Podcast appearances and mentions of eric all

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Rogue Shop: Go check out RogueShop.Com if you have issues sleeping, chronic pain and or have anxiety/stress. When you Use Promo Code BWI to get 10% off your order! Subscribe to Blue White Illustrated on YouTube: https://bit.ly/3KzEcqK Penn State football dissected Iowa on Saturday night in the 2023 White Out Game. Today we'll take our final look at the contest and then look ahead to the rest of the season on the Keystone Kickoff Show, presented on the Blue White Illustrated YouTube Channel. We'll start by giving a full review of the Penn State offense and defense before moving on to recapping where the team stands one-third of the way through the season. Check out the exclusive video broadcast of this regional Pennsylvania radio show on the BWI YouTube channel live at 10 a.m. or here on the site. Penn State vs Iowa recap Before we fully turn the page to the next third of the season, we'll review the Penn State offense and defense and their performance during their 31-0 win over Iowa last weekend. We'll discuss Drew Allar's performance and his methodical, careful approach to the game by describing his day with several important advanced stats. Next, we'll discuss the ground game and how the team performed by highlighting Nick Singleton and Kaytron Allen's day that led to 57 total rushing attempts in the suffocating victory. Finally, we'll review the defensive performance and explain how Iowa came out desperate and did things counter to their traditional style. We'll also explain the consequences of the fumble by Eric All in the red zone. Nittany Lions through four games, preview of Northwestern The Penn State offense has scored 30 points per game, yet the team still needs to completely fire on all cylinders. Where are the areas of improvement for the offense and defense? We'll discuss that and answer fans' questions. Have fans caught up to the play of Caedan Wallace? We answer a question about the long-time right tackle. Finally, we preview the offense for Northwestern and how that side of the ball likes to play. Head coach James Franklin gave an outline in his press conference on Tuesday. "They're a no-huddle offense that really -- they can run tempo, but they're more kind of the illusion of tempo so they can see how you line up and then get to the plays they want to run. They base mainly out of 11 personnel. They want to throw the ball. I think that's where they feel like they have the best chance to be successful." "I do think Ben Bryant, their quarterback, is probably the best pure thrower that we've seen this year." Penn State Progress Through Four Weeks, Northwestern Preview JOIN Blue White Illustrated: https://www.on3.com/teams/penn-state-nittany-lions/join/?plan=annual SUBSCRIBE to Blue White Illustrated on YouTube and enable alerts - new highlights and videos uploaded regularly: https://www.youtube.com/c/bluewhiteillustratedvideo?sub_confirmation Bookmark our homepage: https://www.on3.com/teams/penn-state-nittany-lions/ Subscribe to BWI Magazine and Newsletters: https://bluewhiteonline.com Download our podcasts: https://cms.megaphone.fm/channel/LRL3155877513?selected=DSVV2664982394 Like us on Facebook https://www.facebook.com/BlueWhiteIllustrated/ Follow us on Twitter https://twitter.com/PennStateOn3 Sound effects obtained from https://www.zapsplat.com Learn more about your ad choices. Visit megaphone.fm/adchoices

For the first episode of the Newcomer podcast, I sat down with Reid Hoffman — the PayPal mafia member, LinkedIn co-founder, Greylock partner, and Microsoft board member. Hoffman had just stepped off OpenAI's board of directors. Hoffman traced his interest in artificial intelligence back to a conversation with Elon Musk.“This kicked off, actually, in fact, with a dinner with Elon Musk years ago,” Hoffman said. Musk told Hoffman that he needed to dive into artificial intelligence during conversations about a decade ago. “This is part of how I operate,” Hoffman remembers. “Smart people from my network tell me things, and I go and do things. And so I dug into it and I'm like, ‘Oh, yes, we have another wave coming.'”This episode of Newcomer is brought to you by VantaSecurity is no longer a cost center — it's a strategic growth engine that sets your business apart. That means it's more important than ever to prove you handle customer data with the utmost integrity. But demonstrating your security and compliance can be time-consuming, tedious, and expensive. Until you use Vanta.Vanta's enterprise-ready Trust Management Platform empowers you to:* Centralize and scale your security program* Automate compliance for the most sought-after frameworks, including SOC 2, ISO 27001, and GDPR* Earn and maintain the trust of customers and vendors alikeWith Vanta, you can save up to 400 hours and 85% of costs. Win more deals and enable growth quickly, easily, and without breaking the bank.For a limited time, Newcomer listeners get $1,000 off Vanta. Go to vanta.com/newcomer to get started.Why I Wanted to Talk to Reid Hoffman & What I Took AwayHoffman is a social network personified. Even his journey to something as wonky as artificial intelligence is told through his connections with people. In a world of algorithms and code, Hoffman is upfront about the extent to which human connections decide Silicon Valley's trajectory. (Of course they are paired with profound technological developments that are far larger than any one person or network.)When it comes to the rapidly developing future powered by large language models, a big question in my mind is who exactly decides how these language models work? Sydney appeared in Microsoft Bing and then disappeared. Microsoft executives can dispatch our favorite hallucinations without public input. Meanwhile, masses of images can be gobbled up without asking their creators and then the resulting image generation tools can be open-sourced to the world. It feels like AI super powers come and go with little notice. It's a world full of contradictions. There's constant talk of utopias and dystopias and yet startups are raising conventional venture capital financing.The most prominent player in artificial intelligence — OpenAI — is a non-profit that raised from Tiger Global. It celebrates its openness in its name and yet competes with companies whose technology is actually open-sourced. OpenAI's governance structure and priorities largely remain a mystery. Finally, unlike tech's conservative billionaires who throw their money into politics, in the case of Hoffman, here is a tech overlord that I seem to mostly agree with politically. I wanted to know what that would be like. Is it just good marketing? And where exactly is his heart and political head at right now?I thought he delivered. I didn't feel like he was dodging my questions, even in a world where maintaining such a wide network requires diplomacy. Hoffman seemed eager and open — even if he started to bristle at what he called my “edgy words.”Some Favorite QuotesWe covered a lot of ground in our conversation. We talked about AI sentience and humans' failures to identify consciousness within non-human beings. We talked about the coming rise in AI cloud compute spending and how Microsoft, Google, and Amazon are positioned in the AI race.Hoffman said he had one major condition for getting involved in OpenAI back in the early days when Musk was still on board.“My price for participation was to ask Elon to stop saying the word “robocalypse,” Hoffman told me. “Because I thought that the problem was it's very catchy and it evokes fear.”I asked Hoffman why he thought Musk got involved in artificial intelligence in the first place when Musk seems so worried about how it might develop. Why get the ball rolling down the hill at all, I wondered?Hoffman replied that many people in the field of artificial intelligence had “messiah complexes.”“It's the I am the one who must bring this — Prometheus, the fire to humanity,” Hoffman said. “And you're like, ‘Okay, I kind of think it should be us versus an individual.'” He went on, “Now, us can't be 8 billion people — us is a small group. But I think, more or less, you see the folks who are steering with a moral compass try to say, how do I get at least 10 to 15 people beyond myself with their hands on the steering wheel in deep conversations in order to make sure you get there? And then let's make sure that we're having the conversations with the right communities.”I raised the possibility that this merely suggested oligarchic control of artificial intelligence rather than dictatorial control. We also discussed Hoffman's politics, including his thoughts on Joe Biden and “woke” politics. I asked him about the state of his friendship with fellow PayPal mafia member Peter Thiel. “I basically am sympathetic to people as long as they are legitimately and earnestly committed to the dialogue and discussion of truth between them and not committed otherwise,” Hoffman said. “There are folks from the PayPal years that I don't really spend much time talking to. There are others that I do continue because that conversation about discovering who we are and who we should be is really important. And you can't allow your own position to be the definer.”I suggested that Thiel's public views sometimes seemed insincere.“Oh, that's totally corrosive,” Hoffman said. “And as much as that's happening, it's terrible. And that's one of the things that in conversations I have, I push people, including Peter, on a lot.”Give it a listen.Find the PodcastRead the TranscriptEric: Reid, thank you so much for coming on the show. I'm very excited for this conversation. You know, I'm getting ready for my own AI conference at the end of this month, so hopefully this is sort of a prep by the end of this conversation, we'll all be super smart and ready for that. I feel like there've been so many rounds of sort of AI as sort of the buzzword of the day.This clearly seems the hottest. When did you get into this moment of it? I mean, obviously you just stepped off the Open AI board. You were on that board. Like how, when did you start to see this movement that we're experiencing right now coming.Reid: Well, it's funny because my undergraduate major was artificial intelligence and cognitive science. So I've, I've been around the hoop for multiple waves for a long time and I think this kicked off actually, in fact, with a dinner with Elon Musk years ago. You know, 10-ish years ago, Elon and I would have dinner about once a quarter and he's like, well, are you paying attention to this AI stuff?And I'm like, well, I majored in it and you know, I know about this stuff. He's like, no, you need to get back involved. And I was like, all right. This is part of how I operate is smart people from my network tell me things and I go and do things. And so I dug into it and I went, oh yes, we have another wave coming.And this was probably about seven or eight years ago, when I, when I saw the beginning of the wave or the seismic event. Maybe it was a seismic event out at sea and I was like, okay, there's gonna be a tsunami here and we should start getting ready cause the tsunami is actually gonna be amazingly great and interesting.Eric: And that—is that the beginning of Open AI?Reid: Open AI is later. What I did is I went and made connections with the kind of the heads of every AI lab and major company because I concluded that I thought that the AI revolution will be primarily driven by large companies initially because of the scale compute requirements.And so, you know, talked to Demis Hassabis, met Mustafa Suleyman, talked to Yann LeCun, talked to Jeff Dean, you know, all these kind of folks and kind of, you know, built all that. And then it was later in conversations with Sam and Elon that I said, look, we need to do something that's a for pro humanity. Not just commercial effort. And my price for participation, cause I thought it was a great idea, but my price for participation was to ask Elon to stop saying the word robocalypse. Because I thought that the problem was that it's very catchy and it evokes fear. And actually, in fact, one of the things I think about this whole area is that it's so much more interesting and has so much amazing opportunity for humanity.A little bit like, I don't know if you saw the Atlantic article I wrote that we evolve ourselves through technology and I'm, you know, going to be doing some writings around describing AI as augmented intelligence versus artificial intelligence. And I wanted to kind of build that positive, optimistic case that I think is the higher probability that I think we can shape towards and so forth.So it's like, okay, I'm in, but no more Robocalypse.Eric: I appreciate the ultimate sort of network person that you tell the story through people. I always appreciate when the origin stories of technology actually come through the human beings. With Elon in particular, I'm sort of confused by his position because it seems like he's very afraid of AI.And if that's the case, why would you want to, like, do anything to sort of get the ball rolling down the hill? Like, isn't there a sort of just like, stay away from it, man, if you think it's so bad. How do you see his thinking? And I'm sure it's evolved.Reid: Well, I think his instinct for the good and the challenging of this is he tends to think AI will only be good if I'm the one who's in control.Eric: Sort of, yeah.Reid: Yeah. And this is actually somewhat replete within the modern AI field. Not everybody but this. And Elon is a public enough figure that I think, you know, making this comment of him is not talking at a school.Other people would, there's a surprising number of Messiah complexes in the field of AI, and, and it's the, I am the one who must bring this, you know, Prometheus, you know, the Fire to humanity. And you're like, okay, I kind of think it should be us, right? Versus an individual. Now us can't be 8 billion people, us as a small group, but I think more or less you see the, the folks who are steering with a moral compass try to say, how do I get at least 10 to 15 people beyond myself with their hands on the steering wheel in deep conversations in order to make sure you get there and then let, let's make sure that we're having the conversations with the right communities.Like if you say, well, is this going to, you know, institutionalize, ongoing, um, you know, power structures or racial bias, something else? Well, we're talking to the people to make sure that we're going to minimize that, especially over time and navigate it as a real issue. And so those are the, like, that's the kind of anti Messiah complex, which, which is more or less the efforts that I tend to get involved in.Eric: Right. At least sort of oligarchy, of AI control instead of just dictatorship of it.Reid: Well, yeah, and it depends a little bit, even on oligarchy, look, things are built by small numbers of people. It's just a fact, right? Like, there aren't more than, you know, a couple of founders, maybe maximum five in any, any particular thing. There is, you know, there's reasons why. When you have a construction project, you have a head of construction, right?Et cetera. The important thing is to make sure that's why you have, why you have a CEO, you have a board of directors. That's why you have, you know, you say, well, do we have the right thing where a person is accountable to a broader group? And that broader group feels their governance responsibility seriously.So oligarchy is a—Eric: a chargedReid: is a charged word. And I,Eric: There's a logic to it. I'm not, I'm not using it to say it doesn't make sense that you want the people to really understand it around, around it. Um, I mean, specifically with Open AI, I mean, you, you just stepped off the board. You're also on the board of Microsoft, which is obviously a very significant player.In this future, I mean, it's hard to be open. I get a little frustrated with the “open” in “Open AI” because I feel like there's a lot that I don't understand. I'm like, maybe they should change the name a little bit, but is it still a charity in your mind? I mean, it's obviously raised from Tiger Global, the ultimate prophet maker.Like, how should we think about the sort of core ambitions of Open AI?Reid: Well, um, one, the board I was on was a fine one and they've been very diligent about making sure that all of the controls, including for the subsidiary company are from the 501(C)(3) and diligent to its mission, which is staffed by people on the 501(C)(3) board with the responsibilities of being on a 5 0 1 board, which is being in service of the mission, not doing, you know, private inurement and other kinds of things.And so I actually think it is fundamentally still a 501(C)(3). The challenge is if you kind of say, you look at this and say, well, in order to be a successful player in the modern scale AI, you need to have billions of dollars of compute. Where do you get those billions of dollars? Because, you know, the foundations and the philanthropy industry is generally speaking bad at tech and bad at anything other than little tiny checks in tech.And so you said, well, it's really important to do this. So part of what I think, you know, Sam and that group of folks came up with this kind of clever thing to say, well, look, we're about beneficial AI, we're about AI for humanity. We're about making an, I'll make a comment on “open” in a second, but we are gonna generate some commercially valuable things.What if we struck a commercial deal? So you can have the commercial things or you can share the commercial things. You invest in us in order to do this, and then we make sure that the AI has the right characteristics. And then the “open”, you know, all short names have, you know, some simplicities to them.The idea is open to the world in terms of being able to use it and benefit from it. It doesn't mean the same thing as open source because AI is actually one of those things where opening, um, where you could do open source, you could actually be creating something dangerous. As a modern example, last year, Open AI deliberately… DALL·E 2 was ready four months before it went out. I know cause I was playing with it. They did the four months to do safety training and the kind of safety training is, well, let's make sure that individuals can't be libeled. Let's make sure you can't create as best we can, child sexual material. Let's make sure you can't do revenge porn and we'll serve it through the API and we'll make it unchangeable on that.And then the open source people come out and they go do whatever you want and then wow, you get all this crazy, terrible stuff. So “open” is openness of availability, but still with safety and still with, kind of call it the pro-human controls. And that's part of what OpenAI means in this.Eric: I wrote in sort of a mini essay in the newsletter about, like tech fatalism and it fits into your sort of messiah complex that you're talking about, if I'm a young or new startup entrepreneur, it's like this is my moment if I hold back, you know, there's a sense that somebody else is gonna do it too. This isn't necessarily research. Some of the tools are findable, so I need to do it. If somebody's going to, it's easy if you're using your own personhood to say, I'm better than that guy! Even if I have questions about it, I should do it. So that, I think we see that over and over again. Obviously the stakes with AI, I think we both agree are much larger.On the other hand, with AI, there's actually, in my view, been a little bit more restraint. I mean, Google has been a little slower. Facebook seems a little worried, like, I don't know. How do you agree with that sort of view of tech fatalism? Is there anything to be done about it or it's just sort of—if it's possible, it's gonna happen, so the best guy, the best team should do it?Or, or how do you think about that sense of inevitability on if it's possible, it'll be built?Reid: Well, one thing is you like edgy words, so what you describe is tech fatalism, I might say as something more like tech inevitability or tech destiny. And part of it is what, I guess what I would say is for example, we are now in a AI moment and era. There's global competition for it. It's scale compute.It's not something that even somebody like a Google or someone else can kind of have any kind of, real ball control on. But the way I look at it is, hey, look, there's, there's utopic outcomes and dystopic outcomes and it's within our control to steer it. Um, and even to steer it at speed, even under competition because.For example, obviously the general discourse within media is, oh my God, what's happening with the data and what's gonna happen with the bias and what's gonna happen with the crazy conversations, with Bing Chat and all the rest of this stuff. And you're like, well, what am I obsessed about? I'm obsessed about the fact that I have line of sight to an AI tutor and an AI doctor on every cell phone.And think about if you delay that, whatever number of years you delay that, what your human cost is of delaying that, right? And it's like, how do we get that? And for example, people say, wow, the real issue is that Bing chat model is gonna go off the rails and have a drunken cocktail party conversation because it's provoked to do so and can't run away from the person who's provoking it.Uh, and you say, well, is that the real issue? Or is it a real issue? Let's make sure that as many people as we can have access to that AI doctor have access to that AI tutor that where, where we can, where not only, you know, cause obviously technology cause it's expensive initially benefits elites and people are rich.And by the way, that's a natural way of how our capitalist system and all the rest works. But let's try to get it to everyone else as quickly as possible, right?Eric: I a hundred percent agree with that. So I don't want any of my sort of, cynical take like, oh my God, this version.I'd also extend it, you know, I think you're sort of referencing maybe the Sydney situation where you have Kevin Rus in New York Times, you know, communicating with Bing's version of ChatGPT and sort of finding this character who's sort of goes by Sydney from the origin story.And Ben Thompson sort of had a similar experience. And I would almost say it's sad for the world to be deprived of that too. You know, there's like a certain paranoia, it's like, it's like, oh, I wanna meet this sort of seemingly intelligent character. I don't know. What do you make of that whole episode? I mean, people really, I mean, Ben Thompson, smart tech writers really latched onto this as something that they found moving.I don't know. Is there anything you take away from that saga and do you think we'll see those sort of, I don't know, intelligent characters again,Reid: Well for sure. I think 2023 will be at least the first year of the so-called chatbot. Not just because of ChatGPT. And I think that we will have a bunch of different chat bots. I think we'll have chatbots that are there to be, you know, entertainment companions, witty dialogue participants.I think we'll have chatbots that are there to be information like Insta, Wikipedia, kind of things. I think we'll have chatbots that are there to just have someone to talk to. So I think there'll be a whole, whole range of things. And I think we will have all that experience.And I think part of the thing is to say, look, what are the parameters by which you should say the bots should absolutely not do X. And it's fine if these people want a bot that's like, you know, smack talking and these people want something that you know, goes, oh heck. Right?You know, like, what's, what's the range of that? And obviously children get in the mix and, and the questions around things that we already encounter a lot with search, which is like could a chat bot enable self-harm in a way that would be really bad?Let's really try to make sure that someone who's depressed doesn't figure out a way to harm themselves either with search or with chat bots.Eric: Is there a psychologically persuasive, so it's not just the information provided, it's the sense that they might be like walking you towards something less serious.Reid: And they are! This is the thing that's amazing. and it's part of the reason why like everyone should have some interaction with these in some emotional, tangible way. We are really passing the Turing test. This is the thing that I had visibility on a few years ago because I was like, okay, we kind of judge, you know, intelligence and sentience like that, Google engineers like it.I asked if it was conscious and it said it was because we use language as a way of doing that. And you're like, well, but look, that tells you that your language use is not quite fully there. And because part of what's really amazing about, “hallucinations”—and I'm probably gonna do a fireside chat with the gray matter thing on hallucinations, maybe later this week—where the hallucination is, on one hand it says this amazingly accurate, wonderful thing, very persuasively, and then it says this other thing really persuasively that's total fiction, right? And you're like, wow, you sound very persuasive in both cases. But that one's true and that one's fiction.And that's part of the reason why I kind of go back to the augmented intelligence and all the things that I see going on with in 2023 is much less replacement and much more augmentation. It's not zero replacement, but it's much more augmentation in terms of how this plays. And that is super exciting.Eric: Yeah. I mean, to some degree it reflects sort of the weakness in human beings' own abilities to read what's happening. Ahead of this interview, I was talking to the publicly available ChatGPT. I don't know if you saw but I was asking it for questions and I felt like it delivered a very reasonable set of questions. You know, you've written about Blitzscaling, so [ChatGPT] is like, let's ask about that. It's, you know, ask in the context of Microsoft. But when I was like, have you [ChatGPT] ever watched Joe Rogan? Have you ever been on a podcast? Sometimes maybe you should have a long sort of, you should have a statement like I'm doing right now where I sort of have some things I'm saying.Then I ask a question. Other times it should be short and sweet. Sometimes it, you know, annoys you and says oligarchy, like explaining to the chat bot. [In an interview, a journalist] can't just ask a list of like, straightforward questions and it felt like it didn't really even get that. And I get that there's some sort of, we're, we're starting to have a conversation now with companies like Jasper, where it's almost like the language prompting itself.I think Sam Altman was maybe saying it's like almost a form of plain language like coding because you have to figure out how to get what you want out of them. And maybe it was just my failure to explain it, but as a journalist replacing questions, I didn't find the current model of ChatGPT really capable of that.Reid: No, that's actually one of the things on the ChatGPT I find is, like, for example, you ask what questions to ask Reid Hoffman in a podcast interview, and you'll get some generic ones. It'll say like, well, what's going on with new technologies like AI and, and what's going on in Silicon Valley? And you know, and you're like, okay, sure.But those aren't the really interesting questions. That's not what makes me a great journalist, which is kind of a lens to something that people can learn from and that will evolve and change that'll get better. But that's again, one of the reasons why I think it's a people plus machine. Because for example, if I were to say, hey, what should I ask Eric about? Or what should I talk to Eric about and go to? Yeah, gimme some generic stuff. Now if I said, oh, give me a briefing on, um, call it, um, UN governance systems as they apply to AI, because I want to be able to talk about this. I didn't do this, but it would give me a kind of a quick Wikipedia briefing and that would make my conversation more interesting and I might be able to ask a question about the governance system or something, you know, as a way of doing it.And that's what AI is, I think why the combo is so great. Um, and anyway, so that's what we should be aiming towards. It isn't to say, by the way, sometimes like replacement is a good thing. For example, you go to autonomous vehicles and say, hey, look, if we could wave a wand and every car on the road today would be an autonomous vehicle, we'd probably save, we'd probably go from 40,000 deaths in the US per, you know, year to, you know, maybe a thousand or 2000. And you're like, you're shaving 38,000 lives a year, in doing this. It's a good thing. And, you know, it will have a positive vector on gridlocks and for climate change and all the rest of the stuff.And you go, okay, that replacement, yes, we have to navigate truck jobs and all the rest, but that replacement's good. But I think a lot of it is going to end up being, you know, kind of, various forms of amplification. Like if you get to journalists, you go, oh, it'll help me ask, figure out which interesting questions to add.Not because it'll just go here, here's your script to ask questions. But you can get better information to prep your thinking on it.Eric: Yeah. I'm glad you brought up like the self-driving car case and, you know, you're, are you still on the board of Aurora?Reid: I am.Eric: I've, you know, I covered Uber, so I was in their self-driving cars very early, and they made a lot of promises. Lyft made a lot of promises.I mean, I feel like part of my excitement about this sort of generative AI movement is that it feels like it doesn't require completeness in the same way that self-driving cars do. You know? And that, that, that's been a barrier to self-driving cars. On the flip side, you know, sometimes we sort of wave away the inaccuracy and then we say, you know, we sort of manage it.I think that's what we were sort of talking about earlier. You imagine it in some of the completeness that could come. So I guess the question here is just do you think, what I'm calling the completeness problem. I guess just the idea that it needs to be sort of fully capable will be an issue with the large language models or do you think you have this sort of augmented model where it could sort of stop now and still be extremely useful to much of society?Reid: I think it could stop now and be extremely useful. I've got line of sight on current technology for a tutor, for a doctor, for a bunch of other stuff. One of the things my partner and I wrote last year was that within five years, there's gonna be a co-pilot for every profession.The way to think about that is what professionals do. They process information, they take some kind of action. Sometimes that's generating other information, just like you see with Microsoft's co-pilot product for engineers. And what you can see happening with DallE and other image generation for graphic designers, you'll see this for every professional, that there will be a co-pilot on today's technology that can be built.That's really amazing. I do think that as you continue to make progress, you can potentially make them even more amazing, because part of what happened when you move from, you know, GPT3 to 3.5, which is all of a sudden it can write sonnets. Right? You didn't really know that it was gonna be able to write sonnets.That's giving people superpowers. Most people, including myself—I mean, look, I could write a sonnet if you gave me a couple of days and a lot of coffee and a lot of attempts to really try.Eric: But you wouldn't.Reid: You wouldn't. Yeah. But now I can go, oh, you know, I'd like to, to, um, write a sonnet about my friend Sam Altman.And I can go down and I can sit there and I can kind of type, you know, duh da, and I can generate, well, I don't like that one. Oh, but then I like this one, you know, and da da da. And, and that, that gives you superpowers. I mean, think about what you can do for writing, a whole variety of things with that. And that I think the more and more completeness is the word you are using is I think also a powerful thing. Even though what we have right now is amazing.Eric: Is GPT4 a big improvement over what we have? I assume you've seen a fair bit of unreleased, stuff. Like how hyped should we be about the improvement level?Reid: I have. I'm not really allowed to say very much about it cause, you know, part of the responsibilities of former board members and confidentiality. But I do think that it will be a nice—I think people will look at it and go, Ooh, that's cool. And it will be another iteration, another thing as amazing as ChatGPT has, and obviously that's kind of in the last few months. It's kind of taken the world by storm, opening up this vista of imagination and so forth.I think GPT4 will be another step forward where people will go, Ooh, that's, that, that's another cool thing. I think that's—can't be more specific than that, but watch this space cause it'll be cool.Eric: Throughout this conversation we've danced around this sort of artificial general intelligence question. starting with the discussion of Elon and the creation of eventually Open AI. I'm curious how close you think we are with AGI and this idea of a sort of, I mean, people define it so many different ways, you know, it's more sophisticated than humans in some tasks, you know, mini tasks, whatever.How, how do you think we're far from that? Or how, how, how do you see that playing out?Reid: Personally amongst a lot of the people who are in the field, I'm probably on the, we're-much-further-than-we-think stage. Now, some of that's because I've lived through this before with my undergraduate degree and the, you know, the pattern generally is, oh my God, we've gotten this computer to do this amazing thing that we thought was formally the provence of only these cognitive human beings.And it could do that. So then by the way, in 10 years it'll be solving new science problems like fusion and all the rest. And if you go back to the seventies, you saw that same dialogue. I mean, it, it's, it's an ongoing thing. Now we do have a more amazing set of cognitive capabilities than we did before, and there are some reasons to argue that it could be in a decade or two. Because you say, well, these large language models can enable coding and that coding can all, can then be self, reflective and generative, and that can then make something go. But when I look at the coding and how that works right now, it doesn't generate the kind of code that's like, oh, that's amazing new code.It helps with the, oh, I want to do a parser for quick sort, right? You know, like that kind of stuff. And it's like, okay, that's great. Or a systems integration use of an API or calling in an API for a spellchecker or whatever. Like it's really helpful stuff on engineers, but it's not like, oh my God, it's now inventing the new kind of training of large scale models techniques.And so I think even some of the great optimists will tell you of the great, like believers that it'll be soon and say there's one major invention. And the thing is, once you get to one major invention, is that one major invention? Is that three major inventions? Is it 10 major inventions?Like I think we are some number of major inventions away. I don't, I certainly don't think it's impossible to get there.Eric: Sorry. The major inventions are us human beings build, building things into the system or…?Reid: Yeah. Like for example, you know, can it do, like, for example, a classic, critique of a lot of large language models is can it do common sense reasoning.Eric: Gary Marcus is very…Reid: Exactly. Right. Exactly. And you know, the short answer right now is the large language models are approximating common sense reasoning.Now they're doing it in a powerful and interesting enough way that you're like, well, that's pretty useful. It's pretty helpful about what it's doing, but I agree that it's not yet doing all of that. And also you get problems like, you know, what are called one shot learning. Can you learn from one instance of it?Cause currently the training requires lots and lots of compute processing over days or in self play, can you have an accurate memory store that you update? Like for example, you say now fact X has happened, your entire world based on fact X. Look, there's a bunch of this stuff to all go.And the question is, is that one major invention is that, you know, five major inventions, and by the way, major inventions or major inventions even all the amazing stuff we've done over the last five to 10 years. Major inventions on major inventions. So I myself tend to be two things on the AGI one.I tend to think it's further than most people think. And I don't know if that further is it's 10 years versus five or 20 years versus 10 or 50 years versus 20. I don't, I don't really know.Eric: In your lifetime, do you think?Reid: It's possible, although I don't know. But let me give two other lenses I think on the AGI question cause the other thing that people tend to do is they tend to go, there's like this AI, which is technique machine learning, and there's totally just great, it's augmented intelligence and then there's AGI and who knows what happens with AGI.And you say, well first is AGI is a whole range of possible things. Like what if you said, Hey, I can build something that's the equivalent of a decent engineer or decent doctor, but to run it costs me $200 an hour and I have AGI? But it's $200 an hour. And you're like, okay, well that's cool and that means we can, we can get as many of them as we need. But it's expensive. And so it isn't like all of a sudden, you know, Terminator or you know, or inventing fusion or something like that is AGI and or a potential version of AGI. So what is AGI is the squishy thing that people then go, magic. The second thing is, the way that I've looked at the progress in the last five to eight years is we're building a set of iteratively better savants, right?It just like the chess player was a savant. Um, and, and the savants are interestingly different now. When does savant become a general intelligence and when might savant become a general super intelligence? I don't know. It's obviously a super intelligence already in some ways. Like for example, I wouldn't want to try to play, go against it and win, try to win.It's a super intelligence when it comes, right? But like okay, that's great cause in our perspective, having some savants like this that are super intelligence is really helpful to us. So, so the whole AGI discussion I think tends to go a little bit Hollywood-esque. You know, it's not terminator.Eric: I mean, there there is, there's a sort of argument that could be made. I mean, you know, humans are very human-centric about our beliefs and our intelligence, right? We don't have a theory of mind for other animals. It's very hard for us to prove that other species, you know, have some experience of consciousness like qualia or whatever.Reid: Very philosophically good use of a term by the way.Eric: Thank you. Um, I studied philosophy though. I've forgotten more than I remember. But, um, you know, I mean…Reid: Someday we'll figure out what it's like to be a bat. Probably not this time.Eric: Right, right, exactly. Is that, that's Nagel. If the machine's better than me at chess and go there, there's a level of I, you know, here I am saying it doesn't have an experience, but it, it's so much smarter than me in certain domains.I don't, I, the question is just like, it seems like humans are not capable of seeing what it's like to be a bat. So will we ever really be able to sort of convince ourselves that there's something that it's like to be, um, an AGI system?Reid: Well, I think the answer is um, yes, but it will require a bunch of sophistication. Like one of the things I think is really interesting about, um, as we anthropomorphize the world a little bit and I think some of this machine. Intelligence stuff will, will enable us to do that is, well what does it mean to understand X or, or, or, or no X or experience X or have qualia or whatever else.And right now what we do is we say, well it's some king of shadowy image from being human. So we tend to undercount like animals intelligence. And people tend to be surprised like, look, you know, some animals mate for life and everything else, they clearly have a theory of the world and it's clearly stuff we're doing.We go, ah, they don't have the same kind of consciousness we do. And you're like, well they certainly don't have the same kind of consciousness, but we're not doing a very good job of studying like what the, where it's similar in order it's different. And I think we're gonna need to broaden that out outcome to start saying, well, when you compare us and an eagle or a dolphin or a whale or a chimpanzee or a lion, you know, what are the similarities and and differences?And how this works. And um, and I think that will also then be, well, what happens when it's a silicon substrate? You know? Do we, do we think that consciousness requires a biological substrate? If so, why? Um, and, you know, part of how, of course we get to understand, um, each other's consciousness as we, we get this depth of experience.Where I realize is it isn't, you're just a puppet.Eric:  [laughs] I am, I am just a puppet.Reid: Well, we're, we're talking to each other through Riverside, so, you know, who knows, right. You know, deep fakes and all that.Eric: The AI's already ahead of you. You know, I'm just, it's already, no.Reid: Yeah. I think we're gonna have to get more sophisticated on that question now.I think it's, it's too trivial to say because it can mimic language in particularly interesting ways. And it says, yes, I'm conscious that that makes it conscious. Like that's not, that's not what we use as an instance. And, and part of it is like, do you understand the like part of how we've come to understand each other's consciousness is we realize that we experience things in similar ways.We feel joy in similar, we feel pain in similar ways and that kinda stuff. And that's part of how we begin to understand. And I think it'll be really good that this may kick off kind of us being slightly less kind of call it narcissistically, anthropocentric in this and a broader concept as we look at this.Eric: You know, I was talking to my therapist the other day and I was saying, you know, oh, I did this like kind gesture, but I didn't feel like some profound, like, I don't, it just seemed like the right thing to do. I did it. It felt like I did the right thing should, you know, shouldn't I feel like more around it?And you know, her perspective was much more like, oh, what matters is like doing the thing, not sort of your internal states about it. Which to me would, would go to the, if the machine can, can do all the things we expect from sort of a caring type type machine. Like why do we need to spend all this time when we don't even expect that of humans to always feel the right feelings.Reid: I totally agree with you. Look, I think the real question is what you do. Now that being said, part of how we predict what you do is that, you know, um, you may not have like at that moment gone, haha, I think of myself as really good cause I've done this kind thing. Which by the way, might be a better human thing as opposed to like, I'm doing this cause I'm better than most people.Eric: Right.Reid: Yeah, but it's the pattern in which you engage in these things and part of the feelings and so forth is cause that creates a kind of a reliability of pattern of do you see other people? Do you have the aspiration to have, not just yourself, but the people around you leading better and improving lives.And obviously if that's the behavior that we're seeing from these things, then that's a lot of it. And the only question is, what's that forward looking momentum on it? And I think amongst humans that comes to an intention, a model of the world and so forth. You know, amongst, amongst machines that mean just maybe the no, no, we're aligned.Well, like, we've done a really good alignment with human progress.Eric: Do you think there will be a point in time where it's like an ethical problem to unplug it? Like I think of like a bear, right? Like a bear is dangerous. You know, there are circumstances where pretty comfortable. Killing the bear,But if the bear like hasn't actually done anything, we've taken it under our care. Like we don't just like shoot bears at zoos, you know? Do you think there's a point where like, and it costs us money to sustain the bear at a zoo, do you think there are cases where we might say, oh man, now there's an ethical question around unpluggingReid: I think it's a when, not an if.Eric: Yeah.Reid: Right? I mean, it may be a when, once again, just like AGI, that's a fair way's out. But it's a when, not an if. And by the way, I think that's again, part of the progress that we make because we think about like, how should we be treating it? Because, you know, like for example, if you go back a hundred, 150 years, the whole concept of animal rights doesn't exist in humans.You know, it's like, hey, you wanna, you want to torture animal X to death, you know, like you're queer, but you're, you're, you're allowed to do that. That's an odd thing for you to do. And maybe it's kind of like, like distasteful, like grungy bad in some way, but , you know, it's like, okay. Where's now you're like, oh, that person is, is like going out to try to go torture animals! We should like get them in an institution, right? Like, that's not okay. You know, what is that further progress for the rights and lives? And I think it will ultimately come to things that we think are, when it gets to kind of like things that have their own agency and have their own consciousness and sets of existence.We should be including all of that in some, in some grand or elevated, you know, kind of rights conceptions.Eric: All right, so back back to my listeners who, you know, wanna know where to invest and make money off this and, you know.Reid: [laughs] It isn't from qualia and consciousness. Oh, wait.Eric: Who do you think are the key players? The key players in the models. Then obviously there are more sort of, I don't know if we're calling them vertical solutions or product oriented or whatever, however you think about them.But starting with the models, like who do you see as sort of the real players right now? Are you counting out a Google or do you think they'll still, you know, sort of show?Reid: Oh no. I think Google will show up. And obviously, you know, Open AI, Microsoft has done a ton of stuff. I co-founded Inflection last year with Mustafa Suleyman. We have a just amazing team and I do see a lot of teams, so I'm.Eric: And that's to build sort of the foundational…Reid: Yeah, they're gonna, well, they're building their own models and they're gonna build some things off those models.We haven't really said what they are yet. But that's obviously going to be kind of new models. Adept, another Greylock investment building its own models, Character is building its own models, Anthropic is building its own models. And Anthropic is, you know, Dario and the crew is smart folks from Open AI, they're, they're doing stuff within a kind of a similar research program that Open AI is doing.And so I think those are the ones that I probably most track.Eric: Character's an interesting case and you know, we're still learning more about that company. You know, I was first to report they're looking to raise 250 million. My understanding is that what's interesting is they're building the models, but then for a particular use case, right?Or like, it's really a question of leverage or like, do people need to build the models to be competitive or do you think there will be... can you build a great business on top of Stability or Open AI or do you need to do it yourself?Reid: I think you can, but the way you do it is you can't say it's cause I have unique access to the model. It has to be, you know, I have a business that has network effects or I'm well integrated in enterprise, or I have another deep stack of technology that I'm bringing into it. It can't just be, I'm a lightweight front end to it because then other people can be the lightweight front end.So you can build great businesses. I think with it, I do think that people will both build businesses off, you know, things like the Open AI APIs and I think people will also train models. Because I think one of the things that will definitely happen is a lot of… not just will large models be built in ways that are interesting and compelling, but I think a bunch of smaller models will be built that are specifically tuned and so forth.And there's all kinds of reasons. Everything from you can build them to do something very specific, but also like inference cost, does it, does it run on a low compute or low power footprint? You know, et cetera, et cetera. You know, AI doctor, AI tutor, um, you know, duh and on a cell phone. And, um, and so, you know, I think like all of that, I think the short answer to this is allEric: Right. Do you think we are in a compute arms race still, or do you, do you think this is gonna continue where it's just if you can raise a billion dollars to, to buy sort of com GPU access basically from Microsoft or Amazon or Google, you're, you're gonna be sort of pretty far ahead? Or how do you think about that sort of the money, the money and computing rates shaping up?Reid: So I kind of think about two. There's kind of two lines of trends. There's one line, which is the larger and larger models, which by the way, you say, well, okay, so does the scale compute and one x flop goes to two x flops, and does your performance function go up by that?And it doesn't have to go up by a hundred percent or, or two x or plus one x. It could go up by 25%, but sometimes that really matters. Coding doctors, you know, legal, other things. Well, it's like actually, in fact, it, even though it's twice as expensive, a 25% increase in, you know, twice as expensive of compute, the 25% increase in performance is worth it. And I think you then have a large scale model, like a set of things that are kind of going along need to be using the large scale models.Then I think there's a set of things that don't have that need. And for example, that's one of the reasons I wasn't really surprised at all by the profusion of image generation, cuz those are, you know, generally speaking, trainable for a million to $10 million. I think there's gonna be a range of those.I think, you know, maybe someone will figure out how to do, you know, a hundred-million version and once they figured out how to do a hundred-million dollar version, someone also figured out how to do the 30-million version of that hundred-million dollar version. And there's a second line going on where all of these other smaller models will fit into interesting businesses. And then I think a lot of people will either deploy an open source model that they're using themselves, train their own model, get a special deal with, like a model provider or something else as a way of doing it.And so I think the short answer is there will be both, and you have to be looking at this from what's the specific that this business is doing. You know, the classic issues of, you know, how do you go to market, how do you create a competitive mode? What are the things that give you real, enduring value that people will pay for in some way in a business?All of the, those questions still apply, but the, but, but there's gonna be a panoply of answers, depending on the different models of how it playsEric: Do you think spend on this space in terms of computing will be larger in ‘24 and then larger in 25?Reid: Yes. Unquestionably,Eric: We're on the, we're still on the rise.Reid: Oh, yes. Unquestionably.Eric: That's great for a certain company that you're on the board of.Reid: Well look, and it's not just great for Microsoft. There are these other ones, you know, AWS, Google, but…Eric: Right. It does feel like Amazon's somewhat sleepy here. Do you have any view there?Reid: Well, I think they have begun to realize, what I've heard from the market is that they've begun to realize that they should have some stuff here. I don't think they've yet gotten fully underway. I think they are trying to train some large language models themselves. I don't know if they've even realized that there is a skill to training those large language models, cause like, you know, sometimes people say, well, you just turn on and you run the, run the large language model, the, the training regime that you read in the papers and then you make stuff.We've seen a lot of failures, of people trying to build these things and failing to do so, so, you know, there's, there's an expertise that you learn in doing it as well. And so I think—Eric: Sorry to interrupt—if Microsoft is around Open AI and Google is around Anthropic, is Amazon gonna be around stability? That's sort of the question that I'll put out to the world. I don't know if you have.Reid: I certainly don't know anything. And in the case of, you know, very, very, very, um, a politely said, um, Anthropic and OpenAI have scale with huge models. Stability is all small models, so, hmm.Eric: Yeah. Interesting. I, I don't think I've asked you sort of directly about sort of stepping off the Open AI board. I mean, I would assume you would prefer to be on the board or…?Reid: Yeah. Well, so look, it was a funny thing because, um, you know, I was getting more and more requests from various Greylock portfolio companies cause we've been investing in AI stuff for over five years. Like real AI, not just the, we call it “software AI”, but actual AI companies.For a while and I was getting more and more requests to do it and I was like oh, you know, what I did before was, well here's the channel. Like here is the guy who, the person who handles the API request goes, go talk to them. Like, why can't you help me? I was like, well, I'm on the board.I have a responsibility to not be doing that. And then I realized that, oh s**t, it's gonna look more and more. Um, I might have a real conflict of interest here, even as we're really carefully navigating it and, and it was really important cause you know various forces are gonna kind of try to question the frankly, super deep integrity of Open AI.It's like, look, I, Sam, I think it might be best even though I remain a fan, an ally, um, to helping, I think it may be best for Open AI. And generally to step off a board to avoid a conflict of interest. And we talked about a bunch and said, okay, fine, we'll do it. And you know, I had dinner with Sam last night and most of what we were talking about was kind of the range of what's going on and what are the important things that open eyes need to solve? And how should we be interfacing with governments so that governments understand? What are the key things that, that, that should be in the mix? And what great future things for humanity are really important not to fumble in the, in the generally, like everyone going, oh, I'm worrying. And then I said, oh, I got a question for you. And he's like, yeah, okay. I'm like, now that I'm no longer on the board, could I ask you to personally look at unblocking, my portfolio company's thing to the API? Because I couldn't ever ask you that question before. Cause I would be unethical. But now I'm not on the board, so can I ask the question?He's like, sure, I'll look into it. I'm like, great, right? And that's the substance of it, which I never would've done before. But that wasn't why, I mean, obviously love Sam and the Open AI team.Eric: The fact that you're sort of a Democratic super donor was that in the calculus? Or, because I mean, we are seeing Republican… well, I didn't think that at all coming into this conversation, but just hearing what you're saying. Looking at it now, it feels like Republicans are like trying to find something to be angry about.Reid: WellEric: These AI things, I don't quite…Reid: The unfortunate thing about the, the most vociferous of the republican media ecosystem is they just invent fiction, like their hallucination full out.Eric: Right.Reid: I mean, it just like, I mean, the amount of just like, you know, 2020 election denial and all the rest, which you can tell from having their text released from Fox News that like, here are these people who are on camera going on where you have a question about, you know, what happened in the election.And they're texting each other going, oh my God, this is insane. This is a coup, you know, da da da. And you're like, okay. Anyway, so, so all like, they don't require truth to generate. Heat and friction. So that was, wasn't that no, no. It's just really, it's kind of the question of, when you're serving on a board, you have to understand what your mission is very deeply and, and to navigate it.And part of the 501(C)(3) boards is to say, look, obviously I contribute by being a board member and helping and navigate various circumstances and all the rest. And, you know, I can continue to be a counselor and an aid to the company not being on the board. And one of the things I think is gonna be very important for the next X years, for the entire world to know is that open AI takes its ethics super seriously,Eric: Right.Reid: As do I.Eric: Does that fit with having to invest? I mean, there are lots of companies that do great things. They have investors. I believe in companies probably more than personally I believe in charities to accomplish things. But the duality of OpenAI is extremely confusing. Like, was Greylock, did Greylock itself invest a lot or you invested early as an angel?Reid: I was the founding investor as an angel, as a, as a program related investment from my foundation. Because like I started, I was among the first people to make a philanthropic donation to Open AI. Just straight out, you know, here's a grant by Wednesday, then Sam and Crew came up with this idea for doing this commercial lp, and I said, look, I, I'll help and I have no idea if this will be an interesting economic investment.They didn't have a business plan, they didn't have a revenue plan, they didn't have a product plan. I brought it to Greylock. We talked about it and they said, look, we think this will be possibly a really interesting technology, but you know, part of our responsibility to our LPs, which you know, includes a whole bunch of universities and else we invest in businesses and there is no business plan.Eric: So is that the Khosla did? Khosla's like we invested wild things. Anyway, we don't care. That's sort of what Vinod wants to project anyway, so yeah.Reid: You know, yes, that's exactly the same. So I put them 50 and then he put in a, I think he was the only venture fund investing in that round. But like, there was no business plan, there was no revenue model, there was no go to market…Eric: Well, Sam basically says, someday we're gonna have AGI and we're gonna ask you how to make a bunch of money? Like, is he, that's a joke, right? Or like, how much is he joking?Reid: It's definitely, it's not a 100% joke and it's not a 0% joke. It's a question around, the mission is really about how do we get to AGI or as close to AGI as useful and to make it useful for humanity. And by the way, the closer you get to AGI, the more interesting technologies fall out, including the ability to have the technology itself solve various problems.So if you said, we have a business model problem, it's like, well ask the thing. Now, if you currently sit down and ask, you know, ChatGPT what the business model is, you'll get something pretty vague and generic that wouldn't get you a meeting with a venture capitalist because it's like “we will have ad supported”... you're like, okay. Right.Eric: Don't you have a company that's trying to do pitch decks now or something?Reid: Oh yeah, Tome. No, and it's awesome, but by the way, that's the right kind of thing. Because, because what it does is you say, hey, give me a set of tiles, together with images and graphics and things arguing X and then you start working with the AI to improve it. Say, oh, I need a slide that does this and I need a catchier headline here, and, and you know, da da da.And then you, and you know, obviously you can edit it yourself and so on. So that's the kind of amplification. Now you don't say, give me my business model, right?Eric: You're like, I have this business model, like articulate it.Reid: Exactly.Eric: Um, I, politics, I mean, I feel like we, we live through such like a… you know what I mean, I feel like Silicon Valley, you know, has like, worked on PE everybody be able to, you know, everybody can get along. There's sort of competition, but then you sort of still stay close to any, everybody like, you, you especially like are good, you know, you you are in the PayPal mafia with a lot of people who are fairly very conservative now.The Trump years broke that in some ways and particular, and that, yeah. So how did you maintain those relationships?I see headlines that say you're friends with Peter Thiel. What is, what's the state of your friendship with Peter Thiel and how, how did it survive?I guess the Trump years is the question.Reid: Well, I think the thing that Peter and I learned when we were undergraduate at Stanford together is it's very important to… cause we, you know, I was a lefty. He was a righty. We'd argue a lot to maintain conversation and to argue things. It's difficult to argue on things that feel existential and it's ethically challenged is things around Trump. You know, the, you know, Trump feels to be a corrosive asset upon our democracy that is disfiguring us and staining us to the world. And so to have a dispassionate argument about it is, it's challenging. And it ends up with some uneven ground and statements like, I can't believe you're f*****g saying that, as part of dialogue.But on the other hand, you know, maintaining dialogue is I think part of how we make progress as society. And I basically sympathetic to people as long as they are legitimately and earnestly and committed to the dialogue and discussion of truth between them and committed otherwise.And so, you know, there are folks from the PayPal years that I don't really spend much time talking to, right?. There are others that I do because that conversation about discovering who we are and who we should be is really important. And you can't allow your own position to be the definer.It almost goes back to what we were talking about, the AI side, which is make sure you're talking to other smart people who challenge you to make sure you're doing the right thing. And that's, I think, a good general life principle.Eric: Well, you know, I feel like part of what my dream of like the Silicon Valley world is that we have these, you know, we have, Twitter is like the open forum. We're having sincere sort of on the level debates, but then you see something like, you know, the…Reid: You don't think it's the modern Seinfeld show I got? Well, not Seinfeld, um, Springer, Jerry Springer.Eric: Yeah, that's, yeah. Right. But I just feel like the sort of like, if the arguments are on the level issue is my problem with some of the sort of, I don't know, Peter Theil arguments, that he's not actually publicly advancing his beliefs in a sincere way, and that that's almost more corrosive.Reid: Oh, that's totally corrosive. And as much as that's happening, it's terrible. And that's one of the things that I, um, you know, in conversations I have, I push people including Peter on a lot.Eric: Yeah. Are you still, are you still gonna donate a lot, or what was, what's your, are you as animated about the Democratic party and working through sort of donor channels at the moment?Reid: Well, what I would say is I think that we have a responsibility to try to make, like with, it's kind of the Spider-Man ethics. With power comes responsibility, with wealth comes responsibility, and you have to try to help contribute to… what is the better society that we should be living and navigating in?And so I stay committed on that basis. And I do think there are some really amazing people in the administration. I think Biden is kind of a good everyday guy.Eric: Yeah.Reid: In fact, good for trying to build bridges in the country. I think there are people like Secretary Raimondo and Secretary Buttigieg who are thinking intensely about technology and what should be done in the future.And I think there's other folks now, I think there's a bunch of folks on the democratic side that I think are more concerned with their demagoguery than they are with the right thing in society. And so I tend to be, you know, unsympathetic to, um, you know…Eric: I know, Michael Moritz, it's Sequoia, that oped sort of criticizing San Francisco government, you know, and there's, there's certainly this sort of woke critique of the Democratic Party. I'm curious if there's a piece of it sort of outside of he governance that you're…Reid: Well, the interesting thing about woke is like, well, we're anti woke. And you're like, well, don't you think being awake is a good thing? I mean, it's kind of a funny thing. Eric: And sort of the ill-defined nature of woke is like key to the allegation because it's like, what's the substantive thing you're saying there? And you know, I mean we we're seeing Elon tweet about race right now, which is sort of terrifying anyway.Reid: Yeah. I think the question on this stuff is to try to say, look, people have a lot of different views and a lot of different things and some of those views are, are bad, especially in kind of minority and need to be advocated against in various… part of why we like democracy is to have discourse.I'm very concerned about the status of public discourse. And obviously most people tend to focus that around social media, which obviously has some legitimate things that we need to talk about. But on the other hand, they don't track like these, like opinion shows on, like, Fox News that represent themselves implicitly as news shows and saying, man, this is the following thing.Like there's election fraud in 2020, and then when they're sued for the various forms of deformation, they say, we're just an entertainment show. We don't do anything like news. So we have that within that we are already struggling on a variety of these issues within society. and we, I think we need to sort them all out.Eric: Is there anything on the AI front that we missed or that you wanted to make sure to talk about? I think we covered so much great ground. Reid: And, and we can do it again, right. You know, it's all, it's great.Eric: I love it. This was all the things you're interested in and I'm interested in, so great. I really enjoyed having you on the podcast and thanks.Reid: Likewise. And, you know, I follow the stuff you do and it's, it's, it's cool and keep doing it. 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For the first episode of the Newcomer podcast, I sat down with Reid Hoffman — the PayPal mafia member, LinkedIn co-founder, Greylock partner, and Microsoft board member. Hoffman had just stepped off OpenAI's board of directors. Hoffman traced his interest in artificial intelligence back to a conversation with Elon Musk.“This kicked off, actually, in fact, with a dinner with Elon Musk years ago,” Hoffman said. Musk told Hoffman that he needed to dive into artificial intelligence during conversations about a decade ago. “This is part of how I operate,” Hoffman remembers. “Smart people from my network tell me things, and I go and do things. And so I dug into it and I'm like, ‘Oh, yes, we have another wave coming.'”This episode of Newcomer is brought to you by VantaSecurity is no longer a cost center — it's a strategic growth engine that sets your business apart. That means it's more important than ever to prove you handle customer data with the utmost integrity. But demonstrating your security and compliance can be time-consuming, tedious, and expensive. Until you use Vanta.Vanta's enterprise-ready Trust Management Platform empowers you to:* Centralize and scale your security program* Automate compliance for the most sought-after frameworks, including SOC 2, ISO 27001, and GDPR* Earn and maintain the trust of customers and vendors alikeWith Vanta, you can save up to 400 hours and 85% of costs. Win more deals and enable growth quickly, easily, and without breaking the bank.For a limited time, Newcomer listeners get $1,000 off Vanta. Go to vanta.com/newcomer to get started.Why I Wanted to Talk to Reid Hoffman & What I Took AwayHoffman is a social network personified. Even his journey to something as wonky as artificial intelligence is told through his connections with people. In a world of algorithms and code, Hoffman is upfront about the extent to which human connections decide Silicon Valley's trajectory. (Of course they are paired with profound technological developments that are far larger than any one person or network.)When it comes to the rapidly developing future powered by large language models, a big question in my mind is who exactly decides how these language models work? Sydney appeared in Microsoft Bing and then disappeared. Microsoft executives can dispatch our favorite hallucinations without public input. Meanwhile, masses of images can be gobbled up without asking their creators and then the resulting image generation tools can be open-sourced to the world. It feels like AI super powers come and go with little notice. It's a world full of contradictions. There's constant talk of utopias and dystopias and yet startups are raising conventional venture capital financing.The most prominent player in artificial intelligence — OpenAI — is a non-profit that raised from Tiger Global. It celebrates its openness in its name and yet competes with companies whose technology is actually open-sourced. OpenAI's governance structure and priorities largely remain a mystery. Finally, unlike tech's conservative billionaires who throw their money into politics, in the case of Hoffman, here is a tech overlord that I seem to mostly agree with politically. I wanted to know what that would be like. Is it just good marketing? And where exactly is his heart and political head at right now?I thought he delivered. I didn't feel like he was dodging my questions, even in a world where maintaining such a wide network requires diplomacy. Hoffman seemed eager and open — even if he started to bristle at what he called my “edgy words.”Some Favorite QuotesWe covered a lot of ground in our conversation. We talked about AI sentience and humans' failures to identify consciousness within non-human beings. We talked about the coming rise in AI cloud compute spending and how Microsoft, Google, and Amazon are positioned in the AI race.Hoffman said he had one major condition for getting involved in OpenAI back in the early days when Musk was still on board.“My price for participation was to ask Elon to stop saying the word “robocalypse,” Hoffman told me. “Because I thought that the problem was it's very catchy and it evokes fear.”I asked Hoffman why he thought Musk got involved in artificial intelligence in the first place when Musk seems so worried about how it might develop. Why get the ball rolling down the hill at all, I wondered?Hoffman replied that many people in the field of artificial intelligence had “messiah complexes.”“It's the I am the one who must bring this — Prometheus, the fire to humanity,” Hoffman said. “And you're like, ‘Okay, I kind of think it should be us versus an individual.'” He went on, “Now, us can't be 8 billion people — us is a small group. But I think, more or less, you see the folks who are steering with a moral compass try to say, how do I get at least 10 to 15 people beyond myself with their hands on the steering wheel in deep conversations in order to make sure you get there? And then let's make sure that we're having the conversations with the right communities.”I raised the possibility that this merely suggested oligarchic control of artificial intelligence rather than dictatorial control. We also discussed Hoffman's politics, including his thoughts on Joe Biden and “woke” politics. I asked him about the state of his friendship with fellow PayPal mafia member Peter Thiel. “I basically am sympathetic to people as long as they are legitimately and earnestly committed to the dialogue and discussion of truth between them and not committed otherwise,” Hoffman said. “There are folks from the PayPal years that I don't really spend much time talking to. There are others that I do continue because that conversation about discovering who we are and who we should be is really important. And you can't allow your own position to be the definer.”I suggested that Thiel's public views sometimes seemed insincere.“Oh, that's totally corrosive,” Hoffman said. “And as much as that's happening, it's terrible. And that's one of the things that in conversations I have, I push people, including Peter, on a lot.”Give it a listen.Find the PodcastRead the TranscriptEric: Reid, thank you so much for coming on the show. I'm very excited for this conversation. You know, I'm getting ready for my own AI conference at the end of this month, so hopefully this is sort of a prep by the end of this conversation, we'll all be super smart and ready for that. I feel like there've been so many rounds of sort of AI as sort of the buzzword of the day.This clearly seems the hottest. When did you get into this moment of it? I mean, obviously you just stepped off the Open AI board. You were on that board. Like how, when did you start to see this movement that we're experiencing right now coming.Reid: Well, it's funny because my undergraduate major was artificial intelligence and cognitive science. So I've, I've been around the hoop for multiple waves for a long time and I think this kicked off actually, in fact, with a dinner with Elon Musk years ago. You know, 10-ish years ago, Elon and I would have dinner about once a quarter and he's like, well, are you paying attention to this AI stuff?And I'm like, well, I majored in it and you know, I know about this stuff. He's like, no, you need to get back involved. And I was like, all right. This is part of how I operate is smart people from my network tell me things and I go and do things. And so I dug into it and I went, oh yes, we have another wave coming.And this was probably about seven or eight years ago, when I, when I saw the beginning of the wave or the seismic event. Maybe it was a seismic event out at sea and I was like, okay, there's gonna be a tsunami here and we should start getting ready cause the tsunami is actually gonna be amazingly great and interesting.Eric: And that—is that the beginning of Open AI?Reid: Open AI is later. What I did is I went and made connections with the kind of the heads of every AI lab and major company because I concluded that I thought that the AI revolution will be primarily driven by large companies initially because of the scale compute requirements.And so, you know, talked to Demis Hassabis, met Mustafa Suleyman, talked to Yann LeCun, talked to Jeff Dean, you know, all these kind of folks and kind of, you know, built all that. And then it was later in conversations with Sam and Elon that I said, look, we need to do something that's a for pro humanity. Not just commercial effort. And my price for participation, cause I thought it was a great idea, but my price for participation was to ask Elon to stop saying the word robocalypse. Because I thought that the problem was that it's very catchy and it evokes fear. And actually, in fact, one of the things I think about this whole area is that it's so much more interesting and has so much amazing opportunity for humanity.A little bit like, I don't know if you saw the Atlantic article I wrote that we evolve ourselves through technology and I'm, you know, going to be doing some writings around describing AI as augmented intelligence versus artificial intelligence. And I wanted to kind of build that positive, optimistic case that I think is the higher probability that I think we can shape towards and so forth.So it's like, okay, I'm in, but no more Robocalypse.Eric: I appreciate the ultimate sort of network person that you tell the story through people. I always appreciate when the origin stories of technology actually come through the human beings. With Elon in particular, I'm sort of confused by his position because it seems like he's very afraid of AI.And if that's the case, why would you want to, like, do anything to sort of get the ball rolling down the hill? Like, isn't there a sort of just like, stay away from it, man, if you think it's so bad. How do you see his thinking? And I'm sure it's evolved.Reid: Well, I think his instinct for the good and the challenging of this is he tends to think AI will only be good if I'm the one who's in control.Eric: Sort of, yeah.Reid: Yeah. And this is actually somewhat replete within the modern AI field. Not everybody but this. And Elon is a public enough figure that I think, you know, making this comment of him is not talking at a school.Other people would, there's a surprising number of Messiah complexes in the field of AI, and, and it's the, I am the one who must bring this, you know, Prometheus, you know, the Fire to humanity. And you're like, okay, I kind of think it should be us, right? Versus an individual. Now us can't be 8 billion people, us as a small group, but I think more or less you see the, the folks who are steering with a moral compass try to say, how do I get at least 10 to 15 people beyond myself with their hands on the steering wheel in deep conversations in order to make sure you get there and then let, let's make sure that we're having the conversations with the right communities.Like if you say, well, is this going to, you know, institutionalize, ongoing, um, you know, power structures or racial bias, something else? Well, we're talking to the people to make sure that we're going to minimize that, especially over time and navigate it as a real issue. And so those are the, like, that's the kind of anti Messiah complex, which, which is more or less the efforts that I tend to get involved in.Eric: Right. At least sort of oligarchy, of AI control instead of just dictatorship of it.Reid: Well, yeah, and it depends a little bit, even on oligarchy, look, things are built by small numbers of people. It's just a fact, right? Like, there aren't more than, you know, a couple of founders, maybe maximum five in any, any particular thing. There is, you know, there's reasons why. When you have a construction project, you have a head of construction, right?Et cetera. The important thing is to make sure that's why you have, why you have a CEO, you have a board of directors. That's why you have, you know, you say, well, do we have the right thing where a person is accountable to a broader group? And that broader group feels their governance responsibility seriously.So oligarchy is a—Eric: a chargedReid: is a charged word. And I,Eric: There's a logic to it. I'm not, I'm not using it to say it doesn't make sense that you want the people to really understand it around, around it. Um, I mean, specifically with Open AI, I mean, you, you just stepped off the board. You're also on the board of Microsoft, which is obviously a very significant player.In this future, I mean, it's hard to be open. I get a little frustrated with the “open” in “Open AI” because I feel like there's a lot that I don't understand. I'm like, maybe they should change the name a little bit, but is it still a charity in your mind? I mean, it's obviously raised from Tiger Global, the ultimate prophet maker.Like, how should we think about the sort of core ambitions of Open AI?Reid: Well, um, one, the board I was on was a fine one and they've been very diligent about making sure that all of the controls, including for the subsidiary company are from the 501(C)(3) and diligent to its mission, which is staffed by people on the 501(C)(3) board with the responsibilities of being on a 5 0 1 board, which is being in service of the mission, not doing, you know, private inurement and other kinds of things.And so I actually think it is fundamentally still a 501(C)(3). The challenge is if you kind of say, you look at this and say, well, in order to be a successful player in the modern scale AI, you need to have billions of dollars of compute. Where do you get those billions of dollars? Because, you know, the foundations and the philanthropy industry is generally speaking bad at tech and bad at anything other than little tiny checks in tech.And so you said, well, it's really important to do this. So part of what I think, you know, Sam and that group of folks came up with this kind of clever thing to say, well, look, we're about beneficial AI, we're about AI for humanity. We're about making an, I'll make a comment on “open” in a second, but we are gonna generate some commercially valuable things.What if we struck a commercial deal? So you can have the commercial things or you can share the commercial things. You invest in us in order to do this, and then we make sure that the AI has the right characteristics. And then the “open”, you know, all short names have, you know, some simplicities to them.The idea is open to the world in terms of being able to use it and benefit from it. It doesn't mean the same thing as open source because AI is actually one of those things where opening, um, where you could do open source, you could actually be creating something dangerous. As a modern example, last year, Open AI deliberately… DALL·E 2 was ready four months before it went out. I know cause I was playing with it. They did the four months to do safety training and the kind of safety training is, well, let's make sure that individuals can't be libeled. Let's make sure you can't create as best we can, child sexual material. Let's make sure you can't do revenge porn and we'll serve it through the API and we'll make it unchangeable on that.And then the open source people come out and they go do whatever you want and then wow, you get all this crazy, terrible stuff. So “open” is openness of availability, but still with safety and still with, kind of call it the pro-human controls. And that's part of what OpenAI means in this.Eric: I wrote in sort of a mini essay in the newsletter about, like tech fatalism and it fits into your sort of messiah complex that you're talking about, if I'm a young or new startup entrepreneur, it's like this is my moment if I hold back, you know, there's a sense that somebody else is gonna do it too. This isn't necessarily research. Some of the tools are findable, so I need to do it. If somebody's going to, it's easy if you're using your own personhood to say, I'm better than that guy! Even if I have questions about it, I should do it. So that, I think we see that over and over again. Obviously the stakes with AI, I think we both agree are much larger.On the other hand, with AI, there's actually, in my view, been a little bit more restraint. I mean, Google has been a little slower. Facebook seems a little worried, like, I don't know. How do you agree with that sort of view of tech fatalism? Is there anything to be done about it or it's just sort of—if it's possible, it's gonna happen, so the best guy, the best team should do it?Or, or how do you think about that sense of inevitability on if it's possible, it'll be built?Reid: Well, one thing is you like edgy words, so what you describe is tech fatalism, I might say as something more like tech inevitability or tech destiny. And part of it is what, I guess what I would say is for example, we are now in a AI moment and era. There's global competition for it. It's scale compute.It's not something that even somebody like a Google or someone else can kind of have any kind of, real ball control on. But the way I look at it is, hey, look, there's, there's utopic outcomes and dystopic outcomes and it's within our control to steer it. Um, and even to steer it at speed, even under competition because.For example, obviously the general discourse within media is, oh my God, what's happening with the data and what's gonna happen with the bias and what's gonna happen with the crazy conversations, with Bing Chat and all the rest of this stuff. And you're like, well, what am I obsessed about? I'm obsessed about the fact that I have line of sight to an AI tutor and an AI doctor on every cell phone.And think about if you delay that, whatever number of years you delay that, what your human cost is of delaying that, right? And it's like, how do we get that? And for example, people say, wow, the real issue is that Bing chat model is gonna go off the rails and have a drunken cocktail party conversation because it's provoked to do so and can't run away from the person who's provoking it.Uh, and you say, well, is that the real issue? Or is it a real issue? Let's make sure that as many people as we can have access to that AI doctor have access to that AI tutor that where, where we can, where not only, you know, cause obviously technology cause it's expensive initially benefits elites and people are rich.And by the way, that's a natural way of how our capitalist system and all the rest works. But let's try to get it to everyone else as quickly as possible, right?Eric: I a hundred percent agree with that. So I don't want any of my sort of, cynical take like, oh my God, this version.I'd also extend it, you know, I think you're sort of referencing maybe the Sydney situation where you have Kevin Rus in New York Times, you know, communicating with Bing's version of ChatGPT and sort of finding this character who's sort of goes by Sydney from the origin story.And Ben Thompson sort of had a similar experience. And I would almost say it's sad for the world to be deprived of that too. You know, there's like a certain paranoia, it's like, it's like, oh, I wanna meet this sort of seemingly intelligent character. I don't know. What do you make of that whole episode? I mean, people really, I mean, Ben Thompson, smart tech writers really latched onto this as something that they found moving.I don't know. Is there anything you take away from that saga and do you think we'll see those sort of, I don't know, intelligent characters again,Reid: Well for sure. I think 2023 will be at least the first year of the so-called chatbot. Not just because of ChatGPT. And I think that we will have a bunch of different chat bots. I think we'll have chatbots that are there to be, you know, entertainment companions, witty dialogue participants.I think we'll have chatbots that are there to be information like Insta, Wikipedia, kind of things. I think we'll have chatbots that are there to just have someone to talk to. So I think there'll be a whole, whole range of things. And I think we will have all that experience.And I think part of the thing is to say, look, what are the parameters by which you should say the bots should absolutely not do X. And it's fine if these people want a bot that's like, you know, smack talking and these people want something that you know, goes, oh heck. Right?You know, like, what's, what's the range of that? And obviously children get in the mix and, and the questions around things that we already encounter a lot with search, which is like could a chat bot enable self-harm in a way that would be really bad?Let's really try to make sure that someone who's depressed doesn't figure out a way to harm themselves either with search or with chat bots.Eric: Is there a psychologically persuasive, so it's not just the information provided, it's the sense that they might be like walking you towards something less serious.Reid: And they are! This is the thing that's amazing. and it's part of the reason why like everyone should have some interaction with these in some emotional, tangible way. We are really passing the Turing test. This is the thing that I had visibility on a few years ago because I was like, okay, we kind of judge, you know, intelligence and sentience like that, Google engineers like it.I asked if it was conscious and it said it was because we use language as a way of doing that. And you're like, well, but look, that tells you that your language use is not quite fully there. And because part of what's really amazing about, “hallucinations”—and I'm probably gonna do a fireside chat with the gray matter thing on hallucinations, maybe later this week—where the hallucination is, on one hand it says this amazingly accurate, wonderful thing, very persuasively, and then it says this other thing really persuasively that's total fiction, right? And you're like, wow, you sound very persuasive in both cases. But that one's true and that one's fiction.And that's part of the reason why I kind of go back to the augmented intelligence and all the things that I see going on with in 2023 is much less replacement and much more augmentation. It's not zero replacement, but it's much more augmentation in terms of how this plays. And that is super exciting.Eric: Yeah. I mean, to some degree it reflects sort of the weakness in human beings' own abilities to read what's happening. Ahead of this interview, I was talking to the publicly available ChatGPT. I don't know if you saw but I was asking it for questions and I felt like it delivered a very reasonable set of questions. You know, you've written about Blitzscaling, so [ChatGPT] is like, let's ask about that. It's, you know, ask in the context of Microsoft. But when I was like, have you [ChatGPT] ever watched Joe Rogan? Have you ever been on a podcast? Sometimes maybe you should have a long sort of, you should have a statement like I'm doing right now where I sort of have some things I'm saying.Then I ask a question. Other times it should be short and sweet. Sometimes it, you know, annoys you and says oligarchy, like explaining to the chat bot. [In an interview, a journalist] can't just ask a list of like, straightforward questions and it felt like it didn't really even get that. And I get that there's some sort of, we're, we're starting to have a conversation now with companies like Jasper, where it's almost like the language prompting itself.I think Sam Altman was maybe saying it's like almost a form of plain language like coding because you have to figure out how to get what you want out of them. And maybe it was just my failure to explain it, but as a journalist replacing questions, I didn't find the current model of ChatGPT really capable of that.Reid: No, that's actually one of the things on the ChatGPT I find is, like, for example, you ask what questions to ask Reid Hoffman in a podcast interview, and you'll get some generic ones. It'll say like, well, what's going on with new technologies like AI and, and what's going on in Silicon Valley? And you know, and you're like, okay, sure.But those aren't the really interesting questions. That's not what makes me a great journalist, which is kind of a lens to something that people can learn from and that will evolve and change that'll get better. But that's again, one of the reasons why I think it's a people plus machine. Because for example, if I were to say, hey, what should I ask Eric about? Or what should I talk to Eric about and go to? Yeah, gimme some generic stuff. Now if I said, oh, give me a briefing on, um, call it, um, UN governance systems as they apply to AI, because I want to be able to talk about this. I didn't do this, but it would give me a kind of a quick Wikipedia briefing and that would make my conversation more interesting and I might be able to ask a question about the governance system or something, you know, as a way of doing it.And that's what AI is, I think why the combo is so great. Um, and anyway, so that's what we should be aiming towards. It isn't to say, by the way, sometimes like replacement is a good thing. For example, you go to autonomous vehicles and say, hey, look, if we could wave a wand and every car on the road today would be an autonomous vehicle, we'd probably save, we'd probably go from 40,000 deaths in the US per, you know, year to, you know, maybe a thousand or 2000. And you're like, you're shaving 38,000 lives a year, in doing this. It's a good thing. And, you know, it will have a positive vector on gridlocks and for climate change and all the rest of the stuff.And you go, okay, that replacement, yes, we have to navigate truck jobs and all the rest, but that replacement's good. But I think a lot of it is going to end up being, you know, kind of, various forms of amplification. Like if you get to journalists, you go, oh, it'll help me ask, figure out which interesting questions to add.Not because it'll just go here, here's your script to ask questions. But you can get better information to prep your thinking on it.Eric: Yeah. I'm glad you brought up like the self-driving car case and, you know, you're, are you still on the board of Aurora?Reid: I am.Eric: I've, you know, I covered Uber, so I was in their self-driving cars very early, and they made a lot of promises. Lyft made a lot of promises.I mean, I feel like part of my excitement about this sort of generative AI movement is that it feels like it doesn't require completeness in the same way that self-driving cars do. You know? And that, that, that's been a barrier to self-driving cars. On the flip side, you know, sometimes we sort of wave away the inaccuracy and then we say, you know, we sort of manage it.I think that's what we were sort of talking about earlier. You imagine it in some of the completeness that could come. So I guess the question here is just do you think, what I'm calling the completeness problem. I guess just the idea that it needs to be sort of fully capable will be an issue with the large language models or do you think you have this sort of augmented model where it could sort of stop now and still be extremely useful to much of society?Reid: I think it could stop now and be extremely useful. I've got line of sight on current technology for a tutor, for a doctor, for a bunch of other stuff. One of the things my partner and I wrote last year was that within five years, there's gonna be a co-pilot for every profession.The way to think about that is what professionals do. They process information, they take some kind of action. Sometimes that's generating other information, just like you see with Microsoft's co-pilot product for engineers. And what you can see happening with DallE and other image generation for graphic designers, you'll see this for every professional, that there will be a co-pilot on today's technology that can be built.That's really amazing. I do think that as you continue to make progress, you can potentially make them even more amazing, because part of what happened when you move from, you know, GPT3 to 3.5, which is all of a sudden it can write sonnets. Right? You didn't really know that it was gonna be able to write sonnets.That's giving people superpowers. Most people, including myself—I mean, look, I could write a sonnet if you gave me a couple of days and a lot of coffee and a lot of attempts to really try.Eric: But you wouldn't.Reid: You wouldn't. Yeah. But now I can go, oh, you know, I'd like to, to, um, write a sonnet about my friend Sam Altman.And I can go down and I can sit there and I can kind of type, you know, duh da, and I can generate, well, I don't like that one. Oh, but then I like this one, you know, and da da da. And, and that, that gives you superpowers. I mean, think about what you can do for writing, a whole variety of things with that. And that I think the more and more completeness is the word you are using is I think also a powerful thing. Even though what we have right now is amazing.Eric: Is GPT4 a big improvement over what we have? I assume you've seen a fair bit of unreleased, stuff. Like how hyped should we be about the improvement level?Reid: I have. I'm not really allowed to say very much about it cause, you know, part of the responsibilities of former board members and confidentiality. But I do think that it will be a nice—I think people will look at it and go, Ooh, that's cool. And it will be another iteration, another thing as amazing as ChatGPT has, and obviously that's kind of in the last few months. It's kind of taken the world by storm, opening up this vista of imagination and so forth.I think GPT4 will be another step forward where people will go, Ooh, that's, that, that's another cool thing. I think that's—can't be more specific than that, but watch this space cause it'll be cool.Eric: Throughout this conversation we've danced around this sort of artificial general intelligence question. starting with the discussion of Elon and the creation of eventually Open AI. I'm curious how close you think we are with AGI and this idea of a sort of, I mean, people define it so many different ways, you know, it's more sophisticated than humans in some tasks, you know, mini tasks, whatever.How, how do you think we're far from that? Or how, how, how do you see that playing out?Reid: Personally amongst a lot of the people who are in the field, I'm probably on the, we're-much-further-than-we-think stage. Now, some of that's because I've lived through this before with my undergraduate degree and the, you know, the pattern generally is, oh my God, we've gotten this computer to do this amazing thing that we thought was formally the provence of only these cognitive human beings.And it could do that. So then by the way, in 10 years it'll be solving new science problems like fusion and all the rest. And if you go back to the seventies, you saw that same dialogue. I mean, it, it's, it's an ongoing thing. Now we do have a more amazing set of cognitive capabilities than we did before, and there are some reasons to argue that it could be in a decade or two. Because you say, well, these large language models can enable coding and that coding can all, can then be self, reflective and generative, and that can then make something go. But when I look at the coding and how that works right now, it doesn't generate the kind of code that's like, oh, that's amazing new code.It helps with the, oh, I want to do a parser for quick sort, right? You know, like that kind of stuff. And it's like, okay, that's great. Or a systems integration use of an API or calling in an API for a spellchecker or whatever. Like it's really helpful stuff on engineers, but it's not like, oh my God, it's now inventing the new kind of training of large scale models techniques.And so I think even some of the great optimists will tell you of the great, like believers that it'll be soon and say there's one major invention. And the thing is, once you get to one major invention, is that one major invention? Is that three major inventions? Is it 10 major inventions?Like I think we are some number of major inventions away. I don't, I certainly don't think it's impossible to get there.Eric: Sorry. The major inventions are us human beings build, building things into the system or…?Reid: Yeah. Like for example, you know, can it do, like, for example, a classic, critique of a lot of large language models is can it do common sense reasoning.Eric: Gary Marcus is very…Reid: Exactly. Right. Exactly. And you know, the short answer right now is the large language models are approximating common sense reasoning.Now they're doing it in a powerful and interesting enough way that you're like, well, that's pretty useful. It's pretty helpful about what it's doing, but I agree that it's not yet doing all of that. And also you get problems like, you know, what are called one shot learning. Can you learn from one instance of it?Cause currently the training requires lots and lots of compute processing over days or in self play, can you have an accurate memory store that you update? Like for example, you say now fact X has happened, your entire world based on fact X. Look, there's a bunch of this stuff to all go.And the question is, is that one major invention is that, you know, five major inventions, and by the way, major inventions or major inventions even all the amazing stuff we've done over the last five to 10 years. Major inventions on major inventions. So I myself tend to be two things on the AGI one.I tend to think it's further than most people think. And I don't know if that further is it's 10 years versus five or 20 years versus 10 or 50 years versus 20. I don't, I don't really know.Eric: In your lifetime, do you think?Reid: It's possible, although I don't know. But let me give two other lenses I think on the AGI question cause the other thing that people tend to do is they tend to go, there's like this AI, which is technique machine learning, and there's totally just great, it's augmented intelligence and then there's AGI and who knows what happens with AGI.And you say, well first is AGI is a whole range of possible things. Like what if you said, Hey, I can build something that's the equivalent of a decent engineer or decent doctor, but to run it costs me $200 an hour and I have AGI? But it's $200 an hour. And you're like, okay, well that's cool and that means we can, we can get as many of them as we need. But it's expensive. And so it isn't like all of a sudden, you know, Terminator or you know, or inventing fusion or something like that is AGI and or a potential version of AGI. So what is AGI is the squishy thing that people then go, magic. The second thing is, the way that I've looked at the progress in the last five to eight years is we're building a set of iteratively better savants, right?It just like the chess player was a savant. Um, and, and the savants are interestingly different now. When does savant become a general intelligence and when might savant become a general super intelligence? I don't know. It's obviously a super intelligence already in some ways. Like for example, I wouldn't want to try to play, go against it and win, try to win.It's a super intelligence when it comes, right? But like okay, that's great cause in our perspective, having some savants like this that are super intelligence is really helpful to us. So, so the whole AGI discussion I think tends to go a little bit Hollywood-esque. You know, it's not terminator.Eric: I mean, there there is, there's a sort of argument that could be made. I mean, you know, humans are very human-centric about our beliefs and our intelligence, right? We don't have a theory of mind for other animals. It's very hard for us to prove that other species, you know, have some experience of consciousness like qualia or whatever.Reid: Very philosophically good use of a term by the way.Eric: Thank you. Um, I studied philosophy though. I've forgotten more than I remember. But, um, you know, I mean…Reid: Someday we'll figure out what it's like to be a bat. Probably not this time.Eric: Right, right, exactly. Is that, that's Nagel. If the machine's better than me at chess and go there, there's a level of I, you know, here I am saying it doesn't have an experience, but it, it's so much smarter than me in certain domains.I don't, I, the question is just like, it seems like humans are not capable of seeing what it's like to be a bat. So will we ever really be able to sort of convince ourselves that there's something that it's like to be, um, an AGI system?Reid: Well, I think the answer is um, yes, but it will require a bunch of sophistication. Like one of the things I think is really interesting about, um, as we anthropomorphize the world a little bit and I think some of this machine. Intelligence stuff will, will enable us to do that is, well what does it mean to understand X or, or, or, or no X or experience X or have qualia or whatever else.And right now what we do is we say, well it's some king of shadowy image from being human. So we tend to undercount like animals intelligence. And people tend to be surprised like, look, you know, some animals mate for life and everything else, they clearly have a theory of the world and it's clearly stuff we're doing.We go, ah, they don't have the same kind of consciousness we do. And you're like, well they certainly don't have the same kind of consciousness, but we're not doing a very good job of studying like what the, where it's similar in order it's different. And I think we're gonna need to broaden that out outcome to start saying, well, when you compare us and an eagle or a dolphin or a whale or a chimpanzee or a lion, you know, what are the similarities and and differences?And how this works. And um, and I think that will also then be, well, what happens when it's a silicon substrate? You know? Do we, do we think that consciousness requires a biological substrate? If so, why? Um, and, you know, part of how, of course we get to understand, um, each other's consciousness as we, we get this depth of experience.Where I realize is it isn't, you're just a puppet.Eric:  [laughs] I am, I am just a puppet.Reid: Well, we're, we're talking to each other through Riverside, so, you know, who knows, right. You know, deep fakes and all that.Eric: The AI's already ahead of you. You know, I'm just, it's already, no.Reid: Yeah. I think we're gonna have to get more sophisticated on that question now.I think it's, it's too trivial to say because it can mimic language in particularly interesting ways. And it says, yes, I'm conscious that that makes it conscious. Like that's not, that's not what we use as an instance. And, and part of it is like, do you understand the like part of how we've come to understand each other's consciousness is we realize that we experience things in similar ways.We feel joy in similar, we feel pain in similar ways and that kinda stuff. And that's part of how we begin to understand. And I think it'll be really good that this may kick off kind of us being slightly less kind of call it narcissistically, anthropocentric in this and a broader concept as we look at this.Eric: You know, I was talking to my therapist the other day and I was saying, you know, oh, I did this like kind gesture, but I didn't feel like some profound, like, I don't, it just seemed like the right thing to do. I did it. It felt like I did the right thing should, you know, shouldn't I feel like more around it?And you know, her perspective was much more like, oh, what matters is like doing the thing, not sort of your internal states about it. Which to me would, would go to the, if the machine can, can do all the things we expect from sort of a caring type type machine. Like why do we need to spend all this time when we don't even expect that of humans to always feel the right feelings.Reid: I totally agree with you. Look, I think the real question is what you do. Now that being said, part of how we predict what you do is that, you know, um, you may not have like at that moment gone, haha, I think of myself as really good cause I've done this kind thing. Which by the way, might be a better human thing as opposed to like, I'm doing this cause I'm better than most people.Eric: Right.Reid: Yeah, but it's the pattern in which you engage in these things and part of the feelings and so forth is cause that creates a kind of a reliability of pattern of do you see other people? Do you have the aspiration to have, not just yourself, but the people around you leading better and improving lives.And obviously if that's the behavior that we're seeing from these things, then that's a lot of it. And the only question is, what's that forward looking momentum on it? And I think amongst humans that comes to an intention, a model of the world and so forth. You know, amongst, amongst machines that mean just maybe the no, no, we're aligned.Well, like, we've done a really good alignment with human progress.Eric: Do you think there will be a point in time where it's like an ethical problem to unplug it? Like I think of like a bear, right? Like a bear is dangerous. You know, there are circumstances where pretty comfortable. Killing the bear,But if the bear like hasn't actually done anything, we've taken it under our care. Like we don't just like shoot bears at zoos, you know? Do you think there's a point where like, and it costs us money to sustain the bear at a zoo, do you think there are cases where we might say, oh man, now there's an ethical question around unpluggingReid: I think it's a when, not an if.Eric: Yeah.Reid: Right? I mean, it may be a when, once again, just like AGI, that's a fair way's out. But it's a when, not an if. And by the way, I think that's again, part of the progress that we make because we think about like, how should we be treating it? Because, you know, like for example, if you go back a hundred, 150 years, the whole concept of animal rights doesn't exist in humans.You know, it's like, hey, you wanna, you want to torture animal X to death, you know, like you're queer, but you're, you're, you're allowed to do that. That's an odd thing for you to do. And maybe it's kind of like, like distasteful, like grungy bad in some way, but , you know, it's like, okay. Where's now you're like, oh, that person is, is like going out to try to go torture animals! We should like get them in an institution, right? Like, that's not okay. You know, what is that further progress for the rights and lives? And I think it will ultimately come to things that we think are, when it gets to kind of like things that have their own agency and have their own consciousness and sets of existence.We should be including all of that in some, in some grand or elevated, you know, kind of rights conceptions.Eric: All right, so back back to my listeners who, you know, wanna know where to invest and make money off this and, you know.Reid: [laughs] It isn't from qualia and consciousness. Oh, wait.Eric: Who do you think are the key players? The key players in the models. Then obviously there are more sort of, I don't know if we're calling them vertical solutions or product oriented or whatever, however you think about them.But starting with the models, like who do you see as sort of the real players right now? Are you counting out a Google or do you think they'll still, you know, sort of show?Reid: Oh no. I think Google will show up. And obviously, you know, Open AI, Microsoft has done a ton of stuff. I co-founded Inflection last year with Mustafa Suleyman. We have a just amazing team and I do see a lot of teams, so I'm.Eric: And that's to build sort of the foundational…Reid: Yeah, they're gonna, well, they're building their own models and they're gonna build some things off those models.We haven't really said what they are yet. But that's obviously going to be kind of new models. Adept, another Greylock investment building its own models, Character is building its own models, Anthropic is building its own models. And Anthropic is, you know, Dario and the crew is smart folks from Open AI, they're, they're doing stuff within a kind of a similar research program that Open AI is doing.And so I think those are the ones that I probably most track.Eric: Character's an interesting case and you know, we're still learning more about that company. You know, I was first to report they're looking to raise 250 million. My understanding is that what's interesting is they're building the models, but then for a particular use case, right?Or like, it's really a question of leverage or like, do people need to build the models to be competitive or do you think there will be... can you build a great business on top of Stability or Open AI or do you need to do it yourself?Reid: I think you can, but the way you do it is you can't say it's cause I have unique access to the model. It has to be, you know, I have a business that has network effects or I'm well integrated in enterprise, or I have another deep stack of technology that I'm bringing into it. It can't just be, I'm a lightweight front end to it because then other people can be the lightweight front end.So you can build great businesses. I think with it, I do think that people will both build businesses off, you know, things like the Open AI APIs and I think people will also train models. Because I think one of the things that will definitely happen is a lot of… not just will large models be built in ways that are interesting and compelling, but I think a bunch of smaller models will be built that are specifically tuned and so forth.And there's all kinds of reasons. Everything from you can build them to do something very specific, but also like inference cost, does it, does it run on a low compute or low power footprint? You know, et cetera, et cetera. You know, AI doctor, AI tutor, um, you know, duh and on a cell phone. And, um, and so, you know, I think like all of that, I think the short answer to this is allEric: Right. Do you think we are in a compute arms race still, or do you, do you think this is gonna continue where it's just if you can raise a billion dollars to, to buy sort of com GPU access basically from Microsoft or Amazon or Google, you're, you're gonna be sort of pretty far ahead? Or how do you think about that sort of the money, the money and computing rates shaping up?Reid: So I kind of think about two. There's kind of two lines of trends. There's one line, which is the larger and larger models, which by the way, you say, well, okay, so does the scale compute and one x flop goes to two x flops, and does your performance function go up by that?And it doesn't have to go up by a hundred percent or, or two x or plus one x. It could go up by 25%, but sometimes that really matters. Coding doctors, you know, legal, other things. Well, it's like actually, in fact, it, even though it's twice as expensive, a 25% increase in, you know, twice as expensive of compute, the 25% increase in performance is worth it. And I think you then have a large scale model, like a set of things that are kind of going along need to be using the large scale models.Then I think there's a set of things that don't have that need. And for example, that's one of the reasons I wasn't really surprised at all by the profusion of image generation, cuz those are, you know, generally speaking, trainable for a million to $10 million. I think there's gonna be a range of those.I think, you know, maybe someone will figure out how to do, you know, a hundred-million version and once they figured out how to do a hundred-million dollar version, someone also figured out how to do the 30-million version of that hundred-million dollar version. And there's a second line going on where all of these other smaller models will fit into interesting businesses. And then I think a lot of people will either deploy an open source model that they're using themselves, train their own model, get a special deal with, like a model provider or something else as a way of doing it.And so I think the short answer is there will be both, and you have to be looking at this from what's the specific that this business is doing. You know, the classic issues of, you know, how do you go to market, how do you create a competitive mode? What are the things that give you real, enduring value that people will pay for in some way in a business?All of the, those questions still apply, but the, but, but there's gonna be a panoply of answers, depending on the different models of how it playsEric: Do you think spend on this space in terms of computing will be larger in ‘24 and then larger in 25?Reid: Yes. Unquestionably,Eric: We're on the, we're still on the rise.Reid: Oh, yes. Unquestionably.Eric: That's great for a certain company that you're on the board of.Reid: Well look, and it's not just great for Microsoft. There are these other ones, you know, AWS, Google, but…Eric: Right. It does feel like Amazon's somewhat sleepy here. Do you have any view there?Reid: Well, I think they have begun to realize, what I've heard from the market is that they've begun to realize that they should have some stuff here. I don't think they've yet gotten fully underway. I think they are trying to train some large language models themselves. I don't know if they've even realized that there is a skill to training those large language models, cause like, you know, sometimes people say, well, you just turn on and you run the, run the large language model, the, the training regime that you read in the papers and then you make stuff.We've seen a lot of failures, of people trying to build these things and failing to do so, so, you know, there's, there's an expertise that you learn in doing it as well. And so I think—Eric: Sorry to interrupt—if Microsoft is around Open AI and Google is around Anthropic, is Amazon gonna be around stability? That's sort of the question that I'll put out to the world. I don't know if you have.Reid: I certainly don't know anything. And in the case of, you know, very, very, very, um, a politely said, um, Anthropic and OpenAI have scale with huge models. Stability is all small models, so, hmm.Eric: Yeah. Interesting. I, I don't think I've asked you sort of directly about sort of stepping off the Open AI board. I mean, I would assume you would prefer to be on the board or…?Reid: Yeah. Well, so look, it was a funny thing because, um, you know, I was getting more and more requests from various Greylock portfolio companies cause we've been investing in AI stuff for over five years. Like real AI, not just the, we call it “software AI”, but actual AI companies.For a while and I was getting more and more requests to do it and I was like oh, you know, what I did before was, well here's the channel. Like here is the guy who, the person who handles the API request goes, go talk to them. Like, why can't you help me? I was like, well, I'm on the board.I have a responsibility to not be doing that. And then I realized that, oh s**t, it's gonna look more and more. Um, I might have a real conflict of interest here, even as we're really carefully navigating it and, and it was really important cause you know various forces are gonna kind of try to question the frankly, super deep integrity of Open AI.It's like, look, I, Sam, I think it might be best even though I remain a fan, an ally, um, to helping, I think it may be best for Open AI. And generally to step off a board to avoid a conflict of interest. And we talked about a bunch and said, okay, fine, we'll do it. And you know, I had dinner with Sam last night and most of what we were talking about was kind of the range of what's going on and what are the important things that open eyes need to solve? And how should we be interfacing with governments so that governments understand? What are the key things that, that, that should be in the mix? And what great future things for humanity are really important not to fumble in the, in the generally, like everyone going, oh, I'm worrying. And then I said, oh, I got a question for you. And he's like, yeah, okay. I'm like, now that I'm no longer on the board, could I ask you to personally look at unblocking, my portfolio company's thing to the API? Because I couldn't ever ask you that question before. Cause I would be unethical. But now I'm not on the board, so can I ask the question?He's like, sure, I'll look into it. I'm like, great, right? And that's the substance of it, which I never would've done before. But that wasn't why, I mean, obviously love Sam and the Open AI team.Eric: The fact that you're sort of a Democratic super donor was that in the calculus? Or, because I mean, we are seeing Republican… well, I didn't think that at all coming into this conversation, but just hearing what you're saying. Looking at it now, it feels like Republicans are like trying to find something to be angry about.Reid: WellEric: These AI things, I don't quite…Reid: The unfortunate thing about the, the most vociferous of the republican media ecosystem is they just invent fiction, like their hallucination full out.Eric: Right.Reid: I mean, it just like, I mean, the amount of just like, you know, 2020 election denial and all the rest, which you can tell from having their text released from Fox News that like, here are these people who are on camera going on where you have a question about, you know, what happened in the election.And they're texting each other going, oh my God, this is insane. This is a coup, you know, da da da. And you're like, okay. Anyway, so, so all like, they don't require truth to generate. Heat and friction. So that was, wasn't that no, no. It's just really, it's kind of the question of, when you're serving on a board, you have to understand what your mission is very deeply and, and to navigate it.And part of the 501(C)(3) boards is to say, look, obviously I contribute by being a board member and helping and navigate various circumstances and all the rest. And, you know, I can continue to be a counselor and an aid to the company not being on the board. And one of the things I think is gonna be very important for the next X years, for the entire world to know is that open AI takes its ethics super seriously,Eric: Right.Reid: As do I.Eric: Does that fit with having to invest? I mean, there are lots of companies that do great things. They have investors. I believe in companies probably more than personally I believe in charities to accomplish things. But the duality of OpenAI is extremely confusing. Like, was Greylock, did Greylock itself invest a lot or you invested early as an angel?Reid: I was the founding investor as an angel, as a, as a program related investment from my foundation. Because like I started, I was among the first people to make a philanthropic donation to Open AI. Just straight out, you know, here's a grant by Wednesday, then Sam and Crew came up with this idea for doing this commercial lp, and I said, look, I, I'll help and I have no idea if this will be an interesting economic investment.They didn't have a business plan, they didn't have a revenue plan, they didn't have a product plan. I brought it to Greylock. We talked about it and they said, look, we think this will be possibly a really interesting technology, but you know, part of our responsibility to our LPs, which you know, includes a whole bunch of universities and else we invest in businesses and there is no business plan.Eric: So is that the Khosla did? Khosla's like we invested wild things. Anyway, we don't care. That's sort of what Vinod wants to project anyway, so yeah.Reid: You know, yes, that's exactly the same. So I put them 50 and then he put in a, I think he was the only venture fund investing in that round. But like, there was no business plan, there was no revenue model, there was no go to market…Eric: Well, Sam basically says, someday we're gonna have AGI and we're gonna ask you how to make a bunch of money? Like, is he, that's a joke, right? Or like, how much is he joking?Reid: It's definitely, it's not a 100% joke and it's not a 0% joke. It's a question around, the mission is really about how do we get to AGI or as close to AGI as useful and to make it useful for humanity. And by the way, the closer you get to AGI, the more interesting technologies fall out, including the ability to have the technology itself solve various problems.So if you said, we have a business model problem, it's like, well ask the thing. Now, if you currently sit down and ask, you know, ChatGPT what the business model is, you'll get something pretty vague and generic that wouldn't get you a meeting with a venture capitalist because it's like “we will have ad supported”... you're like, okay. Right.Eric: Don't you have a company that's trying to do pitch decks now or something?Reid: Oh yeah, Tome. No, and it's awesome, but by the way, that's the right kind of thing. Because, because what it does is you say, hey, give me a set of tiles, together with images and graphics and things arguing X and then you start working with the AI to improve it. Say, oh, I need a slide that does this and I need a catchier headline here, and, and you know, da da da.And then you, and you know, obviously you can edit it yourself and so on. So that's the kind of amplification. Now you don't say, give me my business model, right?Eric: You're like, I have this business model, like articulate it.Reid: Exactly.Eric: Um, I, politics, I mean, I feel like we, we live through such like a… you know what I mean, I feel like Silicon Valley, you know, has like, worked on PE everybody be able to, you know, everybody can get along. There's sort of competition, but then you sort of still stay close to any, everybody like, you, you especially like are good, you know, you you are in the PayPal mafia with a lot of people who are fairly very conservative now.The Trump years broke that in some ways and particular, and that, yeah. So how did you maintain those relationships?I see headlines that say you're friends with Peter Thiel. What is, what's the state of your friendship with Peter Thiel and how, how did it survive?I guess the Trump years is the question.Reid: Well, I think the thing that Peter and I learned when we were undergraduate at Stanford together is it's very important to… cause we, you know, I was a lefty. He was a righty. We'd argue a lot to maintain conversation and to argue things. It's difficult to argue on things that feel existential and it's ethically challenged is things around Trump. You know, the, you know, Trump feels to be a corrosive asset upon our democracy that is disfiguring us and staining us to the world. And so to have a dispassionate argument about it is, it's challenging. And it ends up with some uneven ground and statements like, I can't believe you're f*****g saying that, as part of dialogue.But on the other hand, you know, maintaining dialogue is I think part of how we make progress as society. And I basically sympathetic to people as long as they are legitimately and earnestly and committed to the dialogue and discussion of truth between them and committed otherwise.And so, you know, there are folks from the PayPal years that I don't really spend much time talking to, right?. There are others that I do because that conversation about discovering who we are and who we should be is really important. And you can't allow your own position to be the definer.It almost goes back to what we were talking about, the AI side, which is make sure you're talking to other smart people who challenge you to make sure you're doing the right thing. And that's, I think, a good general life principle.Eric: Well, you know, I feel like part of what my dream of like the Silicon Valley world is that we have these, you know, we have, Twitter is like the open forum. We're having sincere sort of on the level debates, but then you see something like, you know, the…Reid: You don't think it's the modern Seinfeld show I got? Well, not Seinfeld, um, Springer, Jerry Springer.Eric: Yeah, that's, yeah. Right. But I just feel like the sort of like, if the arguments are on the level issue is my problem with some of the sort of, I don't know, Peter Theil arguments, that he's not actually publicly advancing his beliefs in a sincere way, and that that's almost more corrosive.Reid: Oh, that's totally corrosive. And as much as that's happening, it's terrible. And that's one of the things that I, um, you know, in conversations I have, I push people including Peter on a lot.Eric: Yeah. Are you still, are you still gonna donate a lot, or what was, what's your, are you as animated about the Democratic party and working through sort of donor channels at the moment?Reid: Well, what I would say is I think that we have a responsibility to try to make, like with, it's kind of the Spider-Man ethics. With power comes responsibility, with wealth comes responsibility, and you have to try to help contribute to… what is the better society that we should be living and navigating in?And so I stay committed on that basis. And I do think there are some really amazing people in the administration. I think Biden is kind of a good everyday guy.Eric: Yeah.Reid: In fact, good for trying to build bridges in the country. I think there are people like Secretary Raimondo and Secretary Buttigieg who are thinking intensely about technology and what should be done in the future.And I think there's other folks now, I think there's a bunch of folks on the democratic side that I think are more concerned with their demagoguery than they are with the right thing in society. And so I tend to be, you know, unsympathetic to, um, you know…Eric: I know, Michael Moritz, it's Sequoia, that oped sort of criticizing San Francisco government, you know, and there's, there's certainly this sort of woke critique of the Democratic Party. I'm curious if there's a piece of it sort of outside of he governance that you're…Reid: Well, the interesting thing about woke is like, well, we're anti woke. And you're like, well, don't you think being awake is a good thing? I mean, it's kind of a funny thing. Eric: And sort of the ill-defined nature of woke is like key to the allegation because it's like, what's the substantive thing you're saying there? And you know, I mean we we're seeing Elon tweet about race right now, which is sort of terrifying anyway.Reid: Yeah. I think the question on this stuff is to try to say, look, people have a lot of different views and a lot of different things and some of those views are, are bad, especially in kind of minority and need to be advocated against in various… part of why we like democracy is to have discourse.I'm very concerned about the status of public discourse. And obviously most people tend to focus that around social media, which obviously has some legitimate things that we need to talk about. But on the other hand, they don't track like these, like opinion shows on, like, Fox News that represent themselves implicitly as news shows and saying, man, this is the following thing.Like there's election fraud in 2020, and then when they're sued for the various forms of deformation, they say, we're just an entertainment show. We don't do anything like news. So we have that within that we are already struggling on a variety of these issues within society. and we, I think we need to sort them all out.Eric: Is there anything on the AI front that we missed or that you wanted to make sure to talk about? I think we covered so much great ground. Reid: And, and we can do it again, right. You know, it's all, it's great.Eric: I love it. This was all the things you're interested in and I'm interested in, so great. I really enjoyed having you on the podcast and thanks.Reid: Likewise. And, you know, I follow the stuff you do and it's, it's, it's cool and keep doing it. Get full access to Newcomer at www.newcomer.co/subscribe

What you'll learn in this episode:   The difference between jadeite and nephrite, and why both are known as jade Why Chinese artisans have chosen to carve jade for thousands of years Why jade can be purchased at dramatically different price points How to spot a pseudo jade that has been dyed or polymer treated Why a healthy sense of skepticism is the most important thing a new jade collector can have   About Eric Hoffman   Eric Hoffman is an aficionado of Chinese jades for over 40 years. He is the owner and operator of Far East Gallery, which is dedicated to lovers of Chinese arts, antiques, antiquities, and—most especially—jades and snuff bottles. A member of the worldwide organizations Friends of Jade and the Association for the Study of Jewelry and Related Arts, jade consultant to the Chinese Cultural Relics Association, and contributing editor to Adornment magazine, Prof. Hoffman has written many articles and reviews on this fascinating subject.   Additional Resources: Website Introductory Articles on Jade: http://hoffmanjade.com/Adornment_Jade.pdf https://asianart.com/articles/hoffman/index.html   Photos available on TheJewelryJourney.com   Transcript: Jade is a popular gemstone that even the most avid jewelry collectors often know little about. Much of the confusion stems from the fact that two distinct stones share the same name. Enter Eric Hoffman, a jade dealer and author who is an expert on identifying different types of jade. He joined the Jewelry Journey Podcast to talk about jadeite jade vs. nephrite jade; why jade can either be extremely valuable or basically worthless; and how new collectors can find quality pieces. Read the episode transcript here.  Sharon: Hello, everyone. Welcome to the Jewelry Journey Podcast. This is the second part of a two-part episode. If you haven't heard part one, please head to TheJewelryJourney.com. Today, my guest is Eric J. Hoffman, who's extremely knowledgeable about jade. Eric is the owner of Far East Gallery and HoffmanJade.com. He is a seller and a buyer, and he knows a lot about what makes jade valuable. He's also an author. Welcome back.    But you said there's a white jade that's a nephrite, and then there's another kind of white jade that's a jadeite, right?   Eric: That's right. When you're talking about white jade, it makes a big difference whether it's nephrite or jadeite. White nephrite is very desirable. White jadeite is kind of a waste material. In fact, it's often dyed or polymer-treated to make it look like something it's not.   Sharon: When you say something it's not, what do you mean? Is it to try and fool people? Why do carvers value white jade so much?   Eric: Again, you have to distinguish between the two types of white jade. The nephrite is desirable to carvers because it can be carved thin and it's not going to break on them while they're carving. The jadeite is generally valued for jewelry, and people don't want a white stone ring. They want the nice, imperial green, apple green jadeite. Back in the late 80s, around 1989, someone figured out how to polymer treat and dye white jadeite to make it look like the imperial green, desirable jadeite.   Sharon: Wow, there's a lot to learn when it comes to stone. The white nephrite that's called jade, when it comes to carving, it's harder to carve. Am I right?   Eric: All carving is hard, but at least the nephrite's not going to break on you. It's not going to crumble. It's not going to cleave like some minerals like fluorite, for example, might do. There are carvings in jadeite as well. It's a little less tough and a little bit harder.   Sharon: But jadeite is what was in Burma. Maybe I'm getting confused. I'm trying to keep it straight. When you talk about the Chinese, that's more of the nephrite jade, and when you talk about the Burmese, that's more of the jadeite, right?    Eric: In terms of where they come from, but there's not much of an industry in Burma carving jadeite. The jadeite comes out of the ground in Burma, and it goes immediately to China where it is made into jewelry and carvings and artifacts and so forth.   Sharon: I'm just getting confused. If somebody says to me, “This is a jade bracelet,” and it's green, what do I ask? Where it came from, or is it nephrite or jadeite? What do I ask?   Eric: The question would be is it nephrite or jadeite. The answer will probably come back that it's jadeite. When you see jade bangle bracelets, for example, they're usually but not always jadeite. Usually if it's a vivid apple green, it's probably jadeite. If it's a darker grayish green, it's probably nephrite.   Sharon: What if it's white? I'm thinking of a hand-made bangle. If they say it's white jade, is that just treated jadeite?   Eric: They would probably not stop at white. They would try to dye it or polymer treat it to try to fool you into thinking it's a more valuable type of jade.   Sharon: So, when somebody says to me, “This is jade,” they really mean jadeite, right? There's nephrite, but most things are jadeite. I'm just trying to understand this.   Eric: It's a complicated subject for sure. Most of the jewelry, but not all that you encounter, will be jadeite. There is nephrite jewelry, but it's probably 10 to one in favor of jadeite.   Sharon: When I was talking to Elyse, she was saying that most of the time the carvings are too large to be used for jewelry, as you were saying, but there are smaller things such as beads and things like that. Is that jade jadeite? Why are they made into small items?   Eric: Jade is found in small quantities, so that's one thing that limits the size. It's costly material, at least the higher grades of jadeite. That would be another thing that limits the size.    Sharon: What would icy jade be? Tell us about icy jade.   Eric: That's another interesting subject. When you're judging jadeite, you're looking at the color. You look at what's called the texture, which is the fineness of the individual, microscopic crystals. It affects the kind of polish the jade can take. You look at the clarity. You'd like to find jade that doesn't have inclusions or black spots in it. There's also something called translucence. As jade becomes more and more translucent, you get to where you can almost read text through it. That's called icy jade.   Sharon: Do you look at whether it's jade or icy jade? Do you look at it under a microscope to decide if you're going to buy it or judge it?   Eric: No, you can see right away that it's an example of icy jade, but it's fairly rare material. It didn't used to be worth anything particularly more than other jades until Christie's, some years ago in a marketing coup, changed the name from water jade to icy jade.   Sharon: Water jade to icy jade.   Eric: And it took off. In the many pieces I've handled over the decades, I only have one piece of icy jade.   Sharon: That's you've handled or that you would be willing to part with?   Eric: Both.    Sharon: Putting icy jade aside, when you evaluate a piece of jade, do you look under a microscope at all? Is that part of your process? I don't know what you look for.   Eric: Generally, no. Generally, a 10x loupe is about all you need to evaluate jade. For example, with a 10x loupe, you can look and see if dye is seeping into the little boundaries between regions on jadeite. The other instrument that is sometimes useful would be a refractometer, which is occasionally brought into play to distinguish between a nephrite and a jadeite.   Sharon: Somebody brought my mother a gift back from China, and she said it was jade. Would that have been an imitation jade? I don't know what she paid for it. I don't remember. Was it a jade jadeite versus—I mean, nephrite doesn't sound like it's in the picture.   Eric: It could have been any one of those. There are some fairly simple tests of hardness and specific gravity and so forth that you can run to tell what you're looking at.   Sharon: As a collector and, as you can tell very obviously, somebody who knows nothing about jade or nephrite or Mawsitsit or icy jade, what would you say to a collector just starting out? What should they look for? What should they have with them? I got rid of my refractometer a long time ago. I said, “Forget it. I never use it.” What would they do with it?   Eric: The one thing you should always have with you is a 10x loupe. The other thing you should always have with you is a healthy sense of skepticism. I assume that any ancient jade I'm shown is a brand-new fake until proven otherwise. When you're shown a gorgeous piece of jade jewelry, you should be a little skeptical as to whether it's natural or has been treated in some way.   Sharon: Treated meaning coated with color to make it look a different color or a stronger color?   Eric: There have been examples of coating, but I was really referring to was what started back in 1989, with the polymer treatment of pretty much worthless white jadeite.   Sharon: How would I know? How would a collector know?   Eric: It's a problem. At a certain price level, you would go to the GIA. They would look at your piece with an infrared spectrometer and tell you yes or no, whether it's natural or colored or had been treated. But this test, of course, costs a few hundred dollars, so you're probably up in the $20,000-$30,000 price range before it becomes worthwhile doing that.    Sharon: If you're buying a less expensive piece that's not a $20,000 piece, what would you say a collector should look for? Should we look for translucency? If they tell me something is old, how do I know?   Eric: If you don't have a $100,000 spectrometer laying around in your basement, you should probably look for a dealer you can trust who does have access to one, either directly or through a lab like GIA.   Sharon: I can tell you're on the East Coast if you say a basement, because who knows what a basement is out here? In fact, I did see a house with a basement, and I was floored. I thought a house with a basement in Los Angeles—   Eric: No basements in Los Angeles?   Sharon: No basements out here, or maybe just a few old, old houses. So, what attracts you? Do you like the color of the jade you buy? Whatever you put on your site, do you like it?   Eric: Yes, the colors of nephrite are more subdued and softer and more subtle, but I find them attractive. The colors of jadeite are brighter and a more vivid green. There's also lavender, which is very attractive. So, yes, the color is one thing, and the extreme toughness of nephrite, what it lets carvers accomplish.   Sharon: If something is lavender, depending on price range, you could add polymers to make it lavender? Is it nephrite or would that be jadeite, or both?   Eric: That is jadeite, yes. Unfortunately, lavender is faked as well. Polymer-treated lavender does exist. It's usually so garish looking that you can dismiss it right out of hand, but a really good imitation can be a little harder to tell. Once again, you rely on an infrared spectrometer to tell the difference.   Sharon: Do you have one lying around your house?    Eric: I have no infrared spectrometer.   Sharon: In the thousands of years they've been carving jade, whether it's in China or Burma or wherever, is there natural lavender jade? What are the natural colors?   Eric: Oh yes, there is natural lavender. It's a softer, more subtle lavender. It comes from Burma along with the other jades, so it does exist.   Sharon: Are there any other colors? There's green; there's white; there's lavender. There are different shades of green, but what else? Is that it for all the jades?   Eric: There is a red. There's a reddish brown, russet and black.   Sharon: And they all come from Burma and then they're shipped off to China? Or are they in China?   Eric: The jade is all from Burma and it's almost universally carved in China.   Sharon: So, if somebody shows me a piece—I keep going back to this example of a bangle bracelet—and somebody says it's from China, it's really been dug out of the ground in Burma and shipped off to China to be made into something. Is that what you're saying?   Eric: That's correct. If it's jadeite, the raw material came from northern Burma and the work was almost certainly done in China.   Sharon: O.K. You must really take people aback when you start asking them questions. They probably think you're just another person who doesn't know anything about jade.   Eric: Once again, you want to find a dealer you have some faith in.   Sharon: Do you think you have those dealers? Because you're a dealer, do you think the people you get your material and your carved objects from, are they trustworthy? If they call you and say, “Hey, do I have a deal for you,” do you say, “O.K., let me hear about it”?   Eric: There are dealers I buy from and there are dealers I sell to. I also sell jade books, books about jade.   Sharon: Tell us about some of the things you're written about or the names of the books.   Eric: At one point, I might have been the number one seller of jade books in the world. I've written about that. I've sent a lot of the best ones to China. Even though the shipping cost can be horrendous for a big, heavy book, it doesn't seem to bother anybody in China to pay it.   Sharon: You must have clients from all over the world.   Eric: Yeah, I've probably shipped to about 20 to 30 countries.   Sharon: Besides the books, who contacts you from all over the world to say, “Hey, I saw this object on your site”?   Eric: I get that all the time, people showing pictures. Invariably it's imitation ancient jades.    Sharon: How about when they want to buy something from you? Do they come from all over the world?   Eric: I ship all over.    Sharon: Tell us what you've written about. If you're the number one seller, people really trust what you have to say about jade. Are you writing from a mineral perspective for what to look for? What are you telling them? What are you writing about in the books?    Eric: As an engineer, it's the technical aspect I appreciate the most. Telling jade from pseudo jade has been a side specialty.   Sharon: I shouldn't send my bracelet from the swap meet to you because I should just assume it's pseudo jade. That's what you're saying, right?   Eric: It pays to have a healthy sense of skepticism. I assume everything is fake until proven otherwise.   Sharon: How would somebody prove otherwise to you? Because it's old and they're brushing the dirt off of it? How would they prove it?   Eric: Perhaps the most reliable thing in dealing with ancient jades is to take a close look at the tooling techniques and looking for modern toolmarks, which would not have been used a thousand plus years ago.   Sharon: Do you often find when you're evaluating a piece for you to buy to resell, will someone tell you, “Oh, this is made with old tools,” and then you'll find a modern tool mark and hand it back?   Eric: There's no handing back. A lot of times, you have to buy in a dark, dingy corner, no recourse, no refund, cash only.   Sharon: I guess I'm thinking about a big show or something like that. You're saying they pull you aside. Do they open their raincoat or something?   Eric: At a big show, of course, the vetting has already been done for you. But that's reflected in the very high prices, so it's hard to buy anything at a big show for resale.    Sharon: As a collector, if we were going to buy or evaluate a piece and we don't have our handy refractometer with us, what should we be doing in terms of the sense of skepticism? It's like how on Antiques Roadshow you see people all the time who believe they have pre-Columbian artifacts and they're proven to be fake. Should we look for contemporary toolmarks? Is that one tell?   Eric: You've opened another new subject, and that's pre-Columbian jade. Jade was carved in Central America roughly about the time of the Chinese Zhou Dynasty. In fact, there's some thought that perhaps there was communication between China and the jade carvers in Central America because a lot of the motifs are the same. But in Central America, at that time, they were using string and abrasives and stone files, not metal tools.   Sharon: When was this?   Eric: This would have been maybe 500 to 1,000 years ago.    Sharon: Not that long ago, really, when you compare it to China or even other places in the world.   Eric: That's right. For the first several thousand years, China carved with the same kinds of tools before they had metals.   Sharon: That's really interesting. Tell us a bit more about when we should come to a person like you, what we'll find in the books and chapters you've coauthored. Are we only going to find technical stuff, or are we going to find history? Are we going to find anything else?   Eric: There are jade books that cover all of that. Unfortunately, they're not all in the same book. The book I worked on most recently was by Richard Hughes in Bangkok. It's a big, heavy book. It's costs $200 just to mail it from Bangkok to the United States. It's not the kind of investment everybody will make, and it does focus on the gemology aspects of both nephrite and jadeite.    Sharon: When are you going to be writing your book about history? You say there's not a book that encompasses it all. Forget the minerology, but the history, the carving, how it's done. When are you going to write it?   Eric: I don't think you should wait for it. I've been assembling notes for about 20 years. Elyse asks that same question about once a week.   Sharon: So, I should come back to you in 10, 15 years?   Eric: 10 years would be good.   Sharon: For somebody like me, it would be an easier book to write because I don't know the technical stuff. The history and the carving would be interesting and fast to write.    Eric: While you're waiting the 10 years, there is actually a book that was written called “Jade Lore.” I'm not sure when it was written; possibly in the 40s. That does cover, in a very readable way, a lot of the history along with a little bit of the technical.   Sharon: But isn't it out of print because it's been so long?   Eric: It's out of print, but you can find copies. It was written by a journalist who was on-site in China around the time the Qing Dynasty was falling apart, and a lot of these pieces were coming onto the market.   Sharon: When was that? How long ago?   Eric: The Qing Dynasty fell in 1911, 1912. I think this book was written either in the 30s or 40s. It was written by somebody who really knew how to write a lively story.   Sharon: Where have you been? If you're saying you look at these objects or jewels, have you been to some of the places and seen them directly, or is it mostly when somebody brings you into a dark corner?   Eric: I've been to Taiwan. I have not been to mainland China. As I mentioned earlier, the Chinese really want to repatriate and bring back into the country the best jades as well as jade books. To get pieces of jade now, you pretty much have to stumble across American collections or European collections.   Sharon: I think that's true of other pieces too. It seems that the Chinese are very interested in repatriating a lot of older jewelry. We're being told they're the ones who drive the prices up. Is that also true in jade?   Eric: Oh, absolutely. In fact, there's a book on that subject as well.    Sharon: Which is?   Eric: On the whole subject of repatriating these pieces back into China.    Sharon: What do people do with them when they have them back in China?   Eric: What do they do with them in China?   Sharon: Yeah.   Eric: Some of those will end up in museums in China. Others end up in private collections of millionaires.   Sharon: Eric, I see Elyse in the corner there. You have to go pack your bags so you can get ready for your next trip to Myanmar or mainland China. You've been to Taiwan. Thank you very much for being with us today.    Eric: It's a pleasure. Thank you for inviting me.   Sharon: It's been great. We will have photos posted on the website. Please head to TheJewelryJourney.com to check them out.   Thank you again for listening. Please leave us a rating and review so we can help others start their own jewelry journey.

It was a tough three game stretch, made tougher with an injury to Kris Murray. After a poor shooting game and a loss to Duke in NYC, the Hawkeyes crushed ISU in a quick turnaround game without Murray. Without Murray and Ulis, the Hawkeyes lost to WI in OT. Nice effort by the Hawkeyes. New transfer portal news with Eric All, TE from Michigan, picking the Hawkeyes! This new offense is coming together!

On Part One of this two-part series, you were introduced to Matt and Brian from the ACCEL Gaming Division. We discussed their background as it pertains to blockchain and gaming, involvement with ACCEL as well as P2E Gaming and their use of and integration of NFTs.On today's episode of the Podcast, Scott, Eric and Ryan welcome back Matt from the ACCEL Gaming Division to discuss how P2E Gaming, NFTs, and two exclusive projects that the ACCEL Gaming Division are working on!-----------------------------------------Episode Transcript:[Scott] On today's episode of the ACCEL Podcast, we dive deeper into the world of blockchain games and their use in the NFT World. As always, my name is Scott and I am Eric and I'm Ryan. You're listening to the ACCEL Podcast defining a decentralized view future, One listen at a time.[Scott] Thanks for tuning into part two of our series on blockchain gaming. We wanted to do something a little different this time with regards to putting the podcast together, and what we came up with was to survey the community or rather solicit questions on topics of P2E Gaming, Play-to-Earn Gaming and their use and integration with NFTs. [Ryan] So Matt, I wanted to welcome you back onto the ACCEL Podcast. How are we doing? [Matt]Good, pretty good. Thanks for having me. [Ryan] Always our pleasure. But right out the gate I feel like we've got to set the record straight as one of the leads of the ACCEL gaming division. What kind of games do you like to play? [Matt] Honestly, I like hard games. I've always been a big fan of platformers. My favorite game when I was young was Sonic. Still to this day I also love RPGs. I played most of the Final Fantasy series and a lot of the current very modern RPGs. I'm currently playing Eldon Ring. I think it's an absolute masterpiece and I'm honestly up for anything that seems some sort of a challenge or a good build up on an RPG element. [Eric] So Matt, I wanted to go back to the basics from our earlier episode in relation to what P2E or Play-to-Earn games are on. Maybe you could give us some examples of the P2E Games, what blockchains they exist on, and maybe some games that currently aren't in the space that you think could come to the blockchain. [Matt] I think the Play-to-Earn model, even though not formally it has existed for the longest time. And just calling out to our previous example. In the previous episode, RuneScape was a game that people actually started trading items for your money very long ago. And then that model was also formally implemented in Diablo Three and casually seen in World Warcraft, where it was a bit more informal. So the P2E aspect of trading time for some reward. Usually money has existed for the longest time. You can call on online casinos, online card and poker platforms, et cetera. At least those would be most of the games that would be outside of the space. And if we were to go inside the space, you have a lot of gains that have existed for a while. You have mostly yield farming gains, kind of like Axie Infinity, Crypto Cars, Bomb Crypto. A lot of these have very good options as well, and I think it's gotten pretty popular these days, so those are great examples. [Eric] So my question, can you be more type specific. In your opinion, what are the best blockchains or the best platforms that relate to the P2E Games, which makes it the easiest to navigate. [Matt] I would say anything that's currently built upon the most mainstream platforms, like you have Ripple, you have Ethereum, you have Bitcoin, which not a lot of games are tied to. Most of them are tied to Ethereum and Ripple. So I would look into something with that. You also have BNB and other big options, and it generally is going to be tied to whatever the devs think is the most stable platform to build upon. [Eric] All right, so now that you touched upon with the devs, in a devs opinion, let's say, or in your own opinion, if you're acting as a Dev, what would be the most profitable? [Matt] I would say just not to give out names because I would get burned for that. But whichever has the most potential for growth, because as the game grows, as the community grows, as the base grows, so does everything else tied to it, the tokens, the rewards, and everything gets better. So whatever is going to have the biggest room to grow is going to be the thing that's going to give the most returns. [Scott] So I guess it kind of follow up question of that is, I completely understand that. I think we see this craze with there being talk about Solana and Matic being big for gaming, but the big thing is for it to be scalable. Can you kind of give us a little bit of an explanation how these P2E Games are kind of profitable for the developers, even going back to the online poker and stuff like that, how do you actually make money off of it? And how is it that you're not throwing money at making these games that just don't have any returns on them? [Matt] Yeah, it usually comes down to how you model the economy of the game itself. For example, the real money trading market and Diablo Three actually had a transaction Commission for every buy and every sale. So that is also true with a lot of the current crypto games. There is a transaction fee that is being used in every single transaction by yourself. Kind of like being repetitive here, but that's usually how devs can still hold a pool of the big amount of those resources to make sure that they don't run out, to make sure that they can scale over time to make sure that tokens don't get overcapped and to its own. It's similar to how every company operates when you're first starting out in a company, you're always going to have some sort of shareholding because you're invested in the project and they can't really pay you a full salary. So they pay you in equity that gets you involved. And that makes you be sure that if the company does well and it scales, then so is going to be your share. [Scott] That makes sense. So it's all about kind of making sure at the early stages you're bringing in the right people and then making sure you have the right backing. I guess that kind of ties into what my next question would kind of be. And it's a commonly asked question that we see a lot over in the ACCEL community is how does P2E Games work in attracting people that aren't currently interested in the crypto space? Are you seeing kind of trends that are starting, that are really kind of pushing for that game, by experience, by outside investors that maybe might be involved in investing, but not in crypto or even individuals that might not invest at all? [Matt] I would like to break that into different viewpoints for different kinds of profiles. First, as an investor, why would this be like an important thing to you? Because as an investor, like crypto projects actually have a very good standpoint in the fact that they can actually have a bigger growth than most of traditional investments. So it's a very attractive market to get into. Also, as the game skills, as the community scales, you can also bring a lot of other things to the table where we touched a bit on the last episode about things like fractal ownership. So you don't even have to bring money all the time. You don't have to bring funding on the time. Maybe you own your musician, you want to stay a part of your music. Ownerships are all right. So you can get people that get that NFT can get royalties, and there are so many other valuable things that you can actually just convert into this game or market. And then from the player's side, obviously most of the people you have people that have been in crypto for a while, and you have people that have games for a while. For those who have games for a while, like me, it's really cool because now I can actually sit for hours in front of a screen, play, be good at a game and actually get something out of it, rather than my mom telling me to go to bed. So that's from one side and then you have the other side, which is the people that are in crypto who usually are more into the investment side, they actually have a fun way of interacting with their tokens, a fun way of watching those stakes and rewards and investments grow in a way that you're more of an active participant into everything. And it's a bit fun rather than just sitting there and watching candles on a chart. Not that's a bad thing, but there's more to life than that. [Ryan] So Matt, I wanted to backtrack for a moment and specifically discuss the earn in Play-to-Earn games. Could you discuss how and what exactly players earn in these games and how NFTs come into play? [Matt] Absolutely. Well, the earned part of any interaction that involves real money is done through tokens. 99% of the time is done through tokens. When you go to the horse tracking bed. Like you get this little slips of paper that you can later and cash in if you win. When you go to the casino, you get chips that you can cash in if you win. And sort of every single game has that mechanic built in where you win tokens inside the game and then you convert your tokens to get outside of the game. And this draws a very strong parallel with how everything in the physical world currently works. So the model is not really that different. And where do NFTs come into play here? A lot of these can usually be done or used as collection based items of a Rarity based items. And you can hold these NFTs that would be implemented into the game. And as the NFT or the usage of the character or the item or anything that it is gets more popular and more popular and it increases in value because the community perceives it to be rare or to be more valuable than others. That's a really good way for people to get involved is like, if you have the sense that an NFT is going to become popular, you can get it minted early and then when people use it, when it becomes popular, and what increases value and someone wants to rent it off of you or someone wants to permanently buy it off of you, it'll most likely have increased in value from when you brought it in. [Eric] So Matt, touching on NFTs and regarding NFTs because we know how huge they are now in the crypto space, how they function within the P2E Garning model. Could you talk a little bit about that? And ACCEL's recent acquisition of the Soldiers of the Metaverse NFT collection and how the SOTM NFTs will be tied into ACCEL and What I'm starting to hear their Mortal Kombat style P2E Game that is currently in their development, which I know you have a tremendous impact on. [Matt] Oh yeah, it's been such a fun time to work on the model for the Satin acquisition. And I think you have the basics, which not all of the NFT's are currently implemented in the game. We have a decent line up of characters, but not all of them as of yet. So the NFT in itself will increase in value as the game increases in popularity. Because who doesn't want to own a very rare Batman comic? If you're into comics, it's sort of the same community perception that makes you geo cards, rare, magic cards rare, like comic books are very rare or old collectibles, et cetera. Those things are very important because they tie back to someone's ability to own the NFT, believe in the project, but not necessarily play the game. There's people that don't like fighting style games. There's people that maybe they didn't like how complicated certain inputs might be, or they might not be their favorite time type of game. So that allows and gives people the flexibility to have something sticked into the game, not necessarily have to play it because you don't like the mechanics of the game itself, and then you can still participate somewhat into how everything's going to go up into the game. [Eric] So, Matt, if it's possible to could you just elaborate a little bit on the beta access in relation to the NFTs? [Matt] Oh, yeah, absolutely. That's something that has come up recently. The game is currently in beta access. We're working with a limited pool of people that are currently testing the game and helping out with ironing the bugs and making sure that we find anything that might be exploitable, et cetera. Because when you're going to stake tokens into a game, you want to make sure that everything is stable and fair as possible. The beta access, I think, has been going on, not for too long. It's still going to be out there for a bit. So if someone wants to get involved, I think it would be a good idea to look up the project. And obviously as the game goes on and it moves to like a pretty lease sort of endpoint, all the other questions are going to be answered over time. Right now, I can tell you I've actually played it and it's really fun. And the mechanics, at least the fighting game mechanics are really solid, not great with inputs, but that didn't stop me from actually just getting a combo or two in. [Ryan] Matt, that's good stuff. That's good stuff. But what if I'm not interested in playing this game? So is there an incentive to purchase and hold one of the Soldiers NFTs if I'm not interested in playing this game? Yeah, there would be, because for the same reason that I own a big ass Batman hand painting, because it's more related to how people perceive the value of the community around the game itself, rather than you just playing the game. There's a whole bunch of people that have a million posters or a lot of things, and I'm not good at drawing, but it's not going to stop me from going out and investing in something that I believe is very well drawn and stuff like that, because as I said before, it allows me to participate in something and being a part in something without actually having to play it. If I own a soldier and the game becomes popular, that's also going to benefit me because my soldiers both the Mint price if it were to be reissued or new soldiers were to be issued, and the acquisition price for my own NFT as well is going to go up. So even if I don't play, there are still ways for me to benefit off of the project. [Scott] So I guess, Matt, my next question would kind of be for you. We brought in a developer recently that was added to the team that kind of specializes in staking pool build out. And one of the things he does is NFT building out for staking pools. And it's kind of a new concept that's really starting to catch on. And with passive income being a huge part of ACCEL, can you kind of elaborate a little bit on how these NFT Staking pools work and what you kind of see them doing in the future? [Matt] Yes, I think I am not an expert in the topic, but honestly, it's one of the trends that I've seen come up a lot recently. And the idea of an Ft staking, if I'm not mistaken, would be among the lines of something similar to rent, kind of like you can put your entity out there and people can use it. And obviously, for every win that the character has, you get a bit of a share. And that is also true for other games where you actually are the owner of something, but you still get royalties if someone else rents it out for usage. And a common topic that comes to mind for that is, again, just the RMT market and Diablo Three, where not only you could purchase weapons, you could actually just borrow them for a day, but you have a lot of these very good options to own something and not having to sell it for someone else to be able to use it. And at the same time, given that you didn't have to sell it, you also were able to accrue, one might say rent or profit off of it, kind of like in the horse track how the jockey isn't really the one that owns the horse. So the guy that owns the horse still gets profits if the horse wins and the jockey get profits if the horse wins. So it's sort of like this mixed ownership model that allows people, as we said before, people that might not have zero interest in playing the game. They can stake an NFT that is actually currently tied into the game for people that do want to play the game but may not have an NFT ready at the moment for them to be able to play, to stick to win, and then they both profit a lot from that interaction. [Scott] Okay, Matt, so I guess they got a little bit of a follow up question for you, because I think the big thing that we kind of see with what we were just talking about, people want to be able to profit off of NFTs, and I think something we really want to see is the ability to bring our own art or ideas to life. Is this something that you kind of see how some of the games have to is the ability for people to bring their own ideas, their art into fruition? [Matt] That's kind of a hard question, and I want to divide it into two parts. I would say both yes and no. And the reason for that is that it can be done. But that doesn't mean every project is going to implement it. Why? Because you can build the Game around the NFTs, or you can build the NFTs around the game, which is kind of like the example with Axie and like the current games that you have out there, because the NFTs are specifically designed to work in a pattern in a way that the game itself implements, rather than the Game having to adapt to any new NFTs because there are not a lot of interoperability projects. And interoperability. What it means is basically a way for the same item to work in different ways in different games. There is, I think, the Loot project, and it's really, really cool because every single game can infer the stats of the items themselves. Like they just give you the NFT, so you can basically implement it in any way that you'd like. But that also requires a lot of manpower. It also requires you to be able to implement something that bridges that interaction with a random NFT. And that is not only rendering or models or physics or whatever it is, it's something that is really hard to plan when basically the NFT world is endless. So, yes, I believe there might be a project in the future. I can see projects coming up that sort of implement that, but I also see it's going to be very hard to do. So I think we might still be as a community as a whole. Like the NFT community still might be a bit far off from getting that done. It's definitely a huge stream to have, and it's definitely something that I would look forward to. But at the current time, with the current capabilities, I think we're still a bit far away from that. [Eric] So, Matt, it seems like a lot of these P2E Games require some sort of initial investment at first to play. But do you know of any games that don't have any buy in but still use the P2E Model? [Matt] Yeah, I can think of a few, honestly. There are, if I'm not mistaken, at least one or two games that have that implemented. But to be more specific, I want to talk about an upcoming game. It's called PHLIP. You're going to see it soon in the announcements, if not already. And this sort of ties back to the previous question, which is something that I like a lot. And PHLIP is one of the first games that sort of implemented this kind of freestyle mode into the NFTs because it's just a card game, but it's really fun, and I suggest you check it out. [Eric] So, Matt, you've intrigued me a little bit here about PHLIP, but you kind of gave us some info, but you really didn't let us know what it's about. Could you just give us a little more so our listeners can really get a greater grasp of what PHLIP is about? [Matt] So basically, yeah, this game has a similar model to Cards Against Humanity, but implements a lot of more of the freestyle way where you can come up with your own phrases. There's going to be cards that you could mint as NFTs, and they're also going to follow that model that we've mentioned about before. The general idea of the game, if you haven't played Cards Against Humanity, is to just come up with the funniest possible phrase to an image. An image is going to be thrown out, and then you just throw your cards. Whoever gets the funniest answer is going to win. And then cards are going to have different rewards. And basically, like, if you get voted by the judge, you're also going to get some rewards. And that's a really fun way of getting involved playing a game. If you're currently not involved in the crypto space that you like to have fun and all these fun games, that is a really good gate into whatever it is because you can be funny. And if you're funny, you have currently found a way to make that funny profit for you without having to go to stand up comedy and Saturdays. [Ryan] So, Matt, how do you feel about the Soldiers of the Metaverse project or even the PHLIP project? Are you guys, ACCEL or does ACCEL have any special plans to keep it fresh and relevant for new players coming in? [Matt] Yeah, that's a great question, and I think it would be important or interesting for people to know about that, because you might think that people that come in and made first come, first served, and they're the only ones that are going to get good rewards with time. And that's not true. The idea is that we want to bring in as many people as possible. We want to bring in people not only right now, we want to bring in more and more people as the project evolves and grows and implement new mechanics, implement ladder, implement tournaments, implement different sorts of things that will make the game evolve over time, like the soldiers of the metaphors that you're seeing right now that you're going to see at launch will not be the solution of the matters that you see two to three years from now. We want to make sure that this project goes on for a long while, and that requires a very delicate balance of a lot of things, but also a lot of work from our part to keep it fresh and making sure there's always, like, different things. So the community is always excited about the next thing that's going to come, and that's the same for Flip. I think while being a simpler game, there's still a lot of different things that can be done for that. So that's something that we're also looking into. [Eric] So, Matt, is there anything else you can tell our listeners about how we kind of plan to tie the ACCEL gaming ecosystem together as a whole. [Matt] Yeah, actually I have a very good nugget for everyone out there listening and that is that we are working every game in such a way that it is either directly or indirectly tied to one another. So if you're a part of one, you're always going to have preferred access to the next one. You can get probably early access to some of the newer games. You can get preferred staking when converting to one game to another. There's a million surprises coming off and I would strongly suggest that if you are not an existing holder you can come in now. There's a lot of cool things coming in, especially with NFT minting. So that's going to allow you to be part of a very select group of people that get to test a lot of these things early. [Eric] Once again, I want to thank all our listeners for tuning in again today to the ACCEL podcast. Please feel free to join us on Telegram or check the show notes for our link tree. [Ryan] And Matt, thank you for your time and for being a part of the ACCEL podcast, especially this two part mega episode. As Eric said previously, check out the show notes for all of our links and our link tree and even a full transcript of this episode. You want to go back and read some of the things that were said as always sit back, and ACCEL!-----------------------------------------The Information presented in this podcast is provided for educational, informational, and entertainment purposes only, and without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The Information contained in or provided from or through this podcast is not intended to be and does not constitute financial advice, investment advice, trading advice, or any other advice. The Information provided from or through this podcast is general in nature and is not specific to you, the user or anyone else. 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Our guest today is Eric Crowley, a tech investment banker with GP Bullhound. With investments in companies ranging from Spotify to Whoop, and clients such as AllTrails, Pinkbike, and Lingoda, GP Bullhound provides transaction advice and capital to many of the leaders in the Consumer Subscription Software space.On the podcast we talk with Eric about his 2021 report on Consumer Subscription Software, the truth about LTV calculations, and the new era of organic user acquisition.In this episode, you'll learn: Was 2020 just a “COVID Bump,” or a shift in consumer behavior? Are the Bumble & Duolingo IPO multiples justified? How savvy developers are adapting to Apple's App Tracking Transparency The truth about LTV The new era of customer acquisition Links & Resources Spotify Whoop AllTrails Pinkbike Lingoda Bumble Duolingo Instacart Match Group Netflix Noom Weight Watchers Tinder The Dyrt Day One Journal Automattic Tech Crunch Scribd Pandora Eric Crowley's Links Follow Eric on Twitter GP Bullhound GP Bullhound insights Eric's LinkedIn GP Bullhound 2021 CSS survey Follow us on Twitter: David Barnard Jacob Eiting RevenueCat Sub Club Episode Transcript00:00:00 David:Hello, I'm your host. David Bernard. And with me, as always, RevenueCat CEO, Jacob Eiting. Our guest today is Eric Crowley, a tech investment banker with GP Bullhound. With investments in companies ranging from Spotify to Whoop, and clients such as AllTrails Pinkbike, and Lingoda, GP Bullhound provides transaction advice and capital to many of the leaders in consumer subscription software.On the podcast, we talk with Eric about his 2021 report on consumer subscription software, the truth about LTV calculations, and the new era of organic user acquisition.Hey, Eric, welcome to the podcast.00:00:56 Eric:Hey, David, Jacob. Thanks for having me back. It's always a pleasure. 00:00:59 David:Yeah. Every year you release this report, so we had to get you back. This is the third annual Consumer Subscription Software Report, and I wanted to kick off just asking you a little bit about the motivation, and where your headspace is in thinking about creating this. Who the target is, and what kind of questions you're asking yourself as you prepare this report.00:01:24 Eric:Yeah. The report is the GP Bullhound Consumer Subscription Software Report. I call it CSS, which is kind of a playoff SaaS. This is the third year I've been writing it, and it started back in 2018. I worked with a company called AllTrails that was starting to monetize really well by selling subscriptions.It was like a light bulb went off in my head. I was like, this is a phenomenal way to provide a consistently improving product to consumers, where the margins are pretty good. It's easy to access a ton of different people globally through the app stores or through the web, and I just got really excited about it.I started putting some notes down on my own, and then GP Bullhound really supported me in saying like, “Hey, this is actually a pretty big trend. There's gonna be some amazing companies built around this space,” and companies like RevenueCat, that are supporting CSS companies, are just as exciting.So, we've been slowly educating ourselves. The goal behind the report is really just to force me to do some thinking about the space. What it looks like. What it will be. As a banker, you can quickly focus on transaction, transaction, transaction, and not really do any long-term thinking about where the world's going.It's putting myself in your guys's shoes. You guys are building RevenueCat not for what the world looks like today, but for what the world looks like in three to five years. I try to take the same approach with CSS, and think about where's the world going to go. So I talked to a lot of smart people as I put the report together. Entrepreneurs, investors, get their opinions.You guys can see their interviews in the report, and then ultimately we publish it. The audience I like to think about is entrepreneurs, people that are thinking about starting a CSS company, or already launched one, and they're looking to improve their metrics, or think about their target audience as entrepreneur-rich.By partnering with them, investing in their businesses, it takes them to the next level. The other way I like to think about it, it's my own personal scoreboard. I love to flip back two years ago and see, was I right about this company? You're publishing in public, so people can always come back to you and say, “Man, you were way off.” So, I look forward to that.00:03:26 Jacob:I remember the F finding the first one, the 2018, I guess, reporter 2019, whenever the first one you put out,00:03:33 Eric:2019, I think that's how we met actually.00:03:36 Jacob:Did you reach out to me or? I think I found it, or I don't remember what it was, but00:03:39 Eric:We've had a mutual friend, Nico introduced us and said, Hey, you guys should talk about this. and then I think we just went off on a two hour tangent.00:03:47 Jacob:But yeah, I remember being, it's still, there's still not a ton of like really focused research or writing on this space. and I think that, that, you know, this will probably won't be true for very long, right. As long as it continues to grow, but like going back to like who it's for. I mean, I imagine it as some, you know, end of the day, if you're employing.Pushing into some kind of lead gen. Right. But it does provide a lot of value for, you know, even if you're not interested in a transaction or whatever, just. Some like holistic data on a space. Cause like, I, the same, I mean, Eric, you said we're, we're thinking three and five years in the future. It's like, I wish like a lot of times I'm thinking like three to six weeks in the future.Right. and so it's even useful, I think, you know, even if you're, you know, I, you know, we're, we're in a bit of an interesting place as a infrastructure provider to be at kind of a bird's eye view, but it. Founder on one of these CSS apps, you know, like it is useful for you to know, like what's the meta environment, how's it evolving, you know?And if nothing else to like connect you with other people who have experimented with things and stuff like that. So, yeah, I think it provides beyond, beyond the, the, the lead gen aspect of it. It provides a lot of value for people. So I'm glad, I'm glad you're, you're still doing it. 00:05:04 Eric:Yeah. And just for any of the listeners, it is free. So you just go to the GP, bullhorn.com website. It's all easy to download and then you can see all our past reports as well. So 00:05:12 David:Yeah, and we'll drop it in the show notes. but, yeah. And, and, and speaking of all that, you know, it, it's something we as RevenueCat want to get more into as well. I mean, just seeing how much value you've created in producing these reports, and we're kind of sitting on a, you know, Processing over a billion dollars a year in, subscription revenue.We've got a lot of interesting data that, that we, that I'm very personally excited to share that we haven't, kind of had the infrastructure to, to do yet, but are, are getting there. And, so hopefully we'll, we'll have our own kind of, state of subscriptions that dives into the data and some of the trends and stuff in a different way than, than your kind of, strategy and higher level look at things.But when one thing that has happened, in the actually. It was announced before your last report, but actually implemented since your last report. And that's the app tracking transparency and iOS 14, which didn't actually ship till iOS. What was it? 14.4 or five or something. So, so we're kind of just now starting to see the impacts of it.And, and, you know, you took a couple of slides in your report to start discussing it. And it really is kind of one of the biggest topics and top of mind for subscription app developers, because it really is a huge shift in the landscape. So I want it to. Start with talking about that. And one of the things you shared in the, in the presentation is that you feel like it's a short-term pain, that's ultimately going to lead to a long-term gain.So I'd love to hear your thinking around what that pain is, but then also what you see the long-term game being.00:07:01 Eric:Yeah, it's a, it's a, great point. And, you know, anytime apple or Google make changes to their, their, their app stores, right. It's a seismic shift throughout the industry because it's something that impacts everyone. And so everyone has to be aware of these changes and then ultimately have a plan for them.And so I think that the change you're talking about David is really the. The implementation of, removing tracking for a lot of, a lot of these businesses specifically, like. And so what the change did with IDFA, is it, it really deprecated the ability for, for marketers within some of these CSS businesses to really accurately target people, specifically using Facebook or some of these other social networks.And so what it's doing is it. It's impacting the conversion rates on, CSS, CSS, businesses, marketing to consumers. And so if you just can't find that person that just is in love with, for example, biking, if you're a Strava marketer, it just takes you a lot longer to find that specific subscribers you might have to market to 10 people now to find two subscribers versus before you can market to five people and find two subscribers.And so it just means marketing efficiencies going down. And that can mean. Growth rates. It can impact conversion rates and ultimately impact just financials of these businesses. And so it's a pretty important consideration for any, CEO marketing team on how they go out and get their, their business in front of consumers.If Facebook's no longer as efficient, they have to find other ways. And so. So my, my thought is like, this is a short-term problem, right? It's something that's going to take people two to three months to adapt and find a new way to reach consumers. But ultimately my hope is for the space is you see the long-term game, which is what I was referencing.People really focus on organic ways of acquiring customers. Right? So instead of just pumping ads through Facebook and trying to find someone who fits a profile, you spend a lot more time really narrowly targeting your demographic, your niche, and then finding ways for them to find your product organically either.You know? So like a company that I work with, we sold a company called Pinkbike and so what they do is they partner with, the trade associations for mountain. And those trails associations now act almost as the marketing partner of pink bike to let consumers know about the fact that all the trail details.Is on, is on the pink bike app or it's called trail forks. And so that's, that's a really powerful, organic customer acquisition tool that they don't have to pay for. And so you're seeing, seeing the same thing happen with, like Strava is doing this, pre.com recently partnered with the NFL. So if your team's got a last fourth quarter fuel goal and you need to get something kicked, you can go to pray.com and submit a prayer for your kicker. I wish I was joking. It's a pretty brilliant idea. So I think this is really good for the sector overall, but yeah. Happy to dive into it. It's it's a fascinating00:09:37 Jacob:We it's a callback to a sub club podcast content, but, Greg, this, the plant app, this is something that they were doing, which is like, we're partnering with, plant nurseries. Yeah. To like, get their app into people's hands. And, yeah, I don't know if it's an earned media or. Bought media, but this is more like this is earned, right?This is like building an audience. You've seen it in the maker community, actually a lot, like in the indie SaaS community, more it's a different game when it has to be consumer scale. Right? Like there's a little bit different. You have to build maybe a bit more than you would in like, oh, just blog about.Built this thing and that's enough to get Indies, but you can apply the same thing, right? It's like produce content, produce something like low investment for users to get engaged with your brand because you're not building an app unless you have some, I mean, maybe you are, but you're not going to build something with very high, like multiples.Like if you're, if you don't have something unique to offer in the first place, but put that into like a more like lightly consumable format, start to build that audience and then make that an on-ramp and yeah, I agree. Like that's, that's something you own, right? Like your brand is. your brand doesn't exist on the app store, right?Like your brand can exist outside of these, like shifting sands and regulations and whatnot, and ultimately is like, you know, going to get reflected in your asset value if that's something you care about. Right. So, 00:10:53 Eric:Yeah, that's a key thing we talk about, right. If any business that we look at that's potentially selling or, or thinking about raising capital, right? It's like, how are you finding your. And if you're, if you're one channel is Facebook, and then consequently, like doing Facebook ads or apple ads on the, on the app store, that becomes pretty challenging.And so you want it to be such a good product, right? So it involves more work upfront. And just as you're talking about Jacob, the product's gotta be better. It's gotta be more efficient. It's got to reach consumers where they are with the problem they have. it becomes a lot more viral and a lot more sticky.So I think, I think it's going to be good for the sector.00:11:26 David:You wouldn't want to name names of course, but I am curious if. Had any clients, or just talks about anybody in the space where they were very reliant on Facebook specifically, and then, and have really struggled as things have changed. You know, I've been seeing some tweets around the, the consumer packaged goods space where some of these CPG companies are really struggling.And so I'm just curious. You know, without naming names, if, if there's any kind of high level things you could share around, apps that have struggled in this new paradigm. 00:12:02 Eric:Yeah. I mean, I definitely can't name names, you know, obviously I keep everything confidential with my clients, but even non-clients, you've seen CACs go up 20, 30%. you see, like, if you think about like conversion rates from installs to subs, That's a big metric of actual intent. Did you find the right user, right?Did someone just click on it and download it? Great. But if they're not actually subscribing that wasn't a successful transaction for you. And so the way I think about this, David is it's the app stores made tracking a lot harder, so it's harder to find your right consumer. So imagine if you're a CPG company, you walk into a grocery.And instead of stuff, being laid out perfectly across the shelves at the right height for you, they just tossed everything in the middle of the store and said, find what you want. Just go pick it out. Right. You're going to have much lower conversion. You're going to have much lower purchase rates because people aren't being targeted with the stuff they want to see.And so I think now you have to find, you know, it becomes more of a specialty situation where you're walking into a store that has stuff for just outdoor gear or very healthy granola. Right. And you're going specifically to that store for that. That's probably better in the long term, for a lot of these companies, 00:13:01 Jacob:Yeah, but there's, there's a lot of, there's a lot of folks that have benefited from this ease relative ease, right. And any sort of market disruption is going to be painful. I was like, anecdotally, I mean, David, we've heard on this podcast and elsewhere people who have just like straight up pause acquisition, who are like all re scrambling because yeah.You get it tuned to this very fine knife edge. And I imagine for like consumer physical goods, like DDC stuff, it's even worse because their margins are thinner than software. Right. 00:13:28 Eric:And you've got inventory and everything. Yeah. It's a totally different. 00:13:31 Jacob:But, you know, as you do like you, the market reshuffles and the people, I can figure it out, the fastest are gonna are going to come out the best.So. 00:13:39 Eric:There's going to be a shift though. So people under this is like that seismic shift that just shows how much of your reliance is on maybe one or two channels. Right? Two, two major tech companies sitting here in San Francisco. If you're super, truly relying on those and you're doing great, fine.But if a bump happens, right, how exposed are you? And so like, this will be a benefit. Right. I think it's going to be a huge benefit for Tik TOK. Right? I think people are finding really good ways to acquire customers through tic-tac. And so that's a very interesting channel. I think it'd be really good for influencers, right?If you have people that are very passionate about a certain space and then they go out and, you know, have a very core customer base that loves what they do specifically. It's going to be pretty powerful for them to.00:14:18 David:Yeah, and I was just gonna say, anecdotally, you know, we haven't done a super deep dive in our data, but at a, at a high level, I was. Bracing for our numbers to take a big dip. Like I, I mean, Jacob and I had talked about it in the spring about, you know, how, what is going to look like for RevenueCat, you know, are some of these subscription apps just going to completely unwind and people are apparently figuring it out because you know, it keeps going up until the right. 00:14:49 Jacob:I mean the consumer, the consumer need hasn't disappeared. Right. So maybe if they just weren't driven, you know, it's not going to, it can't just disappear overnight. Right? Like if you never, if you, if you are a Coke fan who never saw Coke out again, and it's like, you're still gonna buy it. Right. Like there's, there's, there's a certain amount of demand.That's just going to find the supply. But, but yeah, no, I mean, it's hard for us to, to definitively say looking at our data and aggregators. Cause there's so much, but they're definitely. Like this summer was definitely slower than we've had in the past. Like on my, as I'm writing my investor updates of the year and each month and stuff looking at it.But yeah, it wasn't like this catastrophic, you know, macro thing. And they were talking about a lot of like, you know, probably outliers that we hear about people who were affected, you know, more than others, but overall. I, I don't think our, I don't think our prediction last year of, of a potential recession was necessarily false.Like it doesn't, it definitely doesn't feel like it's sped up the ecosystem. Right. But it doesn't necessarily feel like a depression, right. Maybe, maybe a slight recession or just the normalization. 00:15:49 David:Looking at our data in aggregate that, some folks use this to their advantage and actually, and, and accelerated because they knew it was coming and they did focus more on product and organic and other things. And so for whatever, you know, losses, there were. Other folks more than made up for that.And that's it kind of the interesting thing about working with so many, I mean, we're closing in on 10,000 apps on revenue cat. And so, you know, you kind of have a pretty broad basket where you, you know, there are going to be winners and losers, but in aggregate subscription apps are just continuing to tick along and do really well. 00:16:26 Eric:David it's like you read directly from bullets on my report. I, I, I completely agree with you.00:16:34 David:Another thing I wanted to dive into was the, the COVID bump. Cause that's, that's another thing that's kind of been on everybody's mind is simultaneous to this. I was 14 and, and this is something we've talked about again internally, with revenue cat, is it. This summer was the, everybody who was vaccinated and, and Delta hadn't kind of bumped yet.And so, you know, may, June and July, there was a big shift socially. kind of it felt like it, especially in the U S that we were coming out of the pandemic. and, and so simultaneous to the app, tracking transparency, going into effect, we had these like societal shift. And then now we're kind of back into it a little bit with the Delta surge, but just curious what your thoughts are on how much of the boosts we saw in 2020 really was dependent DEMEC and then how much of that will actually linger as kind of shifting consumer preferences and shifting consumer spend.00:17:36 Eric:Yeah. I mean, there's, there's absolutely a companies that benefited from us is called the removal of inf in in-person conversations. Right? So like Bumble and DuoLingo, two companies that both went public, right. They both benefited because their, their business model is designed around, not meeting in person for the first couple of conversations.Right. And so. There's no way to say that they didn't benefit. the way I think about it, though, in this, in the CSS space, it's very similar to like the overall e-commerce space, right? Is consumers looked around to find a solution for a problem they're having right. Instacart you couldn't, you couldn't go to the grocery store or maybe you felt less comfortable going to the grocery store.So you tried an Instacart for the first time. Maybe you were, you know, thinking about meeting someone, you know, long-term but you never, you never wanted to try online dating or you couldn't go to the bar. So you tried online dating for the first time and sorry. What the pandemic did was it really opened up people's eyes to other options from what they'd been doing for the last 20 years, 50 years, whatever it was.And so they had to find other solutions to, you know, their demands, their needs. And so I don't, I think it's absolutely a COVID bump, but I still look at it as really as an accelerant of people adopting new products and services that they would have tried in three to four years. but the pandemic kind of pushed them to try something, to move out of their comfort zone and try something new.So, you know, I absolutely think you'll see a little bit of a downshift in, in some of these companies that had a really big boom, right? Like language learning. People had nothing to do for four to five months, especially over some of the winter times. So people tried new hobby, tried language learning, you know, that'll probably go down a little bit, but overall, if you look at it from like a five-year trend, It's going to be up substantially from where it was in 20 17, 20 18, 20 19, and 2020, you know, made it look like a little bit of bump, but eventually I think those companies will continue to grow and surpass what anything they did in 2020. 00:19:21 David:Yeah, that's really interesting.00:19:22 Jacob:I'll back that up as well with the, the unreleased, Jacob looks at graphs and then gives a, gives a hand wavy descriptions of them. But we, yeah, we, we were, I was kind of bracing for it as well. And then I would say this summer was slow and like, David was. We're not sure why. I think it was, I think it was a number of factors things have since picked up again.But I think generally summers are slow for software a and then B. Yeah, I think we were seeing kind of like a little bit of the payback for, for COVID perhaps it's a, it's a vial. I think it's a plausible theory. We don't, it's really hard to prove. but we have not seen, you know, we, we saw our COVID experience was really drastic.And we have not seen. Similar, like back off from that, like, it has been like, it has been like we just compressed six months and I'm saying partially, this is just revenue casts, individual story because of where we were last year. But then I think also it's, it's indicative of the system in general.It's like, I think, yeah, we just compressed a whole bunch of, like consumer behavior change into like a very short period of time. And yeah, we're not gonna be able to keep that up. Right. We're not gonna be able to continue. To, to crunch that in, or we'll run out of consumers eventually. But, but it doesn't look like everybody's, you know, because, you know, I think the story for CSS in general, it's like we've delivered value for people, right?Like it's, it's a good, it's a good product, right? The whole line, not every product is good, but in general it's like a it's, it's a decent deal. And so I, I think more people discovering that. Yeah, it can only get bigger, right.00:20:55 Eric:Yeah, I think we talked about it in our first year, our first time together, right on the last podcast, which is if these businesses are truly making consumers' lives better, this is going to be a very long-term.00:21:04 Jacob:Yeah. 00:21:05 David:And speaking of that, and the two companies you just mentioned, in the, Time since we last spoke, but Bumble and DuoLingo went public and some other consumer subscription, apps went public. so tell me a little bit about your, your perspective on the, the public investor. Excitement for CSS.I mean, we're seeing pretty high multiples in the both of those IPS did, did very well. so what are you seeing in the, in the public investor space?00:21:33 Eric:Yeah, I think, I think the public market has really woken up to this business model, the power of it and understanding, you know, it's public markets. They do a lot of pattern matching, right? If they've seen something be super successful, they look for something that looks similar to that. And so I think a lot of people are waking up to, how powerful Salesforce is not waking up.They're well awake, very aware of SAS businesses. But I think they're seeing that same pattern starts to take, hold on, CSS. It just has different metrics. Right? And so, you know, Bumble's now public, the match group's been public for quite some time. Once I spun out of IAC, you've got Netflix and Spotify, which are fantastic examples of the international global reach of Content, and how consumers are very sticky for something they love.And so. These businesses who can get to scale really quickly, like you nuMe, right, is a competitor to weight Watchers. Weight Watchers has been around for decades, but Newman built a better mouse trap and they acquired customers at a really quick rate. And, you know, they're well over 400 million in revenue and ready for the public market.So I expect them to go public. Pretty soon. And so I think there's going to be a lot of businesses that follow them that are using this, this metric. So, and then that'll cascade all the way through, from public market investors as, as exit opportunities all the way down to, you know, series a series B investors, seeing this business model work and scale.00:22:47 Jacob:Yeah. I mean, I guess my, like, what's your, like, I, I, when, when we started seeing these go public in the last, like couple of years, so, well, I mean, honestly, it's like, Since we started RevenueCat, like was actually the, kind of the first unicorns, even like, I guess Bumble might've been passing unicorn when we got started, but like there weren't a ton and now it's like every, every month there's a funding announcement for a CSS company.That's a, that's a university. I mean, partially that's just like valuations going up and stuff like this, but like, how do you see. The evolution of this market. Long-term, you know, so DuoLingo pops becomes the first, you know, are they going to be like Salesforce and just be dominant in that space forever?Or do you see it being maybe more dynamic than sasses?00:23:31 Eric:I think it's a little more dynamic than SAS for, for a couple of reasons. One, new consumers like to try stuff, right. And so if it's with like a Salesforce or something, right. That integrates into your day to day operations from a business model perspective, right. So if something breaks there, right.Your business. 00:23:47 Jacob:Is very high. 00:23:48 Eric:Yeah, it's a little higher, right. And it's not just you using it. It's your entire business. Right? So you've got 10 people using this product or 20 people or 5,000, depending on the size of your company. Right. In CSS. It's it's you, maybe you and your family. Right? So it's a little bit of a different switching cost.So that's, that's one. However, these companies can scale a lot of. and they can, they don't have like the heavy, heavy cost and, you know, on the sales and marketing side. So I think they have an ability to actually get to profitability a lot faster, especially if they have an organic customer acquisition engine.And so I think that's going to be a big difference between that, between CSS and SAS. 00:24:23 Jacob:So, yeah, you mentioned the metrics are different. What are, what are the metrics that folks are, public investors are looking at for these companies that it might be different from a SAS company?00:24:33 Eric:Yeah. I mean, a lot of them are the same metrics, but the numbers that are like good are different, right? So like on a SAS business model, right. Revenue growth is just as attractive as a CSS business model revenue growth. Right. Everyone wants to see high double digits, triple digit numbers on revenue growth.But like an interesting thing is net revenue retention. Now that's very different, right? In CSS, you typically don't upcharge people or have additional seats be filled because it's just one person. Right. So, you know, maybe you get an. 00:24:59 Jacob:It's not much expansion opportunity. 00:25:00 Eric:Yeah, you can, you can do maybe some, some packages, upgrades, and people are starting to experiment that you can pack it and you can experiment with bump, bundling 00:25:07 Jacob:But it's certainly never going to be greater. It's never going to be net positive, right? 00:25:11 Eric:No, you're never going to see a net positive number where a lot of the SAS businesses, right.People are looking for net revenue, retention, numbers of north of one, 20, 120% net revenue retention 00:25:18 Jacob:I mean the opposite of churn, right. Which if you have a CSS business with opposite, Congratulations. like 00:25:25 Eric:Yeah. You're doing something well, and I haven't found it yet, but yeah, 00:25:28 Jacob:You might be the only one 00:25:29 Eric:Yes, I think that's right. 00:25:31 David:Quick, point though, to counterpoint to what y'all were both just saying, of all the apps, dating app, it's totally slipping my mind. 00:25:40 Jacob:Tinder. partnership. David, look at us. We're like on a wavelength. 00:25:46 David:They, they have in-app purchase. They have consumable in-app purchases to boost your, profile. They're one of the few that I've seen that could potentially actually have a. A a positive, net revenue retention. whereas most subscription apps are just a subscription. it's going to be interesting to see if other subscription apps can pull off that sort of model that you could actually generate a, a net net revenue retention. 00:26:19 Eric:I think you nailed it, David. So that's coming from. Right. I think people first experimented with, Hey, how do I get someone to buy my product every year or every month? Right. And now is how do you make it even better? So they're starting to listen to their core users. And we talk about this a little bit on the LTVs.And what do these people want and what makes this experience even better for them. And I think you nailed it with Tinder, right? It's the most, it's the easiest thing to convince people to, to encourage more is more, you know, more relationships, right? People love more relationships and people are willing to pay for that.And so, you know, then what else, what else could this go down the path of, right. What other options could people pay for additional services? Or what we've seen is like marketplaces or transactions spinning on. Right. So if you have a really passionate user base and they're going out there doing, camping, for example, like on, on the dirt, it's a camping site, right?What about doing a marketplace to buy and sell use tents right now is not a subscription, but now if someone's paying, like, okay, now they bought something through your marketplace and you get 10% of that purchase price. So there's going to be a lot of stuff. I think that happens there, to encourage that, to encourage that LTV numbers start rising, I just haven't seen a ton yet, make it happen above 00:27:26 Jacob:It's a scale problem. I need to do that either be at such scale for that to make sense. So I was going to say for anybody, listening to this, that hasn't reached 20 million in ARR, probably north of that do not add a marketplace to your 00:27:37 Eric:I totally agree with that. Very, very much focused focus, focus. And so I would even say like closer to 50 00:27:43 Jacob:Yeah. I mean, until you're like, how do we get this thing public? Or how do we show, like, how do we show like N plus one revenue streams, right? Like it's kinda more what it's about than it is necessarily the revenue generated. 00:27:53 Eric:I'm just a dreamer though. You're just a realist. I'm here, I'm here. And you're just telling me all that stuff that could go wrong. 00:27:58 David:One of the things you just kinda touched on that I wanted to dive deeper into was, was a truth about LTVs. And I love this slide on the, on your presentation, kind of defining these two cohorts, which I've never heard, defined this way. And I really loved the analogy and I'm going to start sort of stealing it from you and use.And crediting you of course. but in the presentation you define, tourists and locals, and then talk about kind of the importance of identifying these different cohorts. So tell me about Who the locals are and why that matters and who the tourists are and how companies can start, analyzing their data to understand this and better target marketing, better, craft the experience in the app and, and those sorts of things. 00:28:46 Eric:Yeah. So we're going to geek out here guys, and, really go deep into STSS. Right? So this is where, this is where my brain goes sometimes on a Saturday night, which is just exciting. but so the way I've been thinking about CSS a lot, and so the LTV component of CSS, which is lifetime value, Which I'm sure all your listeners are very, very well aware of is kind of like how much money can you make from this consumer over time.Right. And it's a function of your pricing and it's an, a function of your turn rate. And so, a lot of people are very focused on this metric as investors or buyers, right? Because it's effectively, how valuable is your customer? So it's an extremely important metric. The problem with this metric and lots of other metrics is it's, it's derived from an app.Right. It's looking at all your users that come into your, in your ecosystem is paying customers. And then how do they perform over time? and it's, it's driven, it's driven off an average of all your users. And so when I've gone through some of my client's data and you look at their user base, right, we, we quickly discovered there's a, there's kind of two different profiles.And I won't use any names here, but let's just, let's just say it's, a walking company, right? So you're, you've got people that go out and they, they sign up, you have a hundred people that. And 20 of them start walking every day and they're, and they, this is what they love and they're tracking, they're walking and you've got another 40 that do it for like a month or two.And then they kind of drop off and then just like, I'm going to go do biking or skateboarding or something. And I switch and you've got another people that sign up. They subscribed to it because their friend pressured him into it and they hate walking and they're never going to walk again and they turn off immediately.Right. So you kind of have those three different groups, some that are just going to do whatever. Some that do it for two to three months and then leave. And then some that do it the first month. And then say, forget this. I'm never going to use this again. And so the problem is your LTV of each one of those three groups are very, very different.And so what, we've, what we've been guiding investors and entrepreneurs, as they think about their growing their businesses, really find out who those locals are, who those people that are going to come and use your app every day, every week, every summer, whatever, whatever the metric is that you're looking.And find ways to measure that, right? Because ultimately that's who you need to bring to your community. And one, those people make the community run more robust, right? Cause they're constantly contributing feedback into the. To, they're much more likely to stay around with you guys. And so you need to find those tools that they're looking for.Right? Like seeing around the corner and saying like, okay, this person loves walking. What else can I provide them? What about a weather forecast? So now that they are about to go out and walking, you know, what does the weather look like? And, oh my God, this is now, this is my one-stop stop for, for walking.And so I think w we've been guidinGP Bullhound's like if you use the averages as a broad metric and that's great, and you should, because investors are going to want to know that, but, but really dig deep into your, your cohort and understand like who's using this every day, all day and what do they need. And so if you can really identify that and show that LTV to, to invest in.I think you can get people a lot more excited than just like that average LTV, right? Cause this shows them potential of what it can be over three to five years, which is really important if you're two or three year old company. Right. And try to convince someone to invest in you showing them that lifetime value of the tour or the locals is going to be a lot more valuable than that average.00:31:46 Jacob:I mean, if you think about just as the, you know, I think it's one of the, you highlighted one of the hard parts of assessing these businesses early on, is that yeah. Your cohort, your total subscriber base is very heavily biased on like your most recent cohort, because often you're also growing, right?Like that's often, like your most recent cohort might be the size of your first five, you know? just because, and for that reason you can really have scurry looking data. but you know, if you think five years from now, mostly. Those other two groups you mentioned there they'll have turned out from most cohorts.Right? And then the only ones remaining for four years of cohorts will be these locals and these long-term retention. And then your total subscriber base is gonna look very different than it does today. Right. And yeah, I'll admit revenue. I've tried to solve this problem in the product. And we still are trying to solve this problem in the product.It's how do we like show people? Cause you're, you're dealing with a mixed population, right? And like you, you can also also run into a problem with begging the COO or like doing very, like, look, you got to invest in and say like, look, look how great my retention is. If I just ignore them. Bad users. Right?Like, let me just look at the good ones. Right. But there is something there in that. What you're talking about, Eric, that long, that very long-term view is that if these users really do retain for a long time, eventually they will be the lion's share of. Subscriber base. And that churn that we talk about, like, you know, if you're adding 1% of your total user base, the most you can experience off of that as like 1% of churn, right.Versus when you're adding half, you know, if you have 110,000 subscribers and you add 10,000 in a month, that's going to be a huge effect to your overall subscription subscription base. Right. so yeah, I think, I think, you know, we certainly have a lot to build on the tooling side. Right. And I think it goes to what you're talking about.Air. We're very early. Like, I think we've just kind of solved infrastructure, like infrastructure. I mean, I would even say kind of, cause there's a lot for us that we need to do yet. but as far as like data science and actually yeah. Being able to outside of a spreadsheet, understand this stuff. It's it's, it's not trivial.It's not trivial. All 00:33:51 Eric:It's extremely hard. And I think like, cause there's so much more you could do once you've broken those two cohorts into tourists and locals, right? Like how do you acquire the locals versus how do you acquire the tourists? Are tourists coming through like Facebook, apple store and the locals are coming from referrals.Okay. So maybe your Facebook spend, is that even worth doing the spending on right. If they're, if they're turning off after a month or two, you know, subscribers is a vanity metric, right. If they don't. All right. You can grow. We talked about this in our 2020 report. We have like this cheetah versus thoroughbred.Right. And it's really easy to show a ton of growth. And you've got all these subscribers and everything is fantastic. Right. But if those subscribers get tired and they turn off right away, you kind of probably wasted money on them. Right. Maybe you got paid back in a month, right. So you didn't lose like on the CAC spend right in here, but you're not building your business.Right. You're just gonna you're pinching pennies. 00:34:36 Jacob:But not a lot of work. Right? Like it's not actually getting translated into business 00:34:39 Eric:Exactly. So is it better to kind of focus on the product, right? Figure out what those, those, tourists are using and spend less time on the marketing side and really nailed the products like, Hey, you'll probably grow slower, right? And That's an issue. That's a risk you have to take, but maybe you can grow more efficiently, more capital efficiency.00:34:55 Jacob:Capital's free now, so that's not a 00:34:58 Eric:That's a fair point of half my fault, I'll take full responsibility for some of that. Right. 00:35:03 Jacob:I think it's interesting how this like feeds into, you know, kind of going back to targeting and ad targeting how often. Optimized Facebook campaigns on like trial conversion. And that doesn't even that doesn't, that's all your tourists and your locals. I mean, maybe some of those that never even start a trial would be cause, but there's a lot of tourists in that group that started trial right.Or convert a trial. And a lot of people are targeting off of that. Right. And so as these methods become less. Good. it will force it'll force developers to yeah. Maybe do one of these scary things actually talk to users, right? Like actually like find those locals, like go in your analytics. And I think just the thing as you were talking about, I just want to point out that, like, I don't think you necessarily need to define this off of monetization retention either could just be retention, like pure usage retention, but it could also be engagement.Yeah. I think about the way Facebook, Oriented their growth teams very early on, which was like findinGP Bullhound that connected, like that was a really key step for them in their product, was to get people to make like three or four. I forget there's some number of friends and they oriented all of their growth efforts around that.Find the thing that people do in your. Shows that they're engaged and give them opportunities to show that. And then, you know, you can use that as an indicator. Okay. Talk to those folks and actually talk to them, right? Like find out, always put something in your app that lets you reach out to them in some way.And like, have you can get on a zoom call. I've done. It's easier now in SaaS land because like, I, I, I, people I'm an app. People like I know how to talk to them, but when we were, when I was working in consumer. Phone calls were more awkward, right? It was different. You're not going to books like outside of computer land, but still like just incredibly valuable.And, and, and, and I think like, you know, if we want to talk about the way to build the way to fully realize how CSS is going to, I'm just going to go all in on your turmeric, by the way, I said, I'm going to, 00:36:57 Eric:That.00:36:57 Jacob:I'm going to push it. We're going to standardize. But 00:36:59 Eric:It's not trademark, but knock it out. 00:37:01 Jacob:All right. So to fully like, to fully realize the potential to like help problems for people.Like, I think we need to lean into this more of this model. Right. Rather than I've always kind of like had an uncomfortable relationship with how our RevenueCat fits into the like hyper fast monetization stuff. Right. I'm like, get users, check your CAC, put more money into Facebook. Right. And so, the more the industry gets away from that. The happier I am. I don't know. Like you said, maybe it doesn't go quite as fast, but I think the overall Tam will be larger. Right? If we take that approach,00:37:33 Eric:Think that's right. And, you know, I mean, I've talked to a bunch of founders that haven't raised capital. Right. And they build something that like their users love. Right. Like, so I don't know if you guys saw the deal with day one that got bought by automatic braised almost as your outside capital.Right. He built. 00:37:46 Jacob:Big fans that they won. 00:37:47 Eric:Yeah. Yeah. I was a big,I got it's an awesome business and he did that exact same thing. Right. He just listened to his users. He didn't care about vanity metrics grew really nicely. Right. And it wasn't like, you know, he's not getting tech crunch publishing, but that's fine. Right. You know, on an amazing business.And then, you know, I've got a fantastic exit out of it. So I think, I think people are really waking up to that's a very much a possibility here in the.00:38:08 David:Yeah, one thing I wanted to highlight too, in that graph that you made, and for people that are listening to this, you can go to the show notes. We'll have links to the, Eric's presentation and you can find this chart, but to visualize it00:38:25 Jacob:Page 18. it open right here. 00:38:27 David:Following along at home, the, line for the locals drops.So, you know, even, even for locals, you're going to have some turn early on, but then it essentially flat lines. and I'm sure you did that very purposely to kind of illustrate how. How long term some of these, these, this retention can end up being, and it's something we've actually been talking on the podcast about recently is that we're so early in the space.We don't even really know what, how to measure LTV. Cause you're going to have people who ended up subscribing for decades. and years and years and years, if not decades. And so, and, and then, you know, to your point about the cheetah versus thoroughbred, another great chart in the patient number, Jacob Page number00:39:16 Jacob:I 00:39:17 David:Cheetah versus thoroughbred but in that tuna versus thoroughbred, The other aspect to locals, and we're kind of touched on it earlier is that those cohorts start to stack. So when you identify this cohort, that is going to be a very long-term cohort. That's going to stay subscribed and have very low churn. You, you acquire a hundred thousand this year, and then they're still there next year.And you put a hundred thousand on top of that. And those are still there next year. And by year three, you know, you just continue to grow this pie of people who are very, very sticky in the product. And I think that's part of what. you know, what you're talking about with delinquent and Bumble and other companies is like, we're still just starting to understand even as different as this is from SaaS.We're starting to see similar dynamics as far as. Early on the churn is so high, but then you do have this really strong stickiness over the long-term that, that, that can build a really healthy business of people who really love your, your product and really are invested in it and are going to stay for a really long time.So yeah, I just wanted to point that out that, that I, I love that aspect of the chart of how flat that line is for the locals. 00:40:35 Eric:I mean, you, you can see it in your own spending patterns, right? Like how many of you guys have subscribed to Netflix or Spotify for more than five years? I bet it's a good chunk of your listeners. Right? So, I mean, if I look at my phone, right, I'm going to subscribe to all trails for the next decade, 00:40:47 Jacob:Yeah, I've got CSS. I I've started subscribing to in 20 13, 14, like as 00:40:52 Eric:Yeah. 00:40:52 Jacob:It was a thing, 00:40:53 Eric:I've, been a script user for four years and I still download audio books or download other books from like the San Francisco library. Cause I'm probably the cheapest banker of all time. but you know, I still use script 00:41:04 Jacob:It's finding margin, Eric you're finding margin. That's what that is. 00:41:07 Eric:Exactly. I've pinched counties all day.But yeah, so I mean, I, I think those tails David to your point are still being written. And so that's the whole point, right? If you use average LTV and you say, all right, well, we have 30% churn that math means you lose every user in three years, and that's just not how it works. And if with really good businesses that are delivering value, right?And so then once you convince people of that, right, the investment case becomes a very different company.00:41:30 David:And speaking of that, you, you had a great, slide on investor benchmarks. And so I wanted to get to that real quick, tell me about how you, how you thought. These different metrics. And what, and how investors think about these metrics? Because you know, we're talking about LTV and in there you have LTV to CAC of you, you know, for a really strong app, that investor would be super excited about.You're closest to. Six X versus less than three X, you start to cool off. So, yeah. Walk us through each of these metrics and kind of how you think about it, how you think investors think about it, And even how that's kind of maturing as we understand the space better. 00:42:10 Eric:Yeah. And just to note like these metrics are all different for different types of businesses, right? If you've been around for a year, these metrics are very different versus if you've been around for 10 years, right. If you're in high growth, you know, venture back, spending a lot of money, these metrics look very different than if you're a bootstrap business, you know, just trying to inch out.You know, 10% growth a year. Right. So they can be very different. And the important thing is how does the story of your business and what you're trying to accomplish tie to these metrics? Right. So that's what we spent a lot of time talking to founders about is, is what's good based on what you're trying to do.Right. So it's just how you, how do you tell your story through the metrics? but yeah, so a couple of your points on the S on the slide, we talk about like user growth rates, gross margins, LTV to CAC, churn rates, free to paid conversion rate, and then sales efficiency. and then, you know, just to talk about something different, we, we talked about LTV a little bit earlier, but maybe talking about, churn, right.And so like how quickly do people churn off? Right. And so that's, there's a couple different ways to interpret churn, right? It's one, they didn't find your product. Too. They thought it was really expensive. or if they're not turning, they really love something you've put together. Right. And they decided to pay you multiple times for that either monthly or annual.And so what we just try to do is try to tell the story of where the business is at and where it's going by looking at these metrics. And so, you know, that's why it's so important to truly understand these metrics, because if you don't understand the metrics, it's hard to tie that to the story. so we spent a lot of time with any client or even non-clients just talking about this stuff to truly understand, you know, what investors care about.And it's, you know, if someone's buying the business, they may care a very good. They may care about very different metrics for someone who's investing your business for growth, right? So someone's going to put 40%, $40 million on your balance sheet to go grow. They may be focused less on LTV to CAC now because your LTV is not formally formed, right.They don't know how good it is, but they will focus very heavily on churn, which is a reflection of how good your product is and how good you're finding consumers that love your product. Right. So those, those are metrics that they may focus. They made me more comfortable spending a lot of money in the next two years.Right. So your CACs going to look a lot worse because they watched, you acquire a lot of users to make the platform a lot better. Right. And a lot of CSS businesses, right. UGC is a, is a, is a spinoff of user activity on the post. Beautiful uploading photos reviews. They're adding new new items on, on the platform for other users to use.And so it's worth spending more money to get those people in the first two to three years because your platform becomes that much better and that much more valuable, right? So you may be willing to burn down to a, an LTV to CAC of three X or something like that in the near term, or sometimes even two extra one X, because it's a land grab for those.Once you're on their platform right now. You want to see that LTV to CAC, start to move up a little bit, right? So you start to put it to four or five, six X, LTV to CAC. So it's all about where your business is. It's each different stage, but it's important to have a story and a message around why your numbers are, what they are.00:45:03 Jacob:Of the, I have the slides up in third slide, 37 for anybody who's following along at home. all of these as a veteran SAS CSS person, every annual user growth rate, gross margin to be cash I'll clear me, sales efficiency ratio. Can you talk about that one? Cause that one's, that one's, not as a little foreign to me. 00:45:22 Eric:Yeah. It's, it's a, it's more of a metric that's come out of SAS just to be honest. So it's thinking about like, it involves like how, how many users are you gaining? It's how much revenue you're gaining versus how much money are you putting out there? So it's a little bit of a different metric. and most CSS businesses don't get to that yet because they typically don't have heavy sales team.And so we've included it because you're starting to see some of these CSS businesses really start to grow. And so how much revenue gaining versus how much revenue you're losing and how much is it costing you to do that? And so that's when you're starting to get into like the tens to $20 million of, of, marketing spend a year, it's, it's, important to understand like how efficient is that spend being, and this is the best metric 00:46:00 Jacob:We, it says called sales, but you actually throw in marketing, spend in there as well. So it's like all go to market spend 00:46:07 Eric:Yeah. Are using head count, not just like the ad dollars. right. 00:46:10 Jacob:Right. 00:46:11 Eric:It's like a fully loaded CAC number, like 00:46:13 Jacob:Your, all of your people telling Facebook what to do, 00:46:17 Eric:Yep, exactly. Exactly. 00:46:18 Jacob:Content graders, like all that stuff, right? Yeah. 00:46:20 Eric:If you've got a hundred people running around campus, right. Promoting your app. Right. Okay. How much those people cost. Right. So it's an important way to think about how much you grow. And it's a way to think about like how well can you grow a capitally efficient capital with limited amounts of capital.So it's an important one. We look at it, it's typically a later stage, right? So you've gotta be like north of 20 million of 00:46:40 Jacob:So he's going to be super high when you're small, right? Because you're, you're your. 00:46:43 Eric:Sir. Request important. 00:46:44 Jacob:People are discreet. Right. And that you can't, you're not continuous. So, and also your, your, your revenue just grows less because of like, you know, you're smaller, you're less, well-known like, you're less is momentum is things like this. 00:46:56 David:Well, we're starting to run low on time, but there's so much more I want to talk to you about, but just to hit one last thing. I also love this chart you did, of Pandora versus Spotify. It's such a. And encapsulation, really everything that we've been talking about on this podcast is to see how well Spotify revenue has compounded over the past few years versus a Pandora, which, which look was the juggernaut.You know, when, when, when Spotify started. so, so walk us through this chart. And in how and why you think, you know, Spotify was able to, to grow the way they did while Pandora really struggled. And obviously there's a ton of, you know, other business factors and execution and other things. But, but I think overall, this does speak to the power of CSS.00:47:54 Eric:Yeah. And this is, this is something we did back in 2020 when we were just trying to decide like, Hey, what's is this CSS thing real? And, and a big question you get from, from investors. And listen, I think a lot of them have stopped asking this question because the case studies are out there is why would someone pay monthly or annually for something they can get for free?And by get for free, it means listening to, or watch. Right. And so I wanted to see like, alright, graphically or like actually numbers to will people, more companies make more money by making that really hard decision and say, pay me for what I'm giving you first. I'll give you something for free and exchange every half hour, you watch two minutes of ads, right?That's a really hard question to say, because it involves you putting a lot of value in your product. And so entrepreneurs, you know, product developers have to. Is this worth money or am I giving something out to people that, Hey, they'll kind of use it if they get it for free. Right? So it's a, it's a gut check for people to say, like, did I build something that someone will buy?That's hard. That's really challenging. Ask yourself, especially if you've started with advertising. and Spotify, you know, listen, they were a small company based in the Nordics, right. Versus Pandora US-based juggernaut and, and raised a lot of money. Right. That's a tough challenge. And so they took a really tough thing and said like, Hey, we're going to get.And make people pay for our product and we're going to make it better. But the crazy thing that happens though, right, is you make so much more on a user from subscriptions than you do from average. Right on advertising. You're trying to pick up pennies per subscription on some or pennies per user on the subscriber.You're making 10, 20 bucks a month, depending maybe maybe $60 a year for a subscriber. So the amount of users you have compounds so quickly, and then if you have that heavy retention, all of a sudden, you've got these really thick layers of cashflow that come in every year, use that cashflow. You invest it back in.He invested back in product and you do it again and again and again, and all of a sudden you've got a better product. And if you have a better product, people will come to it. And if it's something that they're using daily, right. Why would you not be comfortable like paying five bucks? Right. If I think about like how much my Netflix subscription is, right.It's $11 a month or something like that. Right. Well, I probably watch 10 hours of Netflix a month, right? So I'm paying a dollar an hour to be entertained. Pretty good deal. And so, like, I think if people, people start doing that math and you start to see like how powerful that that subscription is for user versus an ad driven, it becomes pretty interesting.And so I think you've seen this case study play out over and over and over across CSS, where if you build a good enough product, you know, a 10 X product versus the free option, people will pay for it. 00:50:24 David:And Spotify does double dip as well, which is interesting is that they have a good enough free tier and people can listen for free. But they choose to spend, even though they can. And so, so Spotify is a great example of, of double-dipping with a great freemium tier, but then a good enough product in a compelling enough reason that people will pay.00:50:47 Jacob:Yeah, another dimension. I don't know the specifics of Pandora and Spotify. It's like fundraising history, but if you have like the subscriber. Subscription revenue momentum makes capital more easy to access. And you look at some of this. I think of some of the strategic stuff that Spotify has done. Like they got the Beatles on Spotify pretty early on and lets up, they spent big on partnerships and Content and stuff.And if you have momentum, if you have hard dollars, it's a lot easier to go to an investor and be like, Hey, like I want to raise X million dollar. Revenue growth. I have, like, this is very clearly a business. I can remember raising money in the pre revenue is everything era or like trying to raise money.And it was like a lot harder. Right. Cause it was just like hand waves and we're going to grow and like, and now it's like, yeah, for better or worse, you go over the curtain and you show something. Right. But the big benefit too, I think for founders, it's not just for investor, for founders. It's like, yeah, you build a great business.You're building a safety net, right? Like if you can't fundraise, it's not the end of the world. Like you have options. And I think that's part of the reason why also, I mean, now we're getting into fundraising like macro, but that's part of the reason the funding environment is crazy because businesses are sturdier than they've ever been.Like they need capital less than they've ever needed it. Right. And so like, that's why it's gotten cheaper. or, you know, evaluation's gotten higher same thing. Right. So, Anyway. Yeah. And this is a fascinating to put this. I already was not on here, which was my horse. And I was like really pulling for them.And then it gets to a whole different story of why that's not on there. But, but yeah, it's fascinating.00:52:11 David:Well, I think that's a really fun place to end the story of Spotify, one of the biggest juggernauts in the space. We're going to include in the show notes a link to the report, a link to your LinkedIn and Twitter to follow along.Anything else you want to share as we wrap up? 00:52:27 Eric:No guys. Always a pleasure to join you. One thing for your audience users, we are trying to make the GP Bullhound CSS report a resource for founders. This year, for the first time ever, we did include a link to a survey.So, if you want to contribute your data, what we'll do is aggregate everything, anonymize it, and then we'll provide back a summary to users to say, “Hey, here's your LTV to CAC. How does this compare to other founders at this stage?” We are trying to be a resource. I'll probably give you guys that link, if you don't mind. We'd love to have as many people as possible. No pressure.Of course, all of it would be anonymized. This isn't a marketing tactic for us. It's us giving back to the community. We'd love people to take a second to do the survey, but if not, don't hesitate to email me, tweet at me, hit me on LinkedIn with questions, comments, and specifically stuff We got wrong. Absolutely love to hear where we can learn.00:53:22 Jacob:Yeah. 00:53:23 Eric:Because we're not building, we're just talking about what you guys are doing.00:53:26 Jacob:By the time you print this thing, it's like, stuff's changed, right? Like it's changing so fast.00:53:32 Eric:The whole Apple thing when we were publishing was happening everyday. And I was like, this is unbelievable.00:53:36 Jacob:And wait to...00:53:36 Eric:Since July, and I have to change every minute. Yeah. I had to change a PowerPoint. You guys had to change code. So I think one was a lot harder.00:53:44 David:Well, it was great having you on, Eric, and we'll have to make this an annual thing.00:53:49 Eric:Sounds good.You're welcome.00:53:51 Jacob:Yeah, we'll see you next year. 00:53:52 David:See you in 2022.00:53:54 Eric:All right. Thanks David. Thanks Jacob.

Joined today by Dr. Eric Maisel, best-selling author of over 50 books and a world-leading expert on creativity, creating meaning, and building better habits. I was blown away by his insights into living a great life and I am incredibly excited to share this with you guys. Max Out Insights: • There's no finding meaning, it's a decision we make ourselves to have meaning in our life. • Sometimes we don't feel meaningful serving our meaning in the moment of action. • We owe it to ourselves, to live in the moment and be present. • Daily practice is essential in your journey of self-discovery and mastery. It's a path to exercising your meaning and purpose. • Align your time with your priorities and make the decisions you make during those times count. Max Out Quotes: • “A daily practice gives your days meaning”. • “The only way to get to our life purpose is by knowing what they are and by putting them in our daily practice.” • “Meaning is a decision you can make.” • “Almost nothing beautiful or brilliant happens unless a person has thought about it a lot.” Connect with Eric: All the information on books, contact info and posts can be found at www.ericmaisel.com make sure to also check his contribution to the Good Men Project at www.goodmenproject.com/author/eric-maisel/

https://www.rackology.org/ Bruce: …Rackology, Eric Fitzgerald and Jason Obermiller, and your host Bruce Hutcheon with Whitetail Rendezvous. We joined up and we’re sharing some ideas about, you know, land management and food plots. And why are we doing this? Because there’s a lot of misinformation out there, there’s a lot of advertising out there, there’s a lot of promotion out there, there’s a lot of sponsors out there, people who are being sponsored by XYZ, you know, company. And we go, “Wow, I’m going to buy some of that.” Well, you have no earthly idea why you’re buying it except that there’s a green field behind the person, you know, shooting this wonderful [Inaudible 00:00:40] saying, “I use X.” That’s marketing, I get it. But when you start drilling down into it, you know, what are food plots, what aren’t they, you know, food plots start with, you know, with seed. Some sort of seed has to come out of the ground so the deer are going to eat it, and there’s a lot of prep work that goes into that. So, guys, let’s jump into it. We get about a half an hour to share with our listeners what food plots are and what they’re not. Eric: All right. Well, I guess, looking at food plots, they are, as the name implies, they’re either…they’re a plot that you plant that bring wildlife there for mainly two reasons, food and cover. And some animals will use the same food plot for food that others use for cover. And what you’re trying to do is centralize the wildlife on your property and also provide something that maybe not…wasn’t there to either increase your odds at, you know, harvesting a buck or a doe, or it might be a turkey or pheasants, you know, hunting pheasants. So, and it’s also there if you’re just enjoying wildlife and want to give back a little bit. Because, as we all know, habitat in the United States has shrunk immensely for wildlife, whether it be urban development or what might be happening. But, so any time…a little goes a long way when it comes to wildlife, habitat, and food plots. And so that’s, I guess in my opinion, what they are in a nutshell. They’re nutrition, they’re cover, and they’re sanctuary for wildlife. Jason: Well, you can look at food plots also from a standpoint of, you know, if you go out into nature, into the trees, you know, wherever you’re hunting at, it may be grassland area, you know, like out in Western Nebraska, and you look at the quality of forage that’s available. You know, I’m not knocking Mother Nature, you know, nature, per se. But the forage quality out there, the amount of nutrients that’s naturally available in nature just doesn’t compare to what you can bring to them in a food plot. You know, if a person can only afford to do just a little for your deer and you had to decide whether, “Do I put out some feed or do I put out a food plot?,” and the answer there is the food plot is where you’re going to get the most bang for your buck, no pun intended. Because you’ve got a growing time from spring that they can start eating through the fall months and into the winter months even on some of the…you know, the perennials, like we have. Now, you know, is feeding, you know, mineral and feeds like that, is that beneficial? Of course. I mean, you know, as I stated, you know, a few months ago in a podcast we did with you, I mean February, March, and April, a lot of people don’t realize this, but February, March, and April are, like, huge months for fawn and antler growth. The bucks are storing the minerals on their skeleton that they’re going to use to grow the antlers in the summer months. And those months are when there’s hardly any food available over the winter months. And when you’ve got…you know, let’s say you can put out a sizable food plot, even if you can’t afford to, you know,

[audio https://archive.org/download/Episode39_201702/Episode%2039.mp3] Luis, David, and Eric reunite (possibly) one last time to do a podcast. Luis wants to talk about Trump’s inauguration speech and do a review discussion of Pokemon Sun and Moon. Starring: The Host – Luis Menchaca The Scientist – David The Radical Thinker – Eric All said I hope you guys have a … Continue reading MWM Ep. 39 – Inauguration Speech

Luis wants to discuss the Hilary and Trump race. David wants to discuss gender identity, transgenders, and the bathroom fiasco. Eric is hungry. Starring: The Host – Luis Menchaca The Scientist – David The Radical Thinker – Eric All said I hope you guys have a good laugh and hope to see you guys again … Continue reading MWM Ep. 36 – Complicated Bathrooms

asset title: Episode 10: Imperative - For best results filename: ra_10.mp3 track number: 10/22 time: 10:01 size: 8.23 MB bitrate: 112 kbps In Episode 10, For best results, we learn more about the 'noi' and 'voi' forms of the imperative mood. We also summarize the general rules for the use of pronouns with the imperative. By now, the 'noi' and 'voi' forms of the imperative should hold no mysteries: they're identical to the present indicative, and negative commands are made simply by placing a 'non' in front of the imperative form. Episode 10 comes to us from the center of Rome, where the Dottore will be showing tourists how to beat the heat of the Eternal City with Acqua Minerale Pansellegrino! Let's listen. Dialog Italian Acqua Minerale Pansellegrino Dottore: Eccoci nel centro di Roma, Città Eterna... in estate Città Eternamente Calda. Il sole spietato batte la fronte di tutti coloro che osano passeggiare a mezzogiorno... Turisti! Turisti americani, tedeschi, cinesi, persino italiani! The Tourists: Sì! Dottore: Avete visitato il Vittoriano? Avete ammirato il Foro Romano? The Tourists: Sì! Dottore: Siete andati ai Musei Vaticani? Avete messo la mano nella Bocca della Verità? The Tourists: Sì! Dottore: Avete camminato da Piazza Navona fino alla Fontana di Trevi? The Tourists: Sì! Dottore: Avete salito la scalinata in Piazza di Spagna? The Tourists: Oh, sì! Dottore: Siete stanchi? The Tourists: Sì! Colombina: Riposiamoci! Dottore: Sentite il caldo dell'estate romana? The Tourists: Sì! Colombina: Rinfreschiamoci! Dottore: Avete sete? The Tourists: Sì! Colombina: Beviamo! Dottore: Bravi! Bevete, sì! Venite, venite... Colombina: Andiamo! The Tourists: Sì! Dottore: Assaggiate l'acqua Pansellegrino! L'acqua piu deliziosa, più rinfrescante, più dolce di tutte le acque minerali del Bel Paese! Colombina: Assaggiamola! The Tourists: Sì! Dottore: Pulcinella, aiutami ad aprire le bottiglie e a versare quest'acqua frizzante! Dottore: Vedete! Sentite! Quanto è effervescente! Sorseggiatela! Colombina: Assaporiamola! The Tourists: Sì! Dottore: Senti, Pulcinella, è meglio non -- Pulcinella, mi raccomando, non fare così con la bottiglia! The Tourists: Ah! Colombina: Proteggiamoci! Dottore: Pulcinella! Colombina: Andiamo via! The Tourists: Sì! Dottore: Dobbiamo avvertire che i migliori risultati si ottengono quando non si agitano le bottiglie prima di aprirle... Colombina: Cerchiamo degli asciugamani! The Tourists: Sì! Dottore: Ricordate, amici... è il vostro amico il Dottor Balanzone che vi raccomanda Acqua Pansellgrino... gassata -- e come! English Acqua Minerale Pansellegrino Dottore: Here we are in the center of Rome, Eternal City... in the summer, Eternally Hot City. The merciless sun beats upon the foreheads of everyone who dares to stroll about at noon... Tourists! American, German, Chinese, even Italian tourists! The Tourists: Yes! Dottore: Have you visited the Vittoriano monument? Have you admired the Roman Forum? The Tourists: Yes! Dottore: Have you gone to the Vatican Museums? Have you put your hand in the Mouth of Truth? The Tourists: Yes! Dottore: Have you walked from Piazza Navona to the Trevi Fountain? The Tourists: Yes! Dottore: Have you climbed the Spanish Steps? The Tourists: Oh, yes! Dottore: Are you tired? The Tourists: Yes! Colombina: Let's rest! Dottore: Do you feel the heat of the Roman summer? The Tourists: Yes! Colombina: Let us refresh ourselves! Dottore: Are you thirsty? The Tourists: Yes! Colombina: Let's drink! Dottore: Fine! Drink, yes! Come, Come... Colombina: Let's go! The Tourists: Yes! Dottore: Try Pansellegrino water! The most delicious, most refreshing, sweetest mineral water of the Bel Paese! Colombina: Let's try it! The Tourists: Yes! Dottore: Pulcinella, help me open the bottles and pour this sparkling water! See! Hear! How effervescent it is! Sip it! Colombina: Let's savor it! The Tourists: Yes! Dottore: Listen, Pulcinella, it's better not to -- Pulcinella, I beg you, don't do that with the bottle! The Tourists: Ah! Colombina: Let's protect ourselves! Dottore: Pulcinella! Colombina: Let's get out of here! The Tourists: Yes! Dottore: We must advise that the best results are obtained when the bottles are not shaken before opening them... Colombina: Let's look for some towels! The Tourists: Yes! Dottore: Remember, friends... it's your friend Dottor Balanzone who recommends Acqua Pansellegrino to you... fizzy -- and how! Italian Una telefonata dal Colosseo Antonella: Ciao, Eric! Eric: Antonella! Ciao, come stai? Antonella: Bene, bene... Va ora in onda Radio Arlecchino? Eric: Va in onda, sì! E tu, dove ti trovi oggi? Antonella: Siamo qui all'Anfiteatro Flavio... Lo conosci? Eric: Ma chi non lo conosce, anche se solo dalle foto... Antonella: Ah-hah... e cioè...? Eric: Il Colosseo, certo... Antonella: Bravo! Sì, eccoci tutti, io, gli studenti, la guida... Eric: E hai chiacchierato con qualche Gatto-Imperatore? Antonella: Non ancora, però, proprio adesso mi sta intrattenendo un Gladiatore! Eric: Solo uno? Antonella: A dire il vero ce ne sono tanti nei paraggi... Eric: Mi auguro che gli studenti ti facciano qualche foto... Antonella: Questa è l'idea! Eric: Dopo ne sceglieremo una da mettere insieme a quelle di Nanni e Johnny... Antonella: Perfetto! Senti, ora ti saluto, adesso andiamo al Palatino... Eric: Va bene... salutami Biceps Gloriosus... e buona passeggiata... Antonella: Grazie, a presto, Eric... Eric: A presto e....? Antonella: Arisentirci! English A phone call from the Coliseum Antonella: Ciao, Eric! Eric: Antonella! Ciao, How are you? Antonella: Fine, fine... Is Radio Arlecchino on the air? Eric: Oh yes, it's on the air! And you, where are you today? Antonella: We're here at the Flavian Amphitheatre. Do you know it? Eric: Why who doesn't know it, even if only from photographs... Antonella: Ah-hah... an that is...? Eric: The Coliseum, of course... Antonella: Bravo! Yes, here we are, all of us, me, the students, the guide... Eric: And have you chatted with some Cat-Emperors? Antonella: Not yet; however, right now a gladiator is entertaining me! Eric: Just one? Antonella: To tell the truth there are quite a few of them around here... Eric: I hope the students are taking some pictures of you... Antonella: That's the idea! Eric: Later we'll pick one of them to put with Nanni and Johnny's... Antonella: Perfect! Listen, I'm saying good-bye to you, we're going to the Palatine now... Eric: All right, say hello to Biceps Gloriosus for me... and have a nice stroll... Antonella: Thanks, see you soon, Eric... Eric: See you soon and....? Antonella: Arisentirci!

asset title: Episode 9: Imperative - Build a better mousetrap filename: ra_09.mp3 track number: 9/22 time: 9:42 size: 7.96 MB bitrate: 112 kbps In Build a better mousetrap, we will focus on the tu forms of the imperative -- the most frequently used. While the tu forms of second- and third-conjugation verbs are the same as the present indicative, the forms for first-conjugation verbs are different. The imperative for these is the present indicative stem + -a, as in guarda! (look!). The second anomaly is in the negative command form, where non is placed in front of the infinitive of the verb rather than in front of the imperative verb. Let's listen as the Dottore demonstrates the new anti-mouse technology of the TopoKill 9000, a supertrap capable of catching more than a mouse!Dialog: TopoKill 9000Italian-------Dottore: Gentili ascoltatori, qui il vostro amico il Dottor Balanzone. Questa situazione vi è conosciuta? Non vi vergognate di dirmelo, lo so, lo so ... Colombina: Oh, Dottore, che orrore! che paura! che schifo!Dottore: Come dico ai miei allievi all'Università, 'Pudor non in habere sed in tenere est.'Colombina: E la soluzione, Egregio ...?Dottore: Eccola qua! La nuova TopoKill 9000! La tecnologia anti-topo presenta una supertrappola, senza pesticidi, che rispetta l'ambiente, riutilizzabile, con esca naturale!Colombina: Ma ci vuole molto tempo per--Dottore: È pronta nel giro di secondi!Colombina: Ed è di uso semp--Dottore: Di semplicissimo uso!Colombina: Ma funziona veram---Dottore: Efficientissima!Colombina: E ... non ci sono ... cioè ...Dottore: Igienica!Colombina: Ma per i bambini.--Dottore: Innocua per i bambini e gli animali domestici!Colombina: Oh, Dottore. questa nuova TopoKill 9000 mi sembra una meraviglia! Ma Lei crede che io sia in grado di utilizzarla correttamente?Dottore: Niente sarebbe più facile! Vieni, mia cara. Osserva cosa vuol dire 'semplicissimo uso'!Colombina: Oh, non lo so ... io, a dire il vero ... è che io ...Dottore: Non avere paura! Abbi coraggio! Eccola! Vedi quanto è bella! Dai, prendi.Colombina: Oh! E ora, come si fa ...?Dottore: Spingi la levetta ...Colombina: Così?Dottore: Brava! Spingila verso il basso .... Ecco! Benissimo! Colombina: Oh1 È facile ...English-------Dottore: Kind listeners, your friend Dottor Balanzone here. Is this situation familiar to you? Don't be ashamed to tell me so. I know, I know ...Colombina: Oh, Dottore, how horrible! How frightening! How disgusting!Dottore: As I tell my students at the University: 'The shame is not in the having, but in the keeping.'Colombina: And the solution, Professor?Dottore: Behold! The new TopoKill 9000! Anti-mouse technology presents a supertrap, without pesticides, that respects the environment, re-usable, with all-natural bait!Colombina: But does it take long to--Dottore: It's ready in a matter of seconds!Colombina: And is it simple to u--Dottore: Ever so easy to use!Colombina: But does it really wo---Dottore: Extremely efficient!Colombina: And, there aren't any, I mean ...Dottore: Sanitary!Colombina: But to children.--Dottore: Harmless to children and pets!Colombina: Oh, Dottore, this new TopoKill 9000 seems a marvel! But do you believe that I'm capable of using it properly?Dottore: Nothing could be easier! Come, my dear. Observe what 'Ever so easy to use' really means!Colombina: Oh, I don't know ... I, to tell the truth, it's that I ...Dottore: Do not be afraid! Have courage! Here it is! See how beautiful it is! Come on, take (it).Colombina: Oh! And now, what does one do?Dottore: Push the trigger ...Colombina: Like this?Dottore: Fine! Push it down .... There! Excellent! Colombina: Oh1 It's easy ...Dottore: And what had I told you? Now, remove the bait cover ...Colombina: Ah! Done! Dottore: Perfect! The TopoKill 9000 is now ready to be used! Place the trap in an appropriate place ...Colombina: Mice rarely cross open surfaces ...Dottore: So, set the trap with the opening turned to the wall!Colombina: Here? Like that?Dottore: Right there, fine. Just like that ...Colombina: And now?Dottore: Perform a check at regular intervals!Colombina: Gracious!Dottore: Pulcinella! Zounds!We must point out that the use of spaghetti as bait is inadvisable.Colombina: But, Dottore, what shall I do now to free this wretch's finger?Dottore: Simply press down rapidly on the little door ...And the TopoKill 9000 is already ready to be re-used!Colombina: Poor Pulcinella! Come with me. Don't cry any more ...Dottore: Dear listener: Get the TopoKill 9000 and say as the Dottore says --Mus musculus, Hail -- and Farewell!Dialog: A phone call from Antonella in ItalyItalian-------Eric: Pronto...Antonella: Ciao, Eric! Sono Antonella!Eric: Ciao, bella! Come stai?Antonella: Bene, bene... va ora in onda Radio Arlecchino?Eric: Va in onda, sì! Meno male che ci sei anche tu, ora, telefonicamente...Antonella: Grazie. Senti, fammi un favore, per favore.Eric: Come no! Dimmi.Antonella: Ho lasciato una cosa lì nello studio che volevo portare in Italia. Aiutami ora a trovarlo, poi me lo spedisci...Eric: Va bene... Dov'è?Antonella: Dunque... Guarda, vai alla mia scrivania...Eric: Ci vado... ecco, ci sono.Antonella: Sposta quel grande dizionario Zarganti...Eric: Oh, è proprio pesante! Spero che non sia questo quello che ti serve...Antonella: No no no, sotto il dizionario -- cosa c'è?Eric: Be', ci sono due foto, una di Nanni Moretti... e una di -- Johnny Depp?! firmate pure! 'ad Antonella, con amicizia...'Antonella: No no no no no, quelle non le toccare... . Lascia quel libro....Eric: Allora?Antonella: Sopra la scrivania, su quello scaffale... Prendi quella scatola...Eric: Cosa c'è dentro...?Antonella: Dai, dai, svita il cappuccio...Eric: Ahù... Antonella... ma cos'è questo?Antonella: Oh, scusa, hai preso quella sbagliata, scusa, scusa... Ci dev'essere un'altra, controlla.Eric: La vedo, ma oso aprirla?Antonella: Ma sì! Abbi coraggio, Eric!Eric: Accidenti!Antonella: Oh, Eric! Che mani di pasta frolla che hai! Quelli sono i miei fagioli saltellanti!Eric: Te li mando?Antonella: No, no, quelli non mi servono! Ma mi raccomando, non li lasciare lì per terra!Eric: Adesso pulisco...Antonella: Bene, Eric, non fare più sciocchezze. Prova a vedere nel cassetto...Eric: Va bene...Antonella: Se è lì, è proprio in fondo, in fondo... dietro tutte quelle cartelle... Stendi la mano, allunga...Eric: Ma-- Ah-- Antonella: Eric! Se c'è un topo, buttalo via! Che schifo!Eric: Ormai si sarà spaventato...Antonella: Senti, Eric, ti richiamo dopo. Mi restano pochissimi minuti sulla mia scheda...Eric: D'accordo, tanto, io devo trovare un'aspirina... Arisentirci.Antonella: A presto, mio caro...English-------A phone call from Antonella in ItalyEric: Hello ...Antonella: Ciao, Eric! It's Antonella!Eric: Ciao, bella! How are you?Antonella: Fine, fine ... is Radio Arlecchino on the air?Eric: It's on the air, yes! And it's a good thing you're here now too, telephonically ...Antonella: Thanks. Listen, do me a favor, please.Eric: Of course! Tell me.Antonella: I left something there in thet studio that I wanted to bring to Italy. Help me now to find it ... then you can send it to me.Eric: All right. Where is it?Antonella: Well then .... Look, go to my desk ...Eric: I'm going ... I'm there.Antonella: Move that big Zarganti dictionary ...Eric: Hey, that's pretty heavy! I hope that isn't what you need ...Antonella: No no no, under the dictionary. What's there?Eric: Well, there's two photographs, one of Nanni Moretti, and one of -- Johnny Depp?! Autographed even! 'to Antonella, in friendship ...'Be', ci sono due foto, una di Nanni Moretti ... e una di -- Johnny Depp?! firmate pure! 'ad Antonella, con amicizia ...'Antonella: No no no no no, don't touch those .... Let go of that book ....Eric: Now what?Antonella: Over the desk, on that shelf ... Grab that can.Eric: What's in it ...?Antonella: Go on, go on, unscrew the lid ...Eric: Yow ... Antonella ... what is this?Antonella: Oh, sorry, you grabbed the wrong one, sorry, sorry ... There must be another one, check it out.Eric: I see it, but do I dare to open it?Antonella: Of course! Be brave, Eric! (Have courage!)Eric: Yikes!Antonella: Oh, Eric! What a butterfingers you are! Those are my jumping beans!Eric: Shall I send them to you?Antonella: No, no, I don't need those. But please, don't leave them there on the ground!Eric: I'll clean up now ...Antonella: Good, Eric, no more foolishness (Don't do any more foolish things). Try looking in the drawer ...Eric: All right ...Antonella: If it's there, it's way in the back, behind all those folders .... Reach out your hand ... Stretch ...Eric: Ma-- Ah--Antonella: Eric! If there's a mouse, throw it out! Gross!Eric: By now he'll be frightened ...Antonella: Listen, Eric, I'll call you back later. I have very few minutes left on my card ...Eric: Fine, I've got to find an aspirin anyway .... Talk to you later.Antonella: Soon, my dear ...