The Reindustrialization Of America | Jakob Diepenbrock

Transcript

YouTube automatic captions, grouped into readable passages. Names and wording may contain transcription errors; the recording is the source of truth.

00:00 Welcome back to another episode of the pause experience brought to you by Zcash, Poly Market, Citizen X, and Passage Press. Beautiful friends, we have an amazing guest today. But before we have this guest and he pills you, we want to hear in the comments, what do you think about hard tech? What do you think about defense tech? Okay, what do you think about the United States government? How cool do you think drones that use coordinated laser beams to vaporize enemies of the US state are? Do you think they're good? Do you think they're bad? >> Leave your comments below. No. So, we uh >> What do you think? Hold on. Hold on. [snorts] What do you think? >> And I know our viewers are going to have opinions on this one. Okay. What do you

00:46 think about the US government's military spending? Okay. What are your opinions on this? Is this effective? What do you think about government spending? >> What do you think about government spending on the military? >> What would you hypothetically think about the government taking your taxpayer dollars and giving them to a 22year-old who never graduated college in a grant? What do you think about that? [laughter] >> Anyways, we will now get into the episode with Jacob, 22year-old fund manager. [laughter] We actually we actually have to mention something else too is uh for a long time we've had bonus episodes on Substack. However, Substack has been banning

01:31 people from buying it unless you did so on the iPhone app where they charge you a $3 premium. And all of our viewers of course are very very financially efficient. So they see this and they're like, I won't be giving Apple my $3 for exactly the same deal that I could get from Substack for just $8. Uh, so we finally got that fixed. So now people can actually go subscribe and see the bonus episodes. >> Dude, I had so many people. Do you know how hard it is to get someone to DM you? Yo, your payment processor is not working [laughter] >> because it's deeply embarrassing, right? Nobody wants to come and say, "I was trying to give you money for your podcast, but it won't work and I'm so [laughter] desperate to do so that I need you to fix the technical error."

02:16 Right. It is it is deeply bullish that people were were DMing me this. We fixed it. The payment processor is working. If it's not working, let me know. We'll figure it out for you. We have a lot of bonus content there. We have some Lucas and SA. We have some episodes with some friends of the podcast, some crazy anons, some face posters in San Francisco. Some of the juicier stuff. Okay, we're doing pretty we're getting discussing here. Lucas just drinking five glasses of vodka and then podcasting with SA for three hours. [laughter] >> Yes, >> that one wasn't bad. >> We have Salem and Lucas hammered. Okay, we have bonus content. We're going to start having SA only or Lucas only episodes. So, if you hate one of us or you hate the other of us, okay, if you

03:01 can't stand me, there's episodes with only Lucas and other people that are going to be on there very soon. If you hate Lucas, okay, there's gonna be episodes with only me there very soon. >> I don't know if that's true, man. I If I'm gonna be real, you're not recording [ __ ] without me. Like, you don't You're so [ __ ] lazy, bro. There's a 0% chance you will ever roll that. >> Cut that. Cut that. Get that out of here. Turn off the lights. Okay. Donald Trump reference. Rio Baldnower reference there. Turn off the lights. Turn [laughter] off the lights. Okay. [snorts] But yes, we're gonna have some great content. All right, subscribe to the free version if you're a pleb. Okay, get the premium version if you're a real a real baller, a real extended cut. Every

03:47 time we get comments all the time from people, they're like, "Dude, these I love these episodes, but these cuts, man. You've got to you've got to level it out. You got to stop with the cuts so much, man. There is a place where you can find episodes with without so many cuts, you know? >> It's the bonus episode section. How much? What is our price point? >> Whatever price it is, it's a great price. >> I guarantee you I guarantee you that when I set this up, I was like, that's the default click. That seems good. >> Whatever price it is, it's a very cheap, very reasonable. >> It's a very good price, sir. It's a good price. >> It's a great price for the content you're getting. It's a great way to signal to the industry that you want more epicbased podcasts. Okay. We love

04:33 our viewers. We would only sell things to you at very fair price points. >> Yes. Plausibly deniable.substack.com/subscribe >> at your local church. Print out a screenshot of our Spotify page, our YouTube page. >> We should have a QR code. I'm adding this to the website right after this. I'm going to make a printable QR flyer that people want to do like graffiti with and they can go hang it on their local. >> You know what we should do? Hold on. We have a referral code. We should have a referral code and then a leaderboard for whose referral code has gotten the most uh listens off of. Can we do that? >> Making a podcast referral program is so dirty. This is amazing. >> But you can't you don't get anything, but all you get is bragging. >> No, dude. If you do it, we will we will

05:18 definitely say your username at least once on the podcast. >> No, we will do disgusting disgusting things. We'll whisper sweet little nothings with your username, okay? We will we will do crazy [ __ ] Okay. [laughter] For our >> to be fair also, I bet this is like if somebody gets that many referrals, it's probably worth it to call them and say like, "What did you do? There's a good story here." There's definitely a good story here, bro. >> It's [laughter] called repeatable growth. Okay, bro. Have you heard of this? [laughter] >> Everything is content. Everything. Film everything. Film everything. [laughter] >> Oh yeah. Yeah. Okay, man. Yeah, we're going to we're going to it's things are going to get pretty disgusting here, okay? In call to action land,

06:04 dude. We're going to turn our entire podcast into a call to action. That dude, oh my god, new title, call to action. It's so good. Ah, we just have to we have to rebrand again. We had one one episode of being confirmation bias and now we're called to action. CTA also is really fun to say. >> CTA is really fun to say. That's true actually. >> Call to action as dude. Okay. Instead, we have to start collecting all these. We can have a section called We can have a section called confirmation bias where we discuss the various ways in which we've confirmation biased ourselves or maybe you have. And then we can have a section >> in the future. We'll have we'll have some kind of sub. We'll figure out how to turn this into an MLM at some point

06:50 >> sooner. We literally just have a section called call to action where we try to come up with an original call to action that we've never done before and it will get increasingly hard, right? Like episode one, this is fine. We haven't done any of these before, but at some point we're going to be like a hundred in. It's going to be really hard to come up with anything original. We have a very special guest. We have Jacob. Jacob, we met under very funny circumstances in Vegas recently at the Enhanced Games, the pinnacle of human engineering. you they'd asked you, they'd begged you to compete, but you you said it was too much. They weren't ready for you. Uh so you were sitting that one out just at the pool getting some sunshine. U we met through an esteemed mutual friend, Kyle Cash, very handsome. He's on a psychopathic journey of long-distance running. Uh that's when

07:37 you know someone's that's when you know like they're having a real come to God moment. >> Well, that's when that's when you know that they are going through it, right? like somebody is serious because I consider longist running to be basically the adult version of self, right? Like if a 13-year-old says that they're themselves or a 30-year-old says that they've started long distance running, it's equivalent. >> It's kind of the same thing. It's very similar psychologically for sure. Uh we support Kyle through through his long distance running journey. It's going great. He's getting shredded though, so you know, there's upsides to it. There's upsides. Um >> running shredded is worse though. I feel like like running shredded is like you're you're like in shape like you kind of just like automatically you're in shape if you're running versus like shredded when you're like working out is a bit different but he he looks he looks

08:22 good. Paul real bad. >> Yeah, this is this is double also because >> we invent GLPS, right? >> And so if you want to get shredded, you can just inject the magical meme chemicals. And when somebody is like, "No, no, no. I isue the easy way. In fact, I'm not even going to do the medium way where I just diet. I'm going to do the ultra max difficulty level where I don't diet at all and I just do long distance running until I lose weight." You're like, that's like, you can only be doing this if you hate yourself. [laughter] There's no other explanation. >> Yeah. Everybody either just like loves running or hates running. It's like really nobody's like, "Yeah, I'm just going to like run today." I feel like it's kind of like >> I get really bored running. >> Yeah. It's very boring. >> I don't dislike it that much. It's just

09:07 very boring to me. Um it's not, you know, it's not it's not enjoyable. I can't turn my brain off the way I can if I like hit the gym. Uh, I think hitting the gym is the more, you know, Jacob here is a big proponent, big character in the the Gundo scene. We'll we'll let you uh talk us a little bit through that and what you guys have done there. And and I think there's like a a great crowd of people down there that are all very fun. >> Yeah. >> Uh good people that want to build interesting companies that, you know, don't just maybe want to make money, but want to do something cool, >> something that's worth doing, which is a little different. It was very funny. Did you see that clip where Chimoth was on the All-In podcast being God, everyone in everyone in SF is just in it for the money now? [laughter] And it's like, dude, come on.

09:52 >> How did you make your money again, Mr. Chim? [laughter] >> Well, he's he specifically has a bunch of video clips being like, >> go for the money cuz if you and like actually a pretty well-reasoned argument of why you should always take the money because what he says is like you should always take the money because if you don't, someone else will. and then once you have the money, you can actually do the things that you want to do. >> So, it's actually kind of a a pretty well-reasoned argument, but yeah, it's very funny when the Mr. Spag himself, the king, the king of spaxs, is out here decrying a money focused. He's having maybe Chimath is going to get into long distance running. We can give him Kyle's number. You know, he's having a come come to God moment. >> [laughter] >> Do you think Loro Do you think Loro sells sells spandex for for [laughter]

10:37 >> Have you seen his like 8090 thing where it's like basically like a re-industrialize I think it's like a public fund maybe it is or maybe a venture fund like he's kind of like trying to like jump to like remove the spa stuff. He's saying this like so gets out before everything else. I thought 8090 was an AI native consulting shop kind of. >> Um, >> he started some like American Dynamism thing. Maybe it was an 890. Um, >> I I mean a lot of people are trying to get on the defense tech wave now that now that it's been successful now that you've done so much. Which is a beautiful segue. Okay. When Kyle introduced us, he was like, "Jacob is one of the geniuses behind defense tech. Maybe maybe overhyping you, maybe not. Only time will tell. tell us a little

11:23 bit about yourself and how you got started and and what you do today at the >> Totally. I found it's called American Exceptionalism Acquisition Corp. That's his thing. >> Um he raised 250 million or this back. >> Um yeah, basically to skip >> very modest only 23 million he raised or 230 >> 250 250 >> 250 very modest very modest for him. Come on, Chamal step it up. Yeah, I do think um yeah, so basically we're in LC Gunda. We're the only fund here. Um I can give you like the story if that's helpful and kind of like why it all makes sense and why I did it. But basically met um Augustus from Rain Maker and then Isaiah this is his company Balor a couple years ago and

12:08 they were first coming out here and they basic basically their thesis was like one hardware makes sense to build here because of supply chain and talent. Um LA has the highest density machine shops and techitions anywhere in the country. Um and then talent wise like SpaceX and all the other hardware companies that are now here. Um are getting massive and people leave but then start stuff and you want to hire them also. So like supply chain is important and then talent's important. Um then also um the unique thing about here is like you can kind of hardware is is the mainstream thing. Like there's really no reason to build like any software company here unless you're selling to like an aerospace company, right? Um, so like it kind of is the mainstream which I think is a cool thing to be able to create versus just kind of being sad for New York whatever being like oh like we're being kind of building hardware you're

12:53 never going to be like the thing right um so that was kind of the two reasons and also you can you [snorts] can obviously shape a culture if you are like the guy who's driving it forward versus like you can't really do that as much San Francisco or New York so kind of the two original things just like it's gonna be our we focus on building hardware that matters for the country um we can just like make it our thing basically the government uh the local government the kind of city council mayor very supportive like Elsa is a great part of of LA like I mean they have like I said they're a mayor they're on city council so they're much more helpful and like align on this kind of stuff which which is great um and it's smaller towns like you can also kind of be able to influence them with that stuff which is much harder to do in a massive city like I saw or New York >> so yeah it's kind of like the why but then basically came here and kind of to

13:39 their point like there's just so much amazing talent it's leaving and starting And I was basically like if we can just come here and be here on the ground early that's valuable like um I think geography if it actually is a real thing is very helpful for for venture like I think there's examples of it not working like I think like no offense to Miami but I think like I was like a definitely a a push for a long time like okay we'll be here with the Miami fund we'll like get in early didn't really end up turning out that way I I think the reason SF works is because all the AI talent is there now right and like that's what you want to basically get on Same with hardware, like it's all here. So, I basically like if we could just like find these young engineers and nobody else was here, which is I think I thought was unique at the time, I could just give them money early and then get them help them move quicker and get going. And that played out pretty well.

14:25 Um, and yeah, so we focus on hard tech for critical industries, raised about 45 million total now. Um, and yeah, I I run the fund. I have I have an investor and I have a CFO. That's kind of the small small team. Um, but it's kind of the general overview on us. How do you get started? Run us through like >> you know you you told us >> kind of what where you're coming from. It how did it get started? Because I think the story as I remember it was pretty interesting. >> Yeah. Um so I I started this like company wasn't anything super impressive and I was in high school. Um met the guy who ran Steve Balmer's family office. I'm from like Seattle area. Um and then that was kind of I ended up working for him basically. I was like 19. worked at Steve's family office in Seattle and did

15:10 like some the venture stuff there. So that was kind of like the first venture exposure and then I did some of the fun and fun stuff as well and just saw a bunch of the stuff they were looking at and I basically was like yeah all these funds are like pretty like undifferiated to your point um and [snorts] no one really is creative like the kind of issue with most investors is like it's kind of like a very like structured process. those people are like you go to Stanford or whatever you get to Harvard then you go and like work in investment bank work at like a like a mega fund as like an associate and then like maybe you work up to like a partner like you with GP and you leave you want to get more upside you start your own fund no one's really creative in venture to be honest with very few people at least like that's kind of the first thing I saw was like just everybody was very um credential um and weren't really thinking about it in like entrepreneurial way um that was kind of why I was like okay how do I do

15:56 something different I metus originally um through some like mutual friends. We were together um down at in El Salvador. Um and then we ended up going I ended up like basically like hey we should I want to come check out Alagundo. He kind of sold me on the hardware part. And then Isaiah as well. Um this is my in when I was in college in my freshman year of college. And then basically it's like okay I'm going to just come put some checks into people or at least like help them um originally I helped them raise money basically and then after that warehouse some deals I had and then I raised the fund one off of that which is like a small $10 million fund and then that was like a quick deployment period about um like yeah year and a half to year or so deployment period then just raised the next the second fund earlier this year. Um that's kind of like the general overview but yeah came here

16:41 >> I think the way you did it is great like the way you did it is great right it's like you start angling you warehouse some deals you scrap your way to a smaller first fund you know a lot of these companies start doing really well and I think also on the other side >> probably a lot of the fact this is obviously very convenient for you but I think I think I do think it's actually true probably a lot of the founders of these companies don't view you as like another VC right both because of your age and also because you went all in super early and it's not like oh you know this is a guy who's doing, you know, you were doing like Anderil at General Catalyst for, you know, 3 years under some GP and then you were like, "Oh, this makes sense and I'll go run with it." Um, I I think there is more of a sense of like you went a lot more allin and like you say, Yeah, it's it's

17:27 very strange. I think a lot of people are trying to productize VC right now. And I think whenever you try to productize something, I mean, I'm sure you've seen these fund uh these fund things floating around with the uh [laughter] the the return on on funds invested and and a lot of these funds do very poorly, right? I think it's something like half of them don't even return the fund. >> Um I think it's only like 25% do more than a 2x over 10 years, right? Which is worse than your S&P 500. Then there's the question of like are these actually uncorrelated returns? I think for a lot of firms it's probably not actually uncorrelated returns. It's just really crappy beta. >> Um not pressuring you. Do you feel like you want to you want to share any numbers there? >> Um I mean I think yeah I can like say

18:12 roughly. Um >> you're really putting him on the spot here man. You're asking [laughter] him you're asking for the numbers. I >> I'm sure I'm sure Jacob is a strong enough alpha male that he can say I'm not sharing the numbers. We can also cut this which I've been very clear to him. >> No, I I'm the numbers are very good. Like I'm totally I want to get like exact numbers so I can not >> I know the numbers are very good and so I'm I'm setting him up a little. Yeah. >> You know, you can tell already that they're good because he said I want to get the exact numbers which means like I need to look at the most recent ones cuz they're higher. [laughter] >> Yeah, cuz in the last like month someone >> Yeah. Let me We We had We did We did just have a big round recently. Okay. 4.1x TVPI, 25 vintage. So like that's a

18:59 year and a half basically. >> Yeah. That's amazing. That's amazing. Yeah. That's very very very good. That's like top 1%. Yeah. >> Yeah. Like I mean I think you probably saw the numbers that came out like a week or two ago and like the TVPI like I think it didn't even go up to 25. I think it went like 24 and like PVPI was like basically one which is just like nothing or white water or something like that. >> So um yeah, >> it's good. It's always good to see a friend of the a friend of the pod winning. Okay, so you went have you ever talked about how how you did the first raise because that's like hard. I mean you're very young. You were going into a category that at the time now it's super sexy right now. Everyone's trying to get into defense tech. Everyone's trying to get into it. like this is one of the faster turnarounds I think in terms of a

19:44 space becoming more sexy. I think even even a year ago it was significantly less sexy. >> Yeah. Yeah. I mean basically I can like start about start with kind of what I saw originally how that's changed and also growing up the fundraises. I think how that went and how that's changed but originally it was basically hardware generally wasn't as hot like I think defense was hot at the time and I did a lot of defense stuff around originally actually like the first fund raise is basically around like defense and and aerospace because that was kind of like the thing at the time. Um so that was kind of fun one. Yeah, the raise basically what I found was with fund fundraising you kind of have to run it like a like a startup fund raise in reality. Most people who run fund fundraisers like basically say okay we'll do it in a year. It's like the average the average a year and a half I

20:29 think. Say we'll do it in a year and a half maybe. Um we'll just like start talking to people like see how it goes. Like nobody really tries to apply the same like pressure like momentum tactic to like fund fundraising. So I try to basically do that. I was how can I kind of shape the the story and and like the time frame where I basically make people like want to move versus just like wait till the last close which is how most these fundraisers go. So figured that out towards the tail end of fund one um which is like fund two went really quickly but basically yeah fund one time frame went out end of 24. Um I think the initial things that work were like bring on GPS as as like LPs then get them to basically help with the story get them help help um bring in their LPs and that worked really well and also like gave me markups. Then from

21:14 there I was okay I should just like get built some momentum through getting publicity. So I got like a form piece written about what we were doing that helped just like I think helped the brand a lot. Um like Antonio Graces calling me calling you know me after that and like he putting his name on stuff helped. So yeah I think a key is the main kind of takeaways I would say would be like use big people's names to help obviously if you're just getting started that's helpful. Um then also just like get GPS more early. Then after the the media stuff, I looked at um we did our first cohort without even closing like the full fund. So I don't know, I raised a couple like probably two million at that point. Did that got some good markups off that. Got some good like publicity off that as well and that also helped. Then once that kind of came together and we got some like real

21:59 names marking up our deals, um it went pretty quickly after that. But that's yeah main things that worked getting GPS um getting publicity and like just writing checks as you can and like if it works it works um for our model it's like much easier to make it work than others I mean maybe take up your install but kind of three things then two um I had numbers looked good so I should just go out to raise another fund um and I did if >> well you're kind of you're kind of in the territory of uh I guess the payoff space as they say right like you have proven it out already but what you did I think for the first fund is uh like it's kind of hard. I think the average person listening to this podcast actually will probably be like that. How is that?

22:45 Wait, what? Like you as a 22year-old decided that you were going to start a venture fund for defense tech and you just got people to give you millions of dollars to invest like that will that will actually be something that is incomprehensible to them. [laughter] >> Yeah. Yeah. I don't know, dude. Like I kind of just like didn't think about that. >> Did it. Um >> most people don't think about that because it doesn't make any sense really. Yeah. Like when I was 22 I remember what I was thinking about and it wasn't this. I didn't even think I just assumed okay well in order to get people to give you millions of dollars you must surely have and then like insert list of things that you don't actually need to have. But everyone just assumes that you need to have right. >> Yeah. I think the core I think yeah it's

23:30 a fair point. I mean I think I think generally this is not like a new tape. I think generally like you can do all this stuff if you just try. Like people try to put too many steps between things or it's like if you want to do the thing just do the thing and figure out the way to get to that quickest versus again like most investors approach their career as like a as any other like financial career and that means just not creative like you're much more like how do you limit risk versus how do we like maximize upside and I think >> yeah that's kind of why all these funds are all the same right like they all again have that kind of typical background of like went to this school studied this whatever studied finance or some engineering went to some bank or went to some mega fund and then just like wanted more upside left and just kind of took what worked versus trying to be creative about how they want to do it. Um, and I think that is like all the best GPS approach like venture as like a

24:17 startup, right? And like how do you get to the thing you want? Um, like I mean Andre and Horovitz was like unique when they started their firm because like how do we raise a ton of money and just like build like a platform around that? Um, and like that was what worked for them. And I think too many people don't think about it like how do we create a product and get to that outcome versus just like credential ourselves to like get the the job we want. >> So what do you think was the thing that actually made defense tech get so much more interesting to everyone? Because I I remember what Sailor was saying too maybe a year a year and a half ago uh suddenly everybody was really into it. And like I I'm an engineer. I went to school for engineering. I worked as an engineer for like five years. I've always been like, "Yeah, it's kind of cool to make drones that laser people, right?" But I think that's just that's just a viewpoint I have because I'm an engineer. But, uh, suddenly everybody

25:04 else realized that drone swarms that evaporate people with lasers also are cool. And I was kind of confused because it was one of those things where I was like, "Well, this is just obviously true. I don't what do you mean?" Uh, but even normal people got it. And was there some sort of a big event or something that kickstarted it for you? I remember Anderil. Uh I feel like I saw Lucky around a lot more, but I don't know if that was just because of Twitter. >> Yeah. Um yeah, Andreal started I think it was 2016, so it's been a while since they started. I think they just started like gaining a lot of momentum in the last year or two and then also um there's been a lot of companies that have been started in the last year or two that have also got really really large. Um, I will say before I like to explain why I'm much less interested in defense. Like I we have our next kind of

25:49 batch coming out. I've written most of the checks and we have zero like pure defense bets. >> Um, which we're happy to like get into in a second. But yeah, I mean I think it was just like Andrew kind of broke out to the point where everybody wanted access and then that like that when you're like family office in Dallas like they want access to and roll because their friend in the golf course told me they wanted it. like that ends up impacting like the the funds they're invested in, the fund of funds they're invested in and the managers they invest in that a lot of funds will be excited about that because people are asking for exposure and I think when that starts happening that's like a bad sign generally for a market um on in the venture side. So I think it really did just come from the fact that like Andrew broke out and people wanted more exposure to it and that just leads to more capital being pushed in that direction. Um I I think there are like

26:35 definitely structural things that make sense. So like the there's a lot of these like government programs that are put together to like try to um basically build more like defense hardware in America like drone dominance program DIU which was started a bit longer a bit ago but ended up taking off more recently. OC which is like kind of a way to basically bring in and you use innovation use it basically how do you get capital to people before they get in like a part of a record and kind of just encourage earlier stage people to interact with D. Um and then yeah, OCU is like another more recent thing as well where this like they just raised a ton of money to go and give funds money. Um focus on critical areas. I know there's a lot of government stuff as well. Um and obviously like tensions

27:21 also p push that. Um, so those are the main the [snorts] main things I would say that and the main thing really. >> So here a rumor that I'd heard uh I don't know if you think this is true or real or if you have any insider knowledge on this one, but I'd heard that Elon during the Doge Sega was pretty disgusted with the margins that a lot of the uh that a lot of the defense tech companies had. >> Yeah. >> He was just like, "What? Like what the [ __ ] do you mean it costs $20 million to make a missile?" >> Yeah. Uh and so he started installing a bunch of people in a lot of programs and pushing for uh pushing for government contracts from companies that had much more economical deals >> with the US government. And then that kind of kicked off the whole thing where

28:06 it went from the whole defense industry went from you have to have a guy on the inside, right? Like you have to be sig with your guy who talks directly to the US government and will line you up with seven contracts right out of the gate and you can't like you can't be another outsider that comes in and gets a firearms contract with the US government because SIG already has their ear and you're just going to lose everything. And then Elon came in and said, "No, [ __ ] this. These economics are horrible. We don't want to deal with these big incumbent companies. I don't want to pay that premium. That's insane to put this on the taxpayer. I would much prefer some guy who has figured out how to uh like juryrig together a missile out of some pipe from the hardware store in black powder and like rigged a [ __ ]

28:51 Raspberry Pi onto this thing so it can do close enough targeting. And then everyone was like, "Oh, well I can do that. Like I can attach a Raspberry Pi to a pipe." And then they all started their own companies. [snorts] >> Yeah. Yeah. Yeah, I mean the reason I think ended up that way is basically like I mean you probably have heard like the the cost plus mall which is how defense contracting is traditionally done where it's basically like this went back to World War II like nobody would build for the the D because they just wasn't predictable revenue. So they basically said hey like if you just build this thing we'll give you like 10% margin on that. Um and that's kind of been the way it's been for like a century now. And then obviously like that incentivizes like just spending more money because you get more money, right? Yes. Um, and then like people they hire people so they can like that's

29:37 another line. They get make some more money or they spend more time trying to do the R&D and stuff just like gets dragged out. The issue obviously there is like that means their costs are insane. But then if you're like a startup like you can do it much cheaper, but then your margins like you said are insane because like you're kind of just your reference point is like this insane price they're they're charging for what they're doing or money they're making off of that. Um, which I understand that. Um, it's hard to kind of prevent that obviously unless people like are actually looking at like their their balance sheet and figuring out what they're spending on on different things. >> Well, something something that was always interesting to me cuz as a kid you hear about these massive military contracts and you're like, "Oh, wow." Like that must just be this enormous sum of money that's totally outside the reach of anything that I could ever do. Right. But then you grow up and like if

30:22 you look at the uh if you look at the revenue of all firearm manufacturers in the world >> Yeah. >> It's like nothing, man. like the biggest I want to say it's uh it's one of the old boys. It's like Winchester or Smith and Wesson or something like that. Uh I think they barely make a billion dollars a year or maybe even they make less than a billion dollars a year. And that was the point where I realized like huh uh this is a much more approachable thing than I had previously understood, >> especially with a lot of the drone stuff too, right? Like you can now go and actually just in your basement put together a decent drone fleet if you get a bunch of Chinese motors and batteries. >> Yeah. Yeah. I I the I I agree in like the hardware part on the hardware part.

31:07 I think the hard part is really just like getting like obviously the contracts. Um yeah, like the at the end of the day it's like >> to to get on like a part of a record which is like the kind of repeatable like revenue basically the D will give out um or the contracts you can get. You have to basically like lobby to get your line item there. Like it's not just like we need drones, we have $2 billion for drones. If you like bring it to us, we'll buy it. It's like that only existed because somebody lobbyed for this particular size particular like Yeah. If you read these these line items a bit, it's like the most insane like specific thing of like >> Yeah. Yeah. No, it's like this. It's like this for every government contract too, right? It's it's like this for software. there will be some some software required for interstate wire commerce and it will be like oh you must have a backend that uses like this type

31:53 of database and it pipes it over and it's like why does that matter like that that actually has no impact on the quality of the data being transmitted and it's because there's someone who's like we're I'm going to use this really obscure like I'm going to use Ruby on Rails for this thing that nobody's ever used it for and then they won't ever transfer it because it would break everything and then I'm going to get this guy to legislate that you must use exclusively Ruby for this. >> Yeah. Everyone I've talked to that's been dealing with the government in any capacity is sort of like uh there used to be this truce where if you dealt with the government and then the admin changed and it was an admin and the previous admin you you liked politically and this one doesn't like you politically. It was like they're not going to pursue you. There's not going to be any sort of retribution enacted upon you. But now it's this weird thing

32:39 where if you work with an admin across the aisle, then the next admin might just try to ruin your life forever. I expect like when the Republicans lose office, I don't think it's going to be super good for crypto. >> I think whoever they put in is going to vindictively go after every single person that worked with uh Trump and any of his family in any capacity to bring crypto to the people or whatever they did. Uh yeah, and like Anthropic was another interesting example of this too because it used to be that if you worked with the government, they just wouldn't talk about it because there's plenty of companies that uh do work with the government and you you wouldn't want uh they wouldn't want their customers to know that, right? Because, you know, the US government is a politically polarized

33:25 entity. So the US government will now sometimes just [ __ ] up and say, "Oh yeah, we're really buddy buddy with these people. We do a lot of business with them." And then if you're a company like Anthropic, the last [ __ ] thing you want anyone to hear is that we're buddy buddy with Anthropic as the US government, right? All of their clients hate that. >> Yeah. Yeah. Yeah. Um I mean that was kind of one of the like the main reasons why Elon got involved as well was like if if Biden um I mean he would basically be ensued by Biden and like it if Trump had would have lost like he would have basically like been destroyed by like >> right. It's like you you actually have to make this bet all out or else it's over for you forever. >> I think there were a lot more people than people realize that kind of made this bet and there is so much insanity.

34:11 You know, I don't think it's like it's impossible to have someone from either side who who isn't workable. But I really think I mean there's so many people who just went all out that historically have never placed political bets, right? Like defense contractors historically are not really people who try to place crazy political bets on one side or the other side of the aisle. They have their guys, but they don't like throw shovel in all their bets on one side or the other. The hedge fund industry, right, you had a ton of people who who went super allin. Um yeah, I I think a huge thing that changed is the Republican bench is probably, you know, has a little less people and so you have younger staffers and younger people in procurement who are maybe a little frustrated about how some of the defense contractors acted and so they're willing to give people a shot. And then also like you said, right, Doge, all these efforts for like, hey, how much are you

34:56 paying? How much does cost plus maybe we do need some change here. Um, you do have, I think, some more cynical people who have looked at things and said, "Oh, defense is great because during a recession, the US government, you know, keeps paying for defense." And so, I think there's some people who are a little more cynical there. What I think is awesome is the hard tech stuff. I think the hard tech stuff is going to be super interesting, >> particularly because in my opinion, it's like we had a crypto bubble into an AI bubble. I think the next thing is going to be robotics. And so I think a lot of the hard tech stuff particularly for supply chains where you want only Americanmade especially you know motors you have like very small things that that are are not super differentiated but if you can make them in America without having you know Chinese capital and you don't have this massive

35:41 corporate structure um you can have a huge huge huge angle there. Um yeah, >> tell tell us a little bit about the the thesis swab and you know why you think hard tech is more interesting now and maybe one or two companies tasteful tasteful shill one or two port codes where where podcast listeners should consider applying or shilling or something. >> Yeah. Yeah. Totally. And I guess one thing I want to push on is like I totally agree in the part about the the like the re reshoring and and like building things um here like there's been obviously like a big government push there and I think it will like continue to go. This is something I've heard from many people who are the government like we will continue to push like it started with for drones had to be all Americanmade. Robotics is basically the same thing. I did this thing a couple weeks ago basically

36:26 saying like 65% of domestic um or sorry 65% of a robotic um any robot sold in the America has to be 65% domestic components by value and like that basically um is a bassin thing like >> how do they break that down 65% by is it by part number >> by value >> or by okay >> yeah yeah which is like I just invested in a company yesterday actually because in by like basically in part this this kind of change doing like gear boxes for for robotics. um >> the gearbox stuff all there's all this like relatively you know it's not you're not building lithography machines let's put it that way right you know there is a lot of expertise that goes into it but you're not like the oneofone company that can do it but if you could do this on American soil with American engineers

37:12 etc I think there's a huge premium right now that that's probably mispriced or certainly was mispriced let's say like 6 months ago 3 months ago again it's it's moving like crazy as evidence from Jacob being like hold on let me let me look at my CFO's latest email because my numbers just changed. But uh but yeah. >> Well, I think there's still like a lot of like stuff people don't think about, right? Like the the like the motors and actuators thing is like I think totally blown up. I saw West Mag. They raised a massive round recently. >> There's one called Alice. There's a bunch of companies trying to do like the obvious stuff. But if you like dig deep, there's just so much that goes into whether it's like bearings, whether it's like obviously the gear boxes or many other things where it's just not as top of mind and people will pay like for these more complex parts, people will pay you to do it for them obviously. Um, and I think like a big thing that a lot

37:58 of these businesses are built out is like this like idea of like time value of money. It's like if you can even if it's cheaper to get from China like the amount of time it takes and like the quality issues that come up a lot of the time um like people will pay 2x 3x even 4x sometimes for >> it's also just for anything that's dual use right there's a huge premium if if you can source locally I think we've we've talked a lot about how uh we we joked on on one of the earlier episodes that like China is kind of mogging on industrials and I I think a lot of people in Gundo are like worried rightfully and have respect for for Chinese manufacturing that like a healthy dose of respect for it. Um, we we talked a lot about one company DJI. I'm curious, do you think there's anyone going after like the DJI space because I think that's going to be huge, right? That one where they're super strong dual

38:44 use. Yeah. Americanmade drones, especially >> we're starting we're starting DJI imports too on a ton of their products. So, it's just free. But, I mean, they are just such a freaking powerhouse of a company. Like everything they do is so >> it all works really well. Like that's that's like they have the software down. It's amazing. The hardware obviously interact very well with it. Like that it's yeah it they've done it really well. Um I mean obviously like that you can't use DJI drones if you're in like in the police or in the fire like you're a fire person whatever always military. >> Um there's like Nero's doing like defense focused. The main issue really is just like where the demand is. Like the reason why has done well and I mean many other defense trends in well is just like there's like very clear demand

39:29 for for drones on the defense side of things. There's not a ton of like clear examples like zipline doing stuff with like delivery but like people try to stuff in the farming space. >> Consumer drones is not I mean drones most people buy DJI. Exactly. Right. Or or someone will like white label DJI parts and bring them in and reassemble them and get around. I I also think a lot of the import restrictions on some of this stuff is is kind of weak and you can like oh you know I'll import the pieces import Mexico and then >> No, you don't even have to do that. That's way that's way too complicated man. US government incompetence truly cannot be overstated on this one. >> Uh you don't have to do some sort of oh I'm gonna ship it to the other country so that the the government will lose.

40:15 Dude, they don't check the boxes man. They just don't check the boxes. Like you can go on and I know this there's a and you were saying there's no there's no market for consumer drones. What there is a market for though is consumer creator cameras. DJI is turbo mogging with all of the YouTube marketers. >> The key streamer industry is totally captured. Okay. >> Bluetooth microphones. You got the weird little cameras. You got they dude they do GoPros better than GoPro at this point. It's shocking. They last like six hours on battery. They have >> um the the drone stuff is super interesting because for for the few consumer cases that they are there's really interesting software there with dual use as well, right? So like

41:00 tracking, following, autonomous maneuvering, autonomous swarm stuff. >> Obviously we all saw videos of drones doing like the flocks and people go ah how do you even defend against this against this? I think there's laser stuff that can defend against it better than than people realize. But the reality is it's so cheap compared to if you look at what it costs to put a soldier, you know, in the Middle East or what it costs to put the soldier somewhere, you know, you're looking at like 250,000 plus transport plus food. >> Um plus the the soldier. Um >> and so it's just like, you know, even even if this if 250 of these don't work, it it's like the net cost of one of these drones is less than a thousand bucks, >> right? Um, what are you the most excited about there? Maybe >> in defense or what do you mean? No,

41:47 >> either. I mean across across across whatever you're looking at like what is right now? >> Some of the companies chilling. [laughter] >> Um, yes. There I think there's a couple that I was going to chat through. Um, there's one that did really well that I don't know if you saw like the re-industrialized sweaters that came out a while ago, but Dave, those were big. It was so funny how there was that one girl who did did the sweaters and they were made in China, dude. >> Yeah. Yeah, that was funny. >> They were also like 200 bucks. It's like if it's made in China [laughter] like 20 bucks, made in China. That was pretty funny. >> Reindustrialized made in China and and it cost 200 bucks. And I think they didn't even ship them on time either. It's just like nothing. >> I got a DM total drop.

42:32 >> Total total trifecta moment. It's like pick two of three and you're like I will pick zero of three. [laughter] >> Yeah, literally. >> And the guy wasn't even American. He was like like Bulgarian or some some like super random like [laughter] >> European country. >> You can't It's like it's it's it's one of those triangles. It's like pick 203 and it's like actually I picked zero4. [laughter] >> Yeah. >> I'm also not delivering an actual sweater to you either. >> Yeah. The funny thing he he'd actually raise venture money from some like fund. I like dude what like who's who's investing this? Like this is obviously a horrible PR idea. >> Dude, I it used to be like somebody would say we raised from X and you would be like oh wow nice. Now it's like we raised and it's like dude at this point I'm half

43:19 expecting my 78-year-old neighbor to tell me that she's raised for some sort of local cooking [laughter] business. like, >> "Yeah, there's lots of money out there." Um, >> a lot of it's just banks don't do banks don't really do early stage business lending anymore. Um, banks used to do this. They just don't do it anymore. >> Yeah. And they do like a ton of like venture money. Um, yeah, given the size like the funds are being raised and the valuation of these companies. Um, but yeah, I guess yeah, back to the portfolio stuff. We do have a company that's doing Americanmade textiles. I built their like first factory like fully automated factory here in LA. And basically the math makes sense. If you can like remove labor costs from textile manufacturing, it actually makes sense here because of all the other stuff that goes into like logistics and um like

44:05 packing. >> How do you remove the labor costs? >> It's like basically full automated factories. They have these big >> Oh, epic. >> One second. They have these like massive knitting machines um that they basically have like lined up they have um I don't know if you seen the Amazon factories but um they have these like >> yeah I've seen these >> these like plastic kind of bins on the on the ceilings and basically when you need a thing like go over grab a thing bring it down they have that for yarn so basically like you get an order I mean obviously there's like some there's large quantity or which different than like low quantity but like I say you want to make this I don't know blue or whatever American flag sweater. Um it'll like pull a yarn, bring it over this robotic arm. It like picks the yarn up, puts it in the machines. The machines do the entire thing. It's like there's a

44:50 they >> Oh, do they have like a bunch of loomers sitting out? >> Yeah. Yeah. I mean, they're like >> We should definitely play a video of the loomers dur like during this thing. They're so [ __ ] cool. They're like one of the coolest to watch. Ah, like if I had to pick one machine to put in the background of those ASMR sand cutting videos as like another visual element to distract people, Loomers. Definitely. They're so cool. >> They're pretty sick. Yeah. >> Um, but any >> I always I always was a massive sucker for those how it's made videos. Just a huge sucker for those, dude. >> Yeah. Yeah. Um, so yeah, they're they're doing cool stuff. Um, and like other things, >> say the company name. What's the company name? We got we got to teach Jacob. It's not in Jacob's nature to do the disgusting shill. So, he does it. He just goes, "Oh, well, they're doing American, you know, textile

45:36 manufacturing." >> Like, we're like sitting here like screaming and crying. We're like goating your [ __ ] port. Please promote your investments. >> Yeah. Yeah. [laughter] I'll tell you. It's called Framework. Framework.co is the website. Denver Ravern, the founder. Um they if you go to their website, you can see kind of the first sweater they've made. Um they're crushing it. The only thing I was gonna say is like the lead times for any like textile or any Yeah. textile order basically from from China. It's like eight months basically. Like the unlocks you can have, you can make them here. It's just like you can test out way way quicker and like not have to buy. I think Kobe brand >> the other thing that goes a lot faster is the process where you go, "Hey, send me a sample." And then they send you a sample and then FedEx it's like 30 days

46:22 to get in and then whatever the >> [ __ ] the one time the US government worker actually checks the [ __ ] package is when they send you five t-shirts from China the most dangerous possible shipment >> and it's like you're not pulling up to China to to go check the material for this order of you know if you're doing an order of of 10,000 20,000 50,000 maybe but maybe you're just maybe you have a company and you want to do you know 200 shirts 300 shirts or something right And so you're not But where where are these guys based >> here? LA. >> Yeah. It's like you can go down to LA and be like, "Oh, let me check out this material and and whatever." >> Uh makes a lot of a lot of sense. I also think the reality is with a lot of this stuff, there's nonobvious paths, right? When when you learn to do

47:07 factory automation, you start to go, "Okay, great. I can do textiles." And then textiles is actually relatively complex in so far as the automation is is quite difficult. in my in on my I'm not you know not my expertise but my understanding from speaking to people is that it's one of the more complex processes also because we're huge [ __ ] about quality around this stuff and people will accept like shitty you know other types of manufactured plastic goods but for clothing you could really tell very easily if it's good or bad >> um and the complexity is very high right because oh I want a double stitch I want a triple stitch I want a hoodie I don't want a hoodie I want you know I want it to be oversized or not oversized and so the complexity in increases a But um I'm very excited about finally starting to have some manufacturing in the US and some healthy automation that's not So

47:53 how do you feel about this? One of the the big things we'll sidetrack from the the tasteful show really quick. >> How do you feel? I'm I'm pretty bearish on the humanoid robots. I'm going to be I'm super bearish robotics. Very bearish humanoid >> humanoids. And my Lucas was very scared there. He's like, "Oh god, is he gonna say a super soy take?" I'm just very antitheoids. I think the humanoids are, you know, it's like cheap circus. People like them because they can do little tricks and they can dance or whatever. Um, but for very few things, I think Travis put this the most concisely, which is for very few things, the the most the best way to do it is a humanoid. The human form is only optimal for farming boomer likes on on TikTok. That's what it's optimal for. And it's

48:38 not even it's the anxiety react is what you're getting. You're getting a bunch of 45 to 55year-old men and women going like, "Fuck, dude. I can really imagine one of these things breaking down my door and taking my guns, bro. That's scary." >> Yeah. I I mean, for for sex robots, you kind of need you kind of need humanoids. I get that. >> No, no, no. That that again also [laughter] >> just goes, "No, no, you don't need that. You don't need that." >> Like, "No, wait. Have you seen the cat robots they're making lately?" >> Yeah, literally. [laughter] Um, no I I I I agree. I mean I I think that's like the clear thing is just like the fact that there's like look around the world like look at any factory like there's robotics already and like if it would if it was better if it was done like a human form would have been done

49:24 that way. That's just not how it is. It makes sense. >> And then yeah, I think >> when you think about the evolutionary pressures that created, you know, bipedals with with two arms and 10 fingers, it's not creating shirts at a factory, right? It's it's picking up like a hatchet or something or or walking around, you know, the savannah. >> And then you get the dumbest arguments for why the humanoid form must remain in robotics. They'll be like, "Well, how else would you go upstairs?" You're just like, "Dude, this is [laughter] The only way you can go upstairs is with like a 4 and 1/2t tall center of gravity robot and two legs. Like come on, [laughter] bro. >> Yeah. Yeah. Um yeah, that I I I think

50:10 like the only time it would make sense is that like we were unable to like really change the way factories were developed or designed. Like there's obviously one particular like era which is where I spend most my time. It's like the the optimal way a factory is laid out can be like totally improved if we don't have humans walking around >> and like we can just make it way more efficient. So like the only argument would be like oh like if we're able to like do that just like doesn't work like the hidas don't work or the whatever else manufacturer comes out there trying to do automated manufacturing if those don't work like sure we could put like a humanoid in the machine shop and I won like they'll figure it out. Um but like that's just not really going to happen I don't think. Um, and then yeah, also obviously outside of that, like there's like so many other reasons why human just don't work. Um, I think obviously robotics general is interesting and like we invested in a company that's doing like insecttoid robots like inspect

50:57 industrial like equipment which I think is like interesting. Humans like obviously can't do that. >> That's it's also really horrifying. Like I almost prefer when the companies will be like this is a totally alien design that nobody has ever done before. When they're like yeah we made this thing that looks like a spider. You're like ah [ __ ] Like that's kind of scary dude. >> Yeah. Yeah. Um, it does look pretty scary. I'll be honest. [snorts] But yeah, I just think at the end of the day, it's like labor is cheap elsewhere and like you know they're not cheap at all. There's like really no reason why we should try to be like competing with labor cost in the short term as well just because like yeah like it's not going to replace anybody like for a very very long time. And then also once that does happen like these other like full automated factors will probably be working and those human like that's just not going to be what's going to happen. So, >> where's somewhere where you don't maybe

51:44 have a company, but you see a category or you'd love to see a company? Like what's or or do you have things like this? I assume a lot of this has filled out over time because it has gotten sexier as a space. >> Anything like super exciting right now? Um I I I have done like some stuff here. I still think it's like a pretty interesting market like the chemicals market in America. like across every stage of the manufacturing process. There's just like really like most chemicals that are made in America are like either subsidized or like >> the precursors made here. It's too dirty. There's like a lot of stuff there that could be interesting. Um we invest in one that's doing like uh like ethanol production right now. They can eventually get like other stuff but

52:29 they're started with ethanol which like a pretty crazy market. I don't know if you looked into it, but like most the majority of the US's corn is turned into ethanol. It's like a very inefficient process because like it's obviously taking a bunch of land. It destroys the soil and like there's like a massive like >> and it it has not only does it destroy the soil, but everything that you use to farm the corn is just absolute cancer and it gets put into the runoff water for all of like this. This is a huge problem in the Midwest with water quality and you have all these really really archaic water standards where it's like yeah like you can have that much atrizine and it's like you go to Europe and you look at European regulations and they're like yeah if you ever put uh 1/200th that much atrizine in the water supply we you publicly like huh [laughter] okay well I'm sure it's

53:15 safe. >> Yeah. Yeah. No the farmer lobby is kind of crazy. Um, >> the thing that always drives me crazy with a lot of these these lobbies or these environmental groups is when they're like, "Oh, we can't possibly have coal production. You know, we we have to we'll have electric cars." And it's like, dude, like, do you know how your electric car, especially with Germany, for example, this is the big thing, right? It's they turned off all the nuclear. And they're like, "Oh, we're going to have electric cars. It's going to be the future is going to be clean." It's like, dude, you turned off all your nuclear. You're using coal to power these electric cars. Actually, gas car might even be cleaner than this than coal production. It's it's very very >> a lot of these countries too during the war had to uh like they had their LG pipelines just completely blown out and so they had to go to these extremely esoteric forms of medieval power

54:02 production that are just outputting like 12 times. >> We're not far from we're not far from them putting people pushing a wheel to generate. [laughter] We're only one or two LG pipelines away. No, but you you could tell them about that as an energy source. And there's there's a point in liberalism where they will say, "Well, that actually sounds really clean. That sounds like it has no pollution." And then you're like, >> "Creates a lot of jobs, sustainable jobs all day long, dude. This [laughter] is great." Yeah. Yeah. You have a lot of that stuff. It's just completely insane. >> Yeah. Yeah. Um, maybe we'll bring back like the the rowers in the bottom of boats, so it's like [laughter] very >> fuel and like there's room to remove all the gas powered engine. >> I think this would be an awesome one.

54:47 has have you looked at anyone doing Americanmade um you know peptides or stuff like that because a lot of the stuff is done in >> crazy sketchy like Chinese >> and it's you know Lucas might might be comfortable getting some rehea from questionable choices but I think when you go into like >> the the Pilates void market you know in in some of these cities in New York I'm I'm certain that it being like Americanmade they would feel a little more comfy. >> I'm [clears throat] going to be honest man. Have you ever talked to a woman who's done a lot of cosmetic procedures? >> They're much more willing to be experimental than you are actually. Like the the the Foy that you're imagining is not the one that exists in reality is what I will tell you. Like you're like, "Oh, they

55:32 would never inject weird Chinese [ __ ] into their They're injecting literal experimental untested combinations of like fish sperm, right? Like salmon sperm into their face. There's no study on it. There's just like there's three forum responses all made by accounts that kind of they look like they might be real women saying, "Yeah, I got this [ __ ] and my skin is so [ __ ] epic. This is amazing." She clicks by. Inject the [ __ ] out of that into me, [laughter] sir. [snorts] >> Yeah. >> Yeah. So, have you looked at any peptide companies or >> I I invested in one company. They're not focused only on peptides. They're basically focused on trying to do >> um um the website just says bioreactors but the the actual like initial focus is

56:17 photo bioreactors >> and basically just like using better like hardware and software to control it well and you can use that for like GLP ones. Their long-term vision is just like most are what it's used to manufacture a lot of these drugs is just very old and like all advertised out. So there's like no reason to improve it. And if you can just like make it better, you can actually make the drugs yourself and then also the end end product is cheaper. >> I think also a lot of these companies that you're looking at, it's like their main competitor is some guy who's 70 who's just not quitting his job because like what else is he going to do? And at some point he's going to either have to quit his job or you can just buy him out for for like 5x revenue or something like relatively cheap when you're a

57:02 startup and you you have a lower cost of capital and so now you have a monopoly on whatever you know intermediate >> uh industrial product you're making >> there was like one guy in Boston who was making it right and it's like you and the one guy in Boston. This is how we get back at the boomers for like selling all their houses to Black Rockck. We just buy all their companies for like a third of the price because he has no errors to like take >> lowballing lowballing boomers is is the is the way our generation is getting back. There's so many Zoomers that have have these group chats where it's like, "Oh, I found this piece of furniture I love. We're going to all we're going to assemble a cybol squad of me and my 20 friends to go. My my dad is >> Well, you can just AI this entire thing

57:47 now, right? Like you can >> you can also AI a lot of this. That's true. My my dad is trying to buy a car and >> my dad's very, you know, he's like super antiax and he's like, "Oh, you got to get sunlight and ground." He's like outflanking me on a lot of these based questions. And now he's he's doing the thing that all these guys do where it's like I'm buying a car without a damn computer chip, right? Which is one of it's like one of the classics, right, that everyone does. So he's looking at like 1990s Land Cruisers and he's like he he he doesn't want to have an account on any of these marketplace cuz they're like he's like they steal your biometrics. So he's like Sailor I need you to bid on this. And he's like can you ask him and I can tell he doesn't he doesn't have it in his heart to low lowball these people. And so what he does is hey you know this listing was up

58:33 for 6 months. Can you ask the guy if it still has the same amount of miles on the car? And I'm like, "Dad, the way you do this is you call up all your friends and you go, "Oh, you're asking 20K for this? All right, 8K. How do you feel about that, sir?" [laughter] And then you you slam them with like 10 8K bids over a month. And then a month later, you walk in with like a 12.5K and wow, it's such a beautiful you've really maintained this so beautifully. And you're like, I'm happy to come out and see it on when it's comfortable for you. and then you get it for 12K. Um, but yeah, >> the other the other thing is the other thing is when you're doing the fake low balls, you're also supposed to say, "Dude, I'll give you 8K, but only if it has the same amount of miles. If you've

59:18 driven this thing a single additional mile, it's it it's down to 7K, man. I'm sorry." Uh, >> and and you want to be an [ __ ] because that way when you come in with a real bid, you can be like moderately nice to them and they're like, "Holy crap." Like Zoom. They're like, "Wow, young man, you're so you're so respectful people in your generation." And little do they know, you're abandoning off here. And I know Jacob's like there's an exact analog to what we're talking about uh in the fundraising [laughter] space and he's like, I'm not going to make it though. I'm not going to discuss that. [laughter] [snorts] >> Yeah. The issue is there's too many investors though, right? That's the issue there. It's like with these companies you're talking about there's

1:00:03 literally nobody's trying to buy it. Nobody knows about them. I have actually lots of companies that have done this and I won't say the names. It's not public but like they've been able to just like get to businesses that like if they raise venture money or try to they would be like worth billion dollars. [laughter] >> Yeah. But they're not a venture company. Yeah. >> Exactly. Like I was >> their cost of capital is super high because it's not a sexy business. It's not run by a 25-year-old who was at SpaceX. It's run by, you know, Joe, who's like a, you know, he's like a German guy who lives in Pennsylvania or something and he's been making artillery shells for the US government. And you're like, [laughter] dude, Joe, you're like, you're 80% of the US government's artillery production right [laughter] now. >> Therefore, you get [snorts] halfx revenue multiple on your business. [laughter] >> Yeah, we're gonna Joe, we're gonna Joe,

1:00:49 I really like you, so I'm gonna make you a great deal. I think this business has some structural weaknesses. We're going to need you to come on as a manager. We're going to pay you 60k a year, Joe. Okay. For the next, you have to stay on and keep operating the business for the next five years. [laughter] >> Your your house is collateral if you don't actually grow 100% year-over-year. >> Collateral. [laughter] And Joe still thinks that like you can get a $5 lunch, right? So Joe's like, "Holy [ __ ] dude." [laughter] >> Yeah. just cooked. >> He's cooked, dude. But this is good. This is like you being efficient, right? You turn around and and you you repric this ass head. It's actually healthy. Like paradoxically, this is a very healthy thing to do. It's a lot of these

1:01:34 assets are worth more. >> Then you go and announce that you acquired this business that makes half of the American artillery and raise it like a thousandx like revenue. >> Immediately turn around. you immediately turn around and you're like, "We've secured a strategic asset with 80% dominance on the military supply chain with an inelastic purchasing power from the US government of $400 million every year." And then Sequoia is like, "Dude, here's $20 billion. Please, please [laughter] take our money." And then the DO is like, "Can we please give you a grant? Can we please give you free money? No strings attached. Please. >> Yeah. The funny thing is like this is like actually [snorts] like I could >> No, this is real. This is like

1:02:20 >> Yeah, dude. This is a great and all the all the MBA guys are doing search funds for like lawnmowing companies or whatever and and they could be doing search funds for industrials that are, you know, like you have a standing bid. There's no one else they can buy this stuff from in a lot of cases, right? >> Yeah. Um, I think the thing that's really valuable in a lot of these cases is the the intellectual work, right? There there's like specific employees and that's where it is a little scary where it's like, does this employee stay or do they not stay? And you really really need these people to stay. This is the specific problem with most of these companies actually is there's three guys who are like 38 to 47 years old and they've been working at this

1:03:05 company for 20 plus years. >> I think that's pretty young. It's a lot worse than that. They're usually a lot older. >> I a machinist [laughter] in America 70. It's not something that's fair. >> I'm I'm uh remembering I'm showing my age of when I was dealing with these people. But I guess >> these guys are like 70 and it's like the last guy who knows how to handle the the explosives and artillery shells. There's a funny story of like I remember the with some fighter jet that the US bought like this this like I think paint from this this like one company in like Midwest and then they like the guy died and they used like a new paint shop and then like the paint like reacted horribly with the metal and just like there was some like weird acid percentage didn't end up working like just like destroyed all the paint or

1:03:51 something like that and it turns out like this like particular town in wherever the Midwest like the water they use for the paint like a particular like acid or pH level. Like that was what allowed her to work with the metal. And like this stuff is like impossible to like have written down somewhere. It's like it's just a guy's doing. >> Yeah, there's so many of these weird This happens all the time with machining where you have one of these old guys that has a black box uh a black book that's just like, okay, when I'm programming it, I have to know that if I am using a machining head of this diameter and this finish, I can never run it. I can never run it in like right to left w at this speed on this material without like shearing the entire [ __ ] head off unless I have some sort of like uh and then they'll have like a cooling or a coolant spec or like a lubrication

1:04:36 spec and it's like it'll be some weird thing where technically the machine will be rated to do this thing and it will perform the function in in reverse totally fine but there's some just weird resonance that gets activated when it goes this one way because a motor is like vibrating at a frequency that reacts really badly with the dampers of the machine on the floor and it just explodes the whole thing if you do it going the other way. Right? Hydraulics are this way with surface finishes. Anything involving high frequency surface or high frequency uh circuits is all this exact same black box. Uh and if that guy ever leaves, you're just totally [ __ ] Like you were talking about the uh the bioreactors. I guarantee you that for the synthesis of any complicated molecule, which includes basically every peptide that people are

1:05:22 using, there is some weird thing where some guy has figured out that if he goes over and at some point in the synthesis puts his hand on the on the beaker and makes sure that it it gradually rises in temperature by like four degrees during one phase of the synthesis, it winds up with like 0.5% pure outputs. >> Yeah. >> Right. Like it's just so goofy. Yeah. Yeah. And I think like that's I think the whole thesis that company measure is like they're trying to basically codify a lot of that and be able to get really fine measurements of like how stuff is actually changing temperature- wise and be able to um like mass produce stuff. So yeah, it is crazy though how much of this how much of like the defense industrial base is like really just like this guy in Iowa. Um yes who makes pay with his like local water. It's a

1:06:08 particular piece. I have a friend who recently was uh working with Buck Knives Manufacturing and the heat treat on Buck Knives is just renowned as one of the best things ever. And so I when he told me this I was like, "What are they doing, man? I've got to know like what's the automation for this?" And he's like, "They have extremely manual machines and they have an old man." And I was like, "Holy [ __ ] dude. [laughter] >> That's crazy. >> What does old man do? Did he tell you?" >> Yeah. Well, that's the thing. It's like uh he walks around and he presses the buttons in a certain order and he knows he knows based on visual cues of a batch of knife blades whether or not it needs more of a given variable or something, right? And it's like you could in theory

1:06:54 codify this like you can codify everything but almost you start wondering like >> is this old man uh do you remember those studies where they said if you say nice things to the plant it grows really well and if you say mean things to the plant it dies. You almost wonder if this old man the love that he has in his heart for the steel is actually causing it to become harder and less brittle. [laughter] Steel actually has feelings. >> Yes. Like it's alive. It's all alive. >> Yeah. Yeah. It's funny. >> Like how much how much of this is getting backed directly by US government grants. I've been curious about this for a long time because obviously they want more manufacturing. It's been apparent for a very long time that China has sort of mogged us on production of I mean

1:07:40 everything that you need for drone warfare uh for one and I think they're actually mogging the entire world. I think there was a period where China was producing more like more than 50% of the global production of all drone uh weapons. I I don't remember if it was weapons or just drone output in general, but I assume the US government sees that and is like this seems bad. Uh we should incentivize not this. >> Yeah. Yeah. I mean, I think the the money part early on obviously is not really coming from government. I at scale obviously it's coming from from government. Um there's a bunch of these like grant programs that they have that like in reality don't really do anything. Like I

1:08:26 don't know if you the Sipper program, but it's like they have these like phase one, two, three, and then eventually once you get past that you're supposed to like get a per of record that like never happens because they're different groups inside of those things. There's like no actual way to do that. So like I most people try to like oh yeah we're getting these like this phase one sale but like doesn't really mean anything in reality and that's a small business something I don't really what it stand for but it's just like a grant they give you to basically solve some particular problem for for DW um out at the large scale it's like obviously very heavy on on the government side of things for defense for a lot of the manufacturing is trying to be pulled back to America obviously tariffs are like a really big part of that that does help for sure like there are ways to get around that as you mentioned Um, and people what I found is like I

1:09:11 was talking to one of these guys yesterday who runs like a big motor business. He was saying like most people if it be if it's like two times or more the cost of of like Chinese people like figure out a way to like get around it. If it's in that range of like one like less than 2x at least what he said is like people are fine paying that if it's if it's America car like at least not a Chinese um product. Um, and that's kind of where Japanese like motors are in his particular example. So, uh, a lot of people go to Japan as well if they can. Um, but yeah, like I think for manufacturers, it's been like, yeah, tariffs and then obviously banning a lot of stuff, um, in obviously in defense and then in this this more recent robotics thing is also pretty pretty interesting for the general like robotics industry. I think I think we'll probably see like a lot of the same

1:09:56 trends that have happened like the drone space which is like you have basically get to buy all American if if you want to be like part of the like they have the if you want to be like your products be bought by D like actually probably do the same in robotics space generally um whatever that looks like just because that is obviously also like a very critical kind of supply chain issue if all of our robotics components are not made in America or at least in in all countries. So, um, yeah, it was like a couple of the main areas where they're pushing on things. >> But for stuff like textiles, I assume it's obviously beneficial to make this in the US just from an economic perspective for us, but I assume it's going to be a little bit harder to get uh to get anyone to sign that bill knowing that it's going to be as much. I

1:10:41 mean I think it depends um how yeah how you word it like with framework um they're yeah they're not really doing much on the government side I think the one thing he's working through is like the way the machines are amortized over time he's trying to do some something there executive order wise I don't remember the exact context there yeah but a lot less >> those loomers are really expensive actually that would make sense I think that was always uh >> because like I'm most familiar with these in, you know, like a cable harness, how they wrap it in that synthetic weave. >> I've I've worked with a lot of the companies that made those things and uh >> it's pretty much a oneoff machine for all of these things. >> Yeah. >> Like they're all custom.

1:11:27 >> Yeah, I know. Totally. Have you seen Senra, by the way? They're doing wire harnesses autonomously. >> No. This is epic, though, cuz a lot of these companies also were totally manual. Literally the way that they would do it is they would have employees like human employees go and they would have peg boards that were every every peg would be maybe half an inch or an inch depending on how specific it needed to be and they would just literally lay the wires out and then go and manually crimp them all and then go and toss them into the automated loomer. It was totally insane to me when I learned that this is why I was always like why are these people charging $900 for a wire harness? And this was back this was back when $900 was a lot of money, right? like this is back before we did the whole inflation thing. So, uh then I went over and I looked at the production process and I was just like, I

1:12:12 understand now. It's because they have they're they're paying a team of 12 people uh two hours each to produce [laughter] this. >> Yeah. Yeah. It's very hard to automate though. heard like I mean there will they obviously have to get a point to like they have enough data to like do all of it which is not the case with all obviously a lot of this stuff but um yeah they're doing they're doing cool stuff >> and then I'm curious have you guys looked into other models of financing like building out a debt vehicle or building out a relationship with someone like this because a lot of these companies it's you know maybe I don't want to sell equity or I want to do some kind of convertible or half and half you know there's there's different models I think that more sense for industrial financing sometimes. >> Yeah. I mean I I think yeah 100%. Um I

1:13:00 think like the way I have it like the key thing that matters here like having a relationship with these founders early on like the way you do that is not through debt at the early stage. That's just it's not really like sustainable model. So you kind of have to like give them money for equity. That's just how you build the relationships early on. Then from there you if you have that and you like get to know them well and help them out and like they like you they'll want to work with you and that obviously can lead to million other things. um whether it's machine financing, just general debt financing, um doing follow on stuff obviously. So I I think the way I think about it is like it's kind of like the core like wedge into what we're into this like hard tech space. Then once we have something that like repeatably works, we think we're at that point we can kind of start think about what are the products we'd add on top of that. Um I think machine is like a very interesting space obviously like the there's a couple companies out there doing machine financing for startups and

1:13:45 the they charge like these like it's like 30% like rates like it's like it's insane how much they're charging people. Um, so I think if somebody can do that, well, that would be interesting just because like it's a there's only like two or three companies that do it and they can just basically like work together to set set prices. Um, so I to look at in the long term airbor doing a lot of this stuff. They're not doing the machine. I think there's like some regulatory thing they don't have figured out. So they can't do that, but they're doing a lot of the more personalized debt packages for these earlier stage companies just because they understand hardware versus like JP Morgan whatever um or Morgan whatever the company is like doesn't really understand it as well. And if you can just like get in early and get to know these companies and like be able to read the room better than these random guys in in New York like you're able to underwrite it

1:14:31 better. So then they're doing cool stuff. But I I do think that's very interesting honestly for for hardware. Um, but that's kind of like a longer term fine. Do >> can you tell us a little bit about Well, in some cases, I think there it's like you can collateral, you know, some piece of industrial machinery or something, right? For some of these companies, it's like, oh, I need a centrifuge or my biotech company and it's like the centrifuge is worth 2 million bucks. I have a million. Hey, let me put up, you know, get a million bucks and and put the machine up as collateral, right? Or something. I I think you can do stuff like that. >> Yeah. Yeah. Yeah, I mean all like these machine finding companies, they're all like generally like u giving you like used machines. So like and like the value obviously like is much less if it's already used. So like if they have

1:15:17 obviously the 30% rate they're getting as well as like the machine collateral which like I collateral which in reality isn't going to go down in price and machine values actually go up a lot of the time because there's not money they made. >> Yeah, that's one of the super funny things like these things are all value. They really shouldn't be but they are super value accreative. because nobody makes them. A lot of these machines are made if they're made in Europe and made like Germany. A lot of them the ones that are made in America like same are just like some random guy who makes this particular machine and like they're they're aging out. So there's a lot of stuff there. I I'm talking to a guy trying to basically build like a new CNC machine. Another interesting area like looking at these machines and how do you like make them here? Um it's very hard to do. It's like very expensive obviously but that's another interesting area. >> Yeah. What's the vibe down in G? Do you guys hit the bar? you we have to come

1:16:03 down. We wanted to go down to LA and and probably would have gone down to Gunda less when we were in SF, but >> we both got kind of sick back toback and then we didn't have a lot of time, but we definitely have to pull up at some point. >> Yeah, I know. It's fun, dude. Like again, like because of these like more institutional investors here, it's like a lot more chill and laidback. Um >> I also assume you guys like hang out with normal people a lot more than like the the tech crowd. And >> I really like I really really like hardware founders and guys, man. like they're just so good. >> I agree. >> One of the weird things about tech and SF is that the tech people like there's non- tech people who live in SF, but it feels like they don't interact with the tech people at all. Yeah. It's like entirely separate social circles, right? >> And the best part is like you'll see on

1:16:48 Twitter it's like dude like SF is so bad for the barer pack is like all those like random people from like Marin County who like came down for the day. >> Yes. Yes, dude. Or you have people in SF who's like there's no hot women in SF and it's like dude I was >> like there's no hot women at your party in SF [laughter] >> cuz you're in your in like your office all day bro and you're at like Corgi cafe there's not hot girls there I'm sorry but [laughter] it's like you can walk down by the marina if you go to the beach there's hot girls like >> when are we getting when are we getting Valor Cafe and some Valerie girls on the timeline. Okay we got to text Isaia about this. It's funny. I won't say the name of the company, but there was one big factory opening where they like basically busted a bunch of bunch of like UC Santa Barbara girls to like one of the factory openings and like [laughter] no one does this. No one does

1:17:33 this. This is This is like, dude, that's so good. That's so good. We need some more some real [ __ ] like that, dude. >> Why do you think nobody does this? Why would you guess that nobody does this if you had to [laughter] >> Dude, I don't know, man. It's hard. >> It seems like such >> That's so funny. So, so if you if you can't press if you can't bench press 225, is it even worth trying to apply to the cohort? What do you think? >> I mean, yeah, 100%. You're building a company. Come by. I'm not [laughter] going to >> say no. So diplomatic. >> You cucked, man. >> He cocked. He cucked out, bro. >> Yeah. I mean, >> you do have to It is You can't ever have hard rules, you know? I I was when you

1:18:19 were saying that you usually like investing in the 22 to 26 year olds. I was like we're going to get some guy commenting saying like, "Oh, so you're saying I'm old? Oh, so you you wouldn't hire me cuz I'm [laughter] too old." And this is just what happens whenever you make a hard rule, right? Oh, so I don't bench enough for you to invest in me. Like [laughter] someone will make it super who's super triggered out. It's like [laughter] >> I I have had that actually like I had I had some LinkedIn post that says something like oh we mess like young engineers building it's like well actually by not um like prioritizing people of all ages like you're missing out on like a great like like no one cares he like links you to the anti-discrimination laws [laughter] >> bro this is something this is something that

1:19:04 old software engineers do a lot I've noticed this a lot from older software engineers where they an incredible chip on their shoulder because they've lost the neuroplasticity to learn whatever you know it's like you're in software every 6 months in the bay you have to learn some new meme right you have to relearn everything and this person no longer has the neuroplasticity to do that every 6 months because he's 48 years old and his brain has completely frozen and uh so he sees all of this stuff and he's just like okay man like uh as my only competitive advantage is linking this person the employment law like that's my only way out. [laughter] >> Yeah. Yeah. >> I I think with VC it's like I said earlier, it's like you're usually trying to find people and select them in and

1:19:49 not find people and select them out, right? It's not like I'm going down a checklist and if you don't hit anything on this checklist, you're out. It's more like I'm looking at you and there's maybe 20 things I look for and I'm I'm trying to get you in. I'm not trying to get you out. Right. That's usually the way the process is run. as you said, like if I found somebody that made sense for for us. >> If you found someone if they bench two 210, it's okay. All right. If you bench if you bench two, as long as you're over 200, it's okay. >> Yeah. Yeah. I think >> No, no, no, no. What if What if you're over 200, but you weigh like 400 lb. Like, you have to be [laughter] more specific here. >> A ratio here. Whatever the optimal bench to weight ratio. >> What's your Wilks score? We'll use this is the one time I'll ever reference a stupid [ __ ] powerlifting metric. You have to go by a Wilks range.

1:20:35 Yeah, whenever we come in, we'll have to like measure it beforehand. >> Dude, it's so crazy. Our our meeting was so funny. Um, we we met by the pool outside and then we were having a a very loud a very oblivious political conversation out loud at this hotel's pool area and this random guy comes over and he's like, "Sorry guys, I couldn't help. I don't want to be rude. I don't want to insert myself in your conversation." And then he just totally he literally like pulls he like drag loudly drags over a chair towards us. >> I don't want to insert myself in the conversation but inserts himself in the conversation. Talks about how many times the actors are destroying the country pulling the chair over. >> He he didn't do the thing where he like comes over and stands there for a minute

1:21:21 and then he's like do you guys mind if I pull he just straight up pulled the chair over but then it was sick. He started doing and a lot of times it's super soy when someone comes up and starts doing magic. He did the craziest magic thing. We were there with Kyle and Jacob and he goes, "Jacob, close your eyes. I'm I'm gonna touch you. Tell me where you touch you." And he doesn't touch Jacob. It actually It Yeah, it sounds not great. It It [laughter] actually It's one of those things that blows up your model of reality. Like he he never he like Jacob was like, "Oh, you just touched my index finger on my left hand or something." And he was touching Kyle's index finger on his left hand like a meter away from from Jacob. And I'm just kind of losing my mind. It's one of those things that you see happen and you you can't really accept

1:22:08 that this is real because if you accept that this is real, you become some sort of like crystal energy weirdo who lives in the woods and and eats like very specific mushrooms and insists that >> but also in order to accept that it's fake. You have to accept that your friends are in some sort of cahoots with each other against you on the side of a random guy who came up and just >> you all you Yeah, exactly. He was all you're all in it together. >> I saw it happen and Jacob was not like super predisposed to be friendly to this guy. I [laughter] don't think >> Well, the guy he like walks up and he's like here's a conversation that was like definitely not like Fox New >> was not like a anyone come in and join this conversation. >> And he's like what is your full name? Where do you work? Like he [laughter] walks up and it's not like

1:22:53 he just like we're having Yeah. a somewhat politically contentious conversation and this guy walks up and he's like, "So, what's your full name, place of employment, social security number, mother's made?" >> You have a lot of views I could get you fired for, Mr. >> What was it again, [laughter] >> dude? It was one of the craziest openings of all time. Yeah, >> but I I was very impressed in his magic. But it's one of those things that happens to you [laughter] and you you have to pretend it didn't happen. Like you you you really do. I think for Jacob it's better because Jacob can be like, "Oh, SA SA and Kyle were just [ __ ] with me because he didn't see it happen." But I have to I I don't know. I just have to go on and live my life like this, you know? Well, the crystal healing stuff is all real,

1:23:38 but this is the problem with all of it is like, yes, it's all real. Astrology is real. The crystals do heal you, but like you know this, how do you use it? Does it help you in any meaningful way? Right? Like [laughter] it's like this person can telepathically send energy waves through your friend's hand into your other friend such that he feels his finger being touched. That's crazy, bro. Can you make any money from me? [laughter] >> Like, can you do anything with this information except ruin your life and become a schizophrenic boomer who's like putting shungite crystals around your house, [laughter] >> which also works. The shungites work. They decrease the EMF. Does it matter? No. I've never felt anything >> [laughter] >> Yeah, it's kind of like like the CIA and the stakes like pulling out the most

1:24:24 random things like let's like make everybody like take LSD and like play like >> do moon moon remote viewings. >> Yeah, literally it will like figure out telepathy because like the the the Russians did and then like didn't happen and they just like gave up and got in trouble. like the declassified experimental files for astral projection or whatever where they're like >> if we artificially stop your heart. We've noticed that you can go deeper into the astral projection for longer, right? And then it's like a declassified government document and you're reading this and you're like, dude, like >> I just have to I just have to forget this. There's no good thing that can happen for me integrating this information into my life. Yeah, it it's funny like it was all like in like like

1:25:09 two decades and they kind of just like stopped doing it. It was just like the most like skitso ideas for like literally two decades and it stopped and now they're doing like nothing now. It's going into like foreign cont. >> I also somewhat wonder at this point if like what if what if the SCOP from the government is just releasing these things such that it makes everyone who's paying attention to anything the government does seem disreputable? Like what if the entire point is to poison the well? What if UFOs are only talked about so that everyone who accidentally figures out like it's like oh like I did >> what's the what's the kid's name who did all of the research on uh >> you know like the Somalian daycarees and stuff like that. They're like so we need to make sure that everyone who does enough research into these programs also

1:25:54 hits on our UFO [ __ ] and that thing about astral projection so that when they talk to anyone it just all gets lumped together and they're like yeah just don't listen to this guy. is [ __ ] nuts. >> Yeah. Yeah. Yeah. The the theory I have is that the the UFO stuff is like it all start like Trump pushing on this all like came around him trying to like push funny for Space Force and like obviously you can be like, "Oh, there's like these unidentified objects in space. We want to spend money on Space Force." And like it was all very correlated with like interesting. It's like we can't we we haven't been able to raise any money for any sort of serious NASA expedition because everyone's like you're giving the money for rockets when my daughter can't afford blah blah blah like my son

1:26:42 is on food stamps and so as long as there's anyone in the country below the poverty line it's just like yeah sorry you can't make rockets >> if Jacob if Jacob was in charge it would be like my son is on food stamps and you're going to the moon be like a good Reminder, we're canceling your >> We need to cancel that guy's cancel that guy's food stick. >> Critical path. Critical path. [laughter] >> Cancel cancel his food stick got 10 ft taller. [laughter] >> Yes. >> You got to knock him down. >> We have [laughter] to get stuff done. We have to get stuff done, man. Well, I don't know if you want to show any other company you want to talk about or the cohort stuff. Uh, is there is there maybe one more company you want to spotlight that maybe doesn't because I

1:27:27 think a lot of people have heard about Isaiah from Valor or they've heard about Augustus at Rain Maker and I think these people have done a great job at creating their own brand. Who is someone you think is is a little underrated >> and found socials. Give us your founder who's the least good at posting. >> Well, that's way better than being like who's your favorite founder and then he has to pick one. So, we're we're going like who's the worst but also good, you know? >> Yeah. This is one called Actnide. It's acnide acid dyn.com. They're doing medical isotope enrichment in the US. >> What the [ __ ] What does that mean for like me? >> It's when they inject It's I don't think it's an MRI, but it's when they inject something radioactively so they can see where it like pools and it biomarks.

1:28:13 >> Exact. Yeah. Yeah, you're right. It's basically for kind of being able to see inside people's bodies, but it's like a very large market. Basically the whole idea is like there's no um there's like very few isotope enrichment companies in in America. If you just like what they did is basically they ran to all these isotopes by like cost per gram like going down from top to bottom of like what can we start with that nobody else is doing. Obviously it's cover general matter doing like the risk which is which is super helpful. Um but like there's so many of the rest just like they're not focusing on. If you could just like kind of work through a list it's like a multi- trillion dollar business easily if you could do all of them. They're kind of just work. This one's like I think some in like $32,000 per gram once you enrich it versus a couple dollars per gram beforehand. >> And this is super one of those things

1:28:58 where both there's like one guy who makes the [ __ ] and also all of the alternative paths to getting it made are some country that's on like a super turbo mega ban list and the AMA has said like if you ever accept shipment from these people then we just allow everyone to destroy your entire business with liability suits. >> Yeah. Yeah. >> Um, yeah, exactly. The company making this one is like a Russian shell company. Um, and like it's owned by the big Russian government. So, it's like that's obviously not where you want your supply coming for this coming from for this particular thing. Um, and there's like a ton of stuff like that honestly where it's just like we stopped from a lot of stuff. Like Russia like been really big on that since like the cold war and like they still marketed it. Um, and then they have like a big stateaterun company that does a lot of

1:29:43 the Russia that Americans buy for buy from. They have all these shell companies in America. They're like routing stuff through. So, it's a pretty easy like way to just go and get a band and basically take all the demand. >> Dude, what a funny people people always go like, "Oh, you're obsessed with supply chain, you know, sovereignty." And it's like, dude, Europe waged a war against Russia. Like, waged a war against Russia when it was their entire heating, energy, everything. Germany. I keep seeing these funny videos, dude, of Germany. I I was introduced to the series of videos where the German authorities go into a house and they literally like they do the opposite. You know how you have the house flippers that like buy a house, make the shower a little better, and then try to flip it

1:30:29 for 2x? The Germans apparently are doing the opposite where like the the government will come into your house, like [ __ ] up your shower, make it shittier, and they're like, "Well, this is now social good housing and so it's great. [laughter] This is this is what happens, okay? You either overpay for sovereign supply chains or this is what immediately happens to your country, okay? It's the alternative is really bad. >> Wait, don't they like put in place like a a worse German product saying >> because it's it's like luxury housing otherwise. And so they're going in and like making [laughter] the housing crappier. >> So amazed. [laughter] Dude, America needs the the way you used to have shows where they're like, "Oh, we're going to go to Southeast Asia and figure out how these people live." It's

1:31:14 like, we already know how everyone lives in Southeast Asia or in like the Peruvian Mountains. We need people to go to urban centers in Germany and see what's going on. That's where the real indigenous ways of knowing are happening. Okay. Vice to bring that bring back like documentaries of going to like random places and just like staying there. But instead of a random place in like Africa, it's like Verlin in 2026. >> Dude, Vice was one of the most insane companies ever. And I think the guy who founded it's Gavin McInnness, right? Did Vice >> Yeah, he started the Proud Boys, too. >> Dude, he started the Proud Boys. He created No Nofap. Gavin McInness is like one of these guys who's completely crazy. He He started Yeah. He co-founded

1:31:59 Vice in 1996. He started the Proud Boys. [laughter] He created nofap, I think. >> And remember, remember remember actually we have to do it this time. We're going to do the discussion >> call to actions. >> No, I dude. Okay. Do you know how bad it's getting? I'm getting notifications on like Spotify, Apple, YouTube, all popups saying like, "Oh, based on this amount of hours viewed, your channel should be and then it's like 12 times bigger, right? That means that you're not telling people to subscribe." And I'm like, "Holy shit." Like, we're so bad at this YouTuber meme [laughter] thing that they have made a programmed notification to rescue us. So now it's like, if you have made it to this point in the podcast, you have to subscribe. I don't care what you're listening on. It

1:32:44 could be Twitter. It could be Spotify. It could be Amazon podcasts, right? But you have to click the button and like it and also comment. There's many things. Tell us what is your favorite Midwestern hardware startup. >> [laughter and gasps] >> Tell us what do you what do you think about this call to action? Do you think we could have done this call to action better? Tell us about [laughter] this. Tell us what do you think about this. Okay. [gasps] We had a guy comment last episode. He was telling us uh he's like I really dude this bit that you did was really good. And I was like this is amazing. We need because we have no idea what bits we do are good. Can you please please give us more feedback dude? We're [ __ ] begging you. [sighs] But yes.