had a role economically or whatever, are just going to get eviscerated. And it's very possible it gets replaced by nothing. Okay. Yes. This is what the whole economy is terrified about,, or curious about, or have some opinion about. So. Well, this is, there's a great chart. I love, there's a chart I posted on Twitter. We should post in the comments. This is not mine for once, egotistically., but it's great. It's, I think it's from the economist and it's like the, the title is AI could end scarcity and humanity or boost trend growth by 0.2% percentage points. And it's like this chart that has like the line going up and then two lines, the range just goes like this to infinity into zero with, the thing is no one's going to fucking give a shit or bet on the 0.2% growth, Which is exactly what we're seeing. You're either in gold or you're in copper,, or you're in both because you don't fucking have any clue, but all is that you do not want to be on the train of slowly growing profits, which is why all software companies to zero right on the narrative. It doesn't even matter if it happens. Okay. Well, look at the chart. I have one more topic slash question for you guys. Who should buy PayPal? It's in play. Who should buy it? What's going on? Why is it in play? Give me the, give me the overview. Does that mean Venmo is going with it? Yes. They are one coming. Should we try to buy Venmo?, Ikram was messaging, messaged you and me, Dave, about buying Venmo. Guys, I asked a different question. Sam, come on. Let's try to buy Venmo. Wait, wouldn't OnlyFans want to buy this, Sam?, I don't think OnlyFans can afford PayPal even with his depressed stock price. What is the price of PayPal? $40 billion. Oh, okay. Here's the problem. Here's the thing that's interesting about PayPal. It's really, what are you buying? you're buying the distribution, the customer,, the brand sucks. The data. Maybe the data, I don't think the brand sucks. I will say, I don't think the brand sucks. I don't know. Isn't it just like a ton of like banking interconnect, all kinds of crazy fintech stuff that you, is very hard to build up over years., there's only one way to know what you're buying, which is to sit Claude bot on it and say, Claude, what the fuck is this thing? AI diligence. Can you replicate it? What part of this $40 billion price can I replicate? For what it's worth, the fact that this whole idea that you could just, that's a great example. It's like someone at some point, I don't think we're there yet. Some PE shop could sit there and be, okay, PayPal is garbage, I bet the infrastructure is terrible. I bet it's all a mess. It's really a customer set of records, like whatever. There's like a bunch of assets to it. Historically, you'd be, I can never touch this. you have to build from what's there. Like there's no way we can touch this, it's just, we're stuck with whatever it's potted in. And I do wonder if you can just be, look, take these assets, spend millions of dollars, billions of dollars on tokens and just like repot the entire thing. it's just an interesting future, Where you can just rip apart everything. And then just plug in the customer base and like all the data into it. Plug it all in, spit up an AWS instance. But like how would you grow it from there? Like what's the end case for PayPal? Well, PayPal I think makes half a billion, or half a, like a shitload of money. But like on fees,, sure. So what's the diff,, again, what's back to the competitive moat? I don't want to spend time dealing with this, but I'm saying someone out there in terms of how, what businesses will exist, the business of, buy the PayPal, spend millions on tokens and like repot it. It really is the distribution. It's like the PayPal buttons that are embedded across the internet. If you were Stripe, how much would you pay for PayPal? Well, here's an interesting question. I was thinking about this is, in a non-Trump administration, there's no way you could buy it. Correct. This is why it's all happening now. One shot. And so that's why it's happening now. I was, this is the one chance for Stripe to sneak through becoming effectively a US monopoly on payments. And so the question is, I actually think it's for Stripe less about the business and more about the politics of it, which is if you do it now, the next administration is going to go apeshit. And so the question is only, clearly you should buy it and just consolidate the whole thing., and that's an amazing position to put yourself in, but not at what financial costs, at what political costs when everyone goes to get,, pulled before Congress., it's actually a question of other costs and of, how much time do they want to spend in Washington DC in hearings, in, three years from now? That's like the real question of the whole thing. Probably a little bit. Well, I don't know if I were them, from what I've seen in my life, the answer is, it's not worth the headache. we've done really well, we're going to keep doing well, PayPal is not really a threat. We're happy for them to continue to putter along and not spend all of our lives in Washington DC. But maybe they I don't know, that's, that's the person, it's much more of a personal question than a business question. And back to the, long term where PayPal goes, if agentic commerce really is where this is all going, does it matter that you have distribution across all these websites everywhere? Or,, that you can pay check out with PayPal, you're gonna have tolls everywhere else else, We had great story and information this week about the the SaaS stuff and all these businesses and how they're thinking about toll booths on the internet versus meaning, I want to go buy something from Nike.com and use my credit card,, why would I need to use PayPal? Well, it's, is your age? Does your agent have access to Nike? And at what terms? Yeah, but at one point? Yeah. Like that's gonna happen. But if you're in a big network, the terms are probably going to be better. But just, do any of these payment infrastructures matter when my agent just has my credit card? I think,, it is a great question. This is capitalism, but you're describing it. If everything's efficient, there's no margin. That's how these things work. Yeah. Yeah. PayPal down to zero. I also think PayPal,, all of it, maybe you Facebook people will understand this more, but the whole like login race that we witnessed that still think like PayPal, I log into a lot of sites. You log into sites with your PayPal ID? All the time because of what? Wow. Do you use your AOL ID too? Are you in 2002? What's happening? I don't remember the last time I've done that. Guys, I want to switch to an AOL address. Sam, what are you like? What is your wife doing over there? I like the AOL. I like team AOL. I'm going to, look, guys, should we change our email addresses to at AOL.com?, I like people. Does anyone want to hear from the person who's using the target in question? Everyone I've ever emailed with in the music business is on an AOL email address. Oh, guys, AOL mail is free and helps keep you safe. Sounds like a plan to me. Go for it, Jess. I'm just saying I think PayPal has a really great experience for just like login address cards., I think it's just one of the fastest, to be honest. And I have a lot of information stored up in there. So it's really surprising. I have a lot of new thoughts about you as an online citizen. Yeah, it's not I'm losing Outlook. Come on. Be nice. It's close. It feels close to me. It feels close to me. This is PayPal. I don't know. But also, we're all using Venmo constantly, which is part of PayPal. So I don't know. Well, I'm down with Venmo. Yeah. I think there's a price. I thought OnlyFans would want to acquire this, Sam. Don't they need to build up their tipping infrastructure? Now, Login with OnlyFans actually might be the future. Because I got to tell you, the OnlyFans has incredible KYC. So actually, that is a real thing. There we go. I bet. Let's see. Just let's see. Over, under on them actually. But I bet they don't. I don't know. They're not going. They're too smart to. It's not worth it. It totally, in a normal business environment, nonpolitical, where miraculously they would be allowed to buy it, they should clearly buy it. In a world where you're going to be able to buy it because Trump is president, but it's clearly going to get scrutinized you wouldn't believe and you're going to get a colonoscopy for the next 10 years if you do it, why would you screw up like a perfectly, you're in a great position. Why would you mess with that?, you're because your VP of policy testifies, not you. Oh, that is not how it works. Something like that. And you well know it., you show up for one session, but I don't know., yeah, I will say my spidey sense of why it won't happen is just that it's the nature of the leaks have been like trial balloons galore. You can just tell like how these stories get out there. And this has been one, like someone has like put their finger up to the wind to figure out which way it's going. So that makes me a little more dismissive of it. But I don't know., a non agentic story that we turned into an agentic story. I have a fun fact for you guys. So the information recently published the list of all the people working, not all the people, but some of the top people working on what we now know is open AI smart speaker. Hello. Hello. Hello. I saw this. How do we feel about a smart speaker? Is it a smart speaker or is it a thing in your ear? Because I've seen both. No, there's a there's a whole there's a family of app. The family. Okay. But aren't they a couple of years away? This is honestly the most distracted company in the history of the world. it's wild. There is a lot going on. Do you want to guess who's one of the people who's working the top people working on this project? Okay. Give us a hint. Who? Adam Q. Do who Adam Q is? No. Do another Q who works in tech? Who might have a son? Adam. Eddie's son. Eddie's son. Oh. I do know. I do know Adam. Adam's great. Actually, I met Adam when he was younger. He's on this project. Oh, that's cool. So anyway, we've got a little. That's a weird family dinner. A house divided. A house divided. That's an awkward Thanksgiving. There we go. You can now reach me at Sam W. Lesson at AOL.com. And please send any feedback there. There's a lot of ads in this thing. Can you can you get into it with. Pop 3? Oh, man. I used to love Pop 3. Speaking of AOL. Also, what what device. What device do you think is way up in sales this year from the early 2000s? From the early 2000s? Early 2000s. There's a single device that all Gen Z people are trying to buy now. It's almost like the flip phone. It's not a phone. Not a Walkman. No, you're getting closer, though. You're getting warmer. You're getting warmer. A mini disc player. A digital camera? You're gonna know. No. Ready? It's the iPod original. OG with the click wheel. People are all over eBay buying this thing. Honestly, guys, you guys know that I already I hate Apple, but Apple's lack of CapEx has made me start liking them. You don't hate Apple. With the, fuck you, no CapEx. It's amazing. You're probably one of Apple's top. I don't know what the metric is, but you are a top customer of Apple. You do not hate Apple. To be clear, I literally just came from the Apple store to buy another laptop. I have I'm starting to have a hundred thousand dollars of Apple devices here. I just don't it. Why? Why do you need so many laptops? I was actually trying to explain this to my son because he said Sam's son has a MacBook. And I'm, that's because Sam buys a new MacBook every month. Well, this one actually is for another one of my sons. But yes, the point is I am my ratio of hatred of Apple. No, no. What would it be? Devices purchased. Just devices purchased divided by hate is off the charts. But I love their CapEx. It makes me very happy. The only thing that would make me love them more and actually might turn me is if they do a big product announcement to reintroduce the 2001 iPod with the click wheel and just go all the way back and be, Yeah, you enjoy your agents. We're releasing a click wheel. We're going to make more money. Just go full analog. Yeah. Hey God, that would be the best. Acquire Mod retro. It would be better than the little sock holder. they have,, that would be bad. It would be so good. Wait, what are people? How are people talking to these old iPods? It's like an old Firewire device. How do they even get stuff onto it? Gen Z swap smartphones for single purpose iPods is like the head. Okay, Gen Z is putting down phones and picking up iPods. I love Apple release the retro iPod, you cowards. These are all headlines from news this week, literally in the last day. Gen Z is just we're going to be the least productive generation of all time. They're modified with new batteries and 160 gigabyte storage. They're selling out on Etsy and eBay, just saying. Okay, well, what's old is new as new as old. Agents and iPods all the way down. Dear friends, we should let our listeners and viewers go because they've gotten their agentic dose for the week. With that, we will say that we will see you again back here next week for another episode of more or less. Bye. Bye. Thanks everyone. If you enjoyed this show, please leave us a virtual high five by rating it and reviewing it on Apple podcast, Spotify, YouTube, or wherever you get your podcast. Find more information about each episode in the show notes and follow us on social media by searching for at more or less at Dave Morin at lesson at Jay lesson. And as for me, I'm at Brit. See you guys next time.