5 Startups That Looked Dumb—Until They Were Worth Billions

the the headline here is they made the investment so it's not like they passed they made the investment and their best case scenario they wrote was four hundred million as an exit value four hundred million and now it's a hundred and forty billion i feel like i could rule world i know i could be what i want to from at all in it like a day's off on a road travel never look let me tell you about something that i've been thinking about and i thought it was really cool and our french shield just shares the best stuff and so i'm sharing man on x the most interesting man on x the most interesting man i know actually he he does a lot of amazing stuff but he shared something but so i gotta give him credit but basically i saw this jeff bezos quote and i wanna know what you think about it and he said something where he said i think it's generally human nature to overestimate risk and underestimate opportunity and then went on to say and so i think entrepreneurs in general would be well advised to try and bias against that the risks are probably not as big as you perceive the opportunities may be a lot bigger than you perceive and so the interviewer was like you seem really confident and he goes well you call it confidence but maybe i'm just accepting that human bias and i'm trying to compensate against it and i thought this was interesting i've been thinking about this i i i saw this like weeks and weeks ago and every time i've been thinking i'm like there's so many businesses or opportunities that i see where i'm like i can't believe that that thing is that big and i myself fight this as well and where i think this thing can't be that big you know i think i've said this multiple times for different products so i said that will never work and it it becomes huge and even jeff bezos by the way he fell victim of this i there's just one quote where he was like driving packages he he says when i was driving packages to the post office myself and taping up and typing up all the listings i thought maybe if i'm lucky maybe this can be a hundred million dollar revenue company someday not like everyone has this but i saw this amazing thing where it was shield sharing a memo from be so be is a vc i think they're a fantastic vc but they're a a big vc so they created this part of their website where they release old memos and if you don't know that there is a memo where whoever it wants to invest into a company who works at vc they make a memo justifying their thoughts and then typically the partners like a agree on it they're like yeah that was a persuasive argument we're on board and so they did a cool thing where they released the memos from past deals and they had this amazing deal or this amazing memo on shopify and this was when shopify was raising five million dollars at a twenty million dollar valuation the company was doing five million in revenue and i wanna show how bad be who is a professional vc i i think they have tens of billions in under management i wanna show how bad they are predicting stuff so they said this is these are quotes from the the memo they said in two thousand ten shopify had a hundred and thirty two million dollars in gm which would put shopify and the top fifty online retailers and so at the time that is how small the category was let let's let's say the other numbers because that sounds like a big number right so they had five thousand they had ten thousand customers total and they were doing five million of revenue themselves so the five million of revenue that's the company's revenue and then all the shops on shopify their sales total was a hundred and thirty two million right gm now do you know how many you know how many customers say that do you actually know how many do they have now i know that they add more than ten thousand paid customers every week now i think there's there's multiple million customers they have multiple million and i so the company is now worth a hundred and thirty billion i believe at one point two hundred billion i believe they do something like close to a trillion dollars in gm so i can't even tell you what that math is what the most they're probably doing this amount like the one thirty two million like every hour an hour skip it yeah every hour yeah you're saying we underestimate the the upside of of these things we we underestimate the market size and the the the headline here is they made the investments it's not like they passed they made the investment and their best case scenario they wrote was four hundred million as an exit value and so four hundred million and now it's a hundred and forty billion they said if all things work out we think in four to six years this company could sell for four hundred million dollars right and we will twenty x our money something like that fifteen x our money obviously that's wrong the company worth a hundred and thirty billion dollars but they had all these other stats that were wrong and in the memo they even have updated quotes so the person who wrote the memo will give you an update and he wrote in the memo he goes a few months after we invested oracle had acquired wanna a shopify competitor for five hundred million dollars and i remember emailing toby who's the ceo of shopify about how great it would be if someday maybe we can achieve that outcome but i thought it was just a little bit too aspirational and then he has this other line where he goes some of the other employees and advisors at shopify when we made our investment they thought to themselves you know i think like this company at best is gonna be worth around fifty million dollars and so the associate at be who made this deal he goes toby these guys are saying fifty million dollars can we put something in the contract that says you are not allowed to sell the company for less than fifty million dollars because this guy was like that's all it's gonna be worth and toby me was like dude i'm not agreeing to anything like that but i'll i'll give you a handshake offer i promise you i won't sell into at least seventy five million dollars and so it's just funny that this is like how small the best of the bet presumably you know the top one percent are thinking about different opportunities that today are so obvious to us but back then we're really hard to predict so i have a bunch of follow ups on this because this is a subject i've literally been thinking about i'll tell you i'll tell you why i was thinking about this simultaneously but let me first just start with a little bit of humbling so here's a list of products that i was totally wrong about meaning they were already working so forget the scenario of that'll never work but like yeah that's working but that's probably small probably niche okay so here's products that i personally was wrong about over the last fifteen years calm and all the meditation apps my buddy alex was doing it he was in my peer group who's in our mastermind group and i was like that's cute yeah know that's cute like i hope you know i i don't really understand what you're doing here maybe you'll make some some money it'll be like a job i i didn't really fully understand it do like meditations now like a like there's multiple meditation apps that are billion dollar companies not seemed imp at the time he was also really successful already yeah he exactly so so i didn't doubt him i thought he was awesome and i didn't even think like it wasn't gonna work it's like it'll work but it's just small it just seems like a suit too small of a market okay other markets i thought were too small on snapchat my username was like has the word test in it still to this day because i was like yeah cool like but this is never gotta be a thing and i mean this is just like a goofy kinda sex thing how big is the market for that another one airbnb so i met the founder of couch surfing before i heard about airbnb and we to be hung out at my office and i was like wow couch surfing what a crazy idea go sleep in someone else's just go sleep in their house and they're in the extra you know couch or air air mattress that they have alright cool so airbnb comes out and i'm like wow great you're trying to be couch surfing how ambitious of you and i think couch surfing topped out at like fifty million dollars or something like that like it may maybe just max like a hundred or two hundred million and you know airbnb today is a like like a hundred billion dollar company i i i i read that i think in america won out of every thirty dollars spent on travel is on airbnb that's a cool stat i like that's insane right it's insane i absolutely insane yeah in america yeah one minute out of every day for every entrepreneur on average is spent listening to our podcast i bet there's like a number like that that's true right yeah and like they said it in like one of their pitch decks but it's just absolutely astounding that you and everyone else me too thought that it was just couch surfing but it's just it's not ten times better it's not a hundred times bigger it's ten thousand times bigger uber was another one black uber was like black car limo i was like cool rich people in san francisco who takes black cars small idea i don't understand why you know the founder of of stumble upon is like doing this but okay whatever i guess rich guys just lose touch and they just start working on niche things and nobody no it's gonna be too niche another one musically i remember we were at the office trying to build social products and morgan this guy who worked with me he was like hey my daughter loves making these lip sync videos on musically and it was actually even maybe of a different thing besides musically but this had the idea of like you record yourself on video and then there's music mixed in and you're kinda lip syncing and dancing you make the little dance videos and i was like okay cool but can we get to work now like we're trying to build the next big thing here and like you know stop distracting us with this and you know has anyone ever just like showed you a briefcase full of cash and then you like actually accidentally like kick it to the gutter that's what that's what we were doing okay so those were things that i was totally wrong about well hold let me tell you one more alex lieberman shared a dm that he got from the founder of cursor cursor is a company that in two years or something like that through to ten billion dollars and the guy emailed alex lieberman asking for advice or like what should do it left him move off yeah left him on her daughter own red hey we all missed in fact best summer has a part of their website called the anti portfolio that you ever seen this they were the first b i think that did this so they created if you go best for b p dot com slash anti dash portfolio it's basically just says honoring the companies we missed and it's just like b b apple ebay google like all the companies they had the opportunity to invest in but past for varying reasons and they just like humble themselves with this so this is like the this is the opposite of the hey let me show you your our memos of how smart we were this this is like you know the other side of the coin and it's crazy any anybody who's like worth a damn business your your anti portfolio is gonna be much bigger than your portfolio which is just a bizarre situation if you're any good if you're if for any good and you're in the game for any like decent amount of time your anti portfolio is much bigger part of us is underestimating the size of markets and the other there's many things there the other part is not understanding math because ten thousand times or one thousand times whatever that's actually that's really hard to estimate and so like to put it in really simple terms i remember working with financial my financial adviser and they there was like this line item for two hundred fifty thousand dollars in eighteen years and i was like griffin what is this man he goes well that's i just baked in like college expenses and i was like but i'm not gonna pay for all four years upfront or are you think we're gonna have triplets what's the deal here and he was like no i just took the trailing twenty year growth rate of college education and i assume that they're gonna go to like a top seventy five percent like cost school and i just applied that number to the to the future and that's just when it came out to two hundred and fifty thousand dollars a year and i was i it's just it's it's really hard to understand what like five percent growth is per year or whatever it is and a really good way to understand this though that i'm trying to like get beyond the math is i'm been really obsessed with thrive so josh kushner and one of the reasons why i'm into it is you hosted this event and we had the founder of oscar come you had mario come and i thought he was i thought he was like the most impressive smartest guy there and so like i was like go down to rabbit hole i'm like or you partnered with josh kushner and josh kushner now leading all these amazing things and josh kushner recently invested in open ai at a two and fifty billion dollar valuation which is astounding expensive that's just that number is hard to comprehend and someone was questioning josh kushner and he was like what i learned was in the real estate days you know his parents are real estate tech ty in new york city he was like i've learned that you can't really over spend on park avenue real estate so park avenue is on the upper east side that's where like the louis vuitton store the tiffany store he was like there's just been so many examples where someone said in the fanciest part in new york city that this building is way too expensive but when you buy the best typically it's never too expensive like there's always gonna be someone in ten years who wants to pay more for it so my logic is i'm gonna find the park avenue of startups so open a cursor whatever it is and i'm willing to spend what people think is it a crazy amount of money i don't care about the valuation because i just think that those will outperform those the other ones and i've been really trying to like embrace that even though it's very challenging to like actually by the this is michael sailors argument about bitcoin so his his argument about bitcoin is basically that of all the digital assets bitcoin is digital manhattan and there's only twenty one there's only twenty one million million blocks that's that's the real estate that's the land you wanna get as many of the twenty one million as you can at basically any price because this is digital manhattan and over the next hundred years that's all that's gonna matter is basically like how much of that did you own you know no shouldn't say that's all that's gonna matter but basically you don't look for the third best thing you buy manhattan right like you don't go try to figure out what's gonna be the seventh thing because it's cheaper right now like no the move is always you buy the manhattan thing and you just plan to hold over the long haul when you know it's a scarce rare asset and like that's the whole thing was crypto is like there's it's a scarce rare asset which is conceptually that is way easier to understand then one thousand x you know like because i see manhattan real i'm like yeah this is like bump is great then it goes to the next stage which is having the courage to believe that your opinion is right yeah and so like for example someone like you who's who's in the bitcoin or it was or is in the crypto industry and you do believe in it it's like if you believe believe that to be true why aren't you borrowing every dollar you can to do it and that is where courage comes to play and that's really hard to buy into this concept so i say i buy into this concept conceptually but i'm not truly acting on it at least not in not not in a hundred percent type of way there's also other factors so for example i have a very funny goal my last goal on my like you know annual goals is just just says avoid ruin because my life is great and so actually like one key thing at all times is avoid ruin like do not do extremely dangerous things take care of my health and don't make disastrous risky financial investments that like even if i believe even if i have conviction even if the upside is there i really just don't need to i just don't need to risk ruin at any given time i think the kelly criteria just do not risk ruin keep yourself in the game is always important so like you don't need to borrow every dollar even when you have conviction right there's like there's but i think that's what separates not all the best so i don't think buffet has ever like risked you know he famously has said don't risk what you have or what you don't need or something like or don't risk what you need for what you don't want or i forget exactly the quote where but it's like risk need needlessly risking things yeah but my brother john who i'm visiting in missouri he's not in into start up and he was like why do you why are you still doing this like why don't don't don't risk anything i was i really risk anything but he's like but do the really successful like the elon risk everything and i was like a lot of them i think do i think that like there are like the like ten out of ten the best of the best the crazy elon of the world i think that when they say i was sleeping on couches i think you don't really wanna believe that because their friends are billionaires or whatever yeah i been around enough of these yeah it's a really nice but i've been around enough of these like crazy crazy crazy like one percent of the one percent the freaks amongst the freaks some of them i actually do think don't avoid ruin correct i just don't think i headlines wise i don't think i don't think i think a lot of them very wise i think they're great achieve but they're not necessarily i don't think they're wise and i don't wanna do that but don't you agree with that though that like have you who helped people do definitely take it to that extreme right like there's there's levels right so like buffett actually has been very concentrated at many times i think you know recently had fifty percent of a portfolio just in apple stock right so like that's a very concentrated thing he believes in concentration but concentration is not the same thing as like you risking ruin in a way even somebody like elon you know the ruin for him is in losing his money because he's a money making machine he is a achievement machine at any given time he could've have even if he had lost at all through spacex and tesla and whatever he'd be rich again in ten years and i think he knows that deep down too right so like the risk of ruin for him might be reputation right there's a great leaked email where open ai is talking about their path forward and this is like when this is when elon eventually got like sort of kicked out slash left the project of open right he's a founder but the first forty million of dollars in but along the way they realized they need a lot more money and the leaked email basically shows the brainstorming that they were doing sam alt greg and elon and basically yuan idea was so so they all came to the realization holy shit this is like this kind of works but we need way more money like this is gonna be way more money to train these models like we're talking hundred million dollars plus just for a single training run like let alone operating the comp operating the business from operating the the the project and paying all the salaries now it's for what like servers or something like that like like literally the gpus and the compute of the electricity to train one model and then you're gonna not gonna stop there you're gonna train a better model right so once they realized shit we need a hundred million and we're a nonprofit this is not gonna really work who's gonna just elon is giving us this like are you elon are just gonna give us like billions that's probably not gonna happen but that's where this is going and so when they realized that they're like we need a way forward it so elon suggestion was let's make open a part of tesla tesla will be the commercial machine and then we'll take some of that profits as r and d and put it into open we'll fund it that way now sam greg's like that because they're like well yeah but then like you control everything and we're just kinda like a little bitch and we'd don't really love that idea so what if we and they were exploring other ideas so they had a microsoft idea which is what they ended up doing so he's like microsoft is really interested in giving us you know like you know potentially like you know multi billions of dollars and free compute but then you know we'd have to work out a deal of what's it different for microsoft and then elon basically replies being like you like lame being a part of microsoft you know that that was like in in this reply basically he's like why not tesla and then sam alt and then there was like a email that referred to sam has been exploring the idea of an ico so to do a token launch and like what if we find like it was during the crypto like heyday and they're like oh i guess like you could just raise a ton of money for khan nothing like a promise if you just do it an and elon reply is basically like i am like i am against the ico it is like i think reputation disastrous and i will not be a part of the project if you guys pursue that path like i will take my name off this project because even if that would succeed i just do not like i don't think the risk is worth it and so it's interesting right because like the guy willing to risk you know certain things all of his money but not necessarily others right like you you may not owe they're there may be other risks it's weird that not weird i mean it's just like intriguing that he thinks the ico thing it's the risk thing but not like the political thing or not like well he did to plug initially he was saying i won't endorse a candidate and i won't be donating to them that was his an initial stance because same thing it's like the michael jordan you know oh you like my opinion on this sorry no comment republicans buy too yeah and like one of the great lines in in in you know in in history and so initially elon did have that stance he got pushed over the edge you know due to the of number of factors that maybe only he can truly describe some people think it's because his companies were getting like overly regulated that he just was like we can't do spacex and tesla if there's this much regulation some you know people were basically pushing back on on you know capitalism or attacking him so like you know it's unclear what all the motivations were of why he decided to then throw his weight into it but when he did he throws all his weight into it but he initially did not wanna take that risk because it seemed you know you'd take he only take as much risk as you see necessary what what's cool about elon is once he sees it's necessary he's willing to do it whereas most people will still dill dal or hesitate to do it which is the gap that i was talking about you know yeah it's like courage is a hard thing and then i also but i also think that we under underestimate may how different the outliers are in terms of personality to the normal people and so what i mean is is you and i are live on coast we are work in a weird tech world it's pretty fringe but then there's people that are fifty times that do you do you know what i mean in terms of how strange and unique thinking they are so so for example the call brothers of stripe i'll hear like their opinion on things and i even to me i'm like wow that's just like way different that's like he's so out there in terms of how this framework or how you believe that it's just so logical and you totally buy into that that's really challenging for me to understand but imagine to someone who is right in the mean like just like of understanding how different the different people are in terms of their thinking yeah there's level there's levels to this it there's levels to everything levels to intelligence those levels to crazy there's levels to risk taking there's levels to all of that that is pretty hard to comprehend until at until you get closer and closer and closer to that edge and you realize like oh what i thought was level ten was not level ten it was seven and there's that this is what ten is right just imagine what brian johnson the extent brian johnson goes to for his health there are people who live you know thirty miles in my radius here that are doing that in just ways that they're just not publicly broadcasting at but not in just health they'll do it in finance they'll do it in their obsession over specific technology in a lifestyle choice that they make whether it's you know a poly amy lifestyle or it's a you know the extent to which they delegate extreme delegation like we were laughing when we were hanging out with this distribution he had a he had his runner outside it's like wait so you got kinda like a personal door guy that just waits around in case you need something but like yeah there's that like there's a lot of people that have these like lifestyle quirks where it's like wait you peter t when he flies to a a place has a mattress shipped that hotel so that he gets right sleep because that's his favorite mattress and he just actually some hotel store the peter teal mattress in the lobby or like in there's like storage facility in case he's gonna come because that's his demand and it's like yep there's people that do that and it's like wow i thought taking i thought taking my sleep seriously was like wearing this whoop band i guess there's levels to this right i guess there's like an infinite level number levels to this it's a honda civic versus a nascar or it's making the jv like i was telling my brother he was like he was comparing me to someone and i was like i don't think you would understand i'm one of the best on jv at a big high school and these guys are olympia like this that is the gap the the you know i think the guy from you told me this story about the red hat bass player in the celtic what's the name skeletal yeah and he was like he was like joked as being the worst nba player but he would go to like you know black top gains and just crush everyone and he was like you don't understand that i'm closer to lebron than you are to me yeah and that made that that's sort of like what we're describing here or you wanna do something else well i do i one other thing but i wanna go back to the market size thing because i have i have something that i think is a pretty sick example of this alright so there is an amazing story about this from uber so i remember when i was living in san francisco uber had like just come out i think i moved there at twenty twelve and that was like it was all pretty new then and i think uber that was such a fun era that was such a fun era wasn't it that was like you know our version of like the dot com boom right it's like mobile it was exciting and so i remember getting my i got there and my friend who lived in san francisco was like yeah here our rides here and then we got into the strangers car and i was what the hell is this it was actually a sidecar which was like the third company after uber and lyft that just died it didn't make it i remember uber started getting it like a pretty investment and it just seemed pretty crazy and it just kept getting crazy and crazy they would raise it like you know first it was tens of millions and hundreds of millions and a billions of dollars valuation and i remember reading this bill girly blog post that really changed my thinking and the blog post is called how to miss by a mile is the name of the blog post and bill girly girly was one of the early believers and early investors right yeah he's oh he's a legendary vc and now retired and he was one of the main investors in uber and like you know famously at the end like you know they ended up kicking travis out and there's you know it got it got messy at the end but he was one of the early and and biggest believers okay so basically he talks about this guy i don't know how to exactly but it's i think it's a swath dumb rob don or something like that this guy is like a he's a well known thinker on valuations he's a professor at nyu stern and he teaches like you know finance and and economics there and so he had wrote an article that said uber is not worth seventeen billion this is when uber raised at a seventeen billion dollar valuation he was right by the way uber was not worth seventeen billion it is actually ten times more than that but he was making the opposite argument he was like i think uber is vastly over over valued and bill gi sort of breaks down this argument and this totally changed my thinking and how you think about startups so what he said was he goes this professor just did this wrote this art article i wrote this blog post and it seems really well thought through and he's a very like respective expert and i know i don't i'm not saying anything about the guy but i think his analysis is wrong and he starts with he goes the funny thing about any analysis with hard numbers like this is that it gives you a false sense of security and he talks about like anyone who's in math knows the difference between precision and accuracy precision would be you know oh wow you've you've really forecasted this down to the second decimal and accuracy is like yeah but it's just wrong it's precise but wrong it's not it's not on target he was basically saying he's like he makes two arguments so he makes one argument about the tam so the total addressable market of the of the of of what uber market potential is and then market penetration so how much of of it uber will get and basically is like he goes the tam mistake is the mistake of thinking that the future will look quite like the past but the arrival of a new product or service will have a non zero impact on the overall car for higher market so he goes basically it's a new offering it's got new levels of convenience new price points which will open up new new use cases and he gives a story he goes you know once upon of time at and t paid mckinsey a million dollars to forecast how big will the cell phone market be they want at and t wanna know should we become like a cell phone maker manufacturer or like should we should we care about that market or not and the the mckinsey top you know analysts were getting paid predicted that the market in two thousand the year two thousand would be nine hundred thousand people using cell phones which was less than one percent of the actual number it was a hundred and nine billion and they were predicting twenty years out which is really freaking hard correct but it was it was look it was hard numbers so we you gave you a false sense of security and so at and t decided not to go not to invest in that area they ended up to make you know once it was once they realized they were behind the ball and you know actually cell phones were gonna be a big deal they ended up having to buy the sell company for twelve billion dollars it was like gonna say a twelve billion dollar mistake and by the way now like you know five or six billion people have cell phones it's like just absolutely ubiquitous aaron levi the founder box has this tweet he said sizing the market for a disrupt based on the incumbents market is like sizing the car industry based on how many horses there were in nineteen ten and so girl talking about this now of course you might say well is this always the case like you could always say wow the you know forget the past you're just being you're stuck in that old way of thinking that to think about the bright future and of course no that's not always true in fact it's probably usually correct that the you know the near future look like the the the near past but the funny thing about entrepreneurship or any tech investing is that it's a hits it's a hits driven game so you only need one and you can actually be wrong eight or nine times out of ten as long as you get the one right in a really really big way and that's not true in other businesses like that's not true in school you can't pass a test that way it's not true at your job you can't just like have one great day and then like have nine dud like you can't do that in private equity warren buffett famously was like in a stocks rule number one don't lose money you know vcs lose money all the time entrepreneurs get it wrong all the time that's a very distinct difference and so like and this is actually a distinct difference oftentimes in you i's personality which is buffet is predicting that the future will repeat itself and that the pass is the past won't change for the future vc investing tech investing is doing one hundred percent the opposite correct both are valid games but you have to know which both are right you have to know they're right in their games so like in the stock market that's probably the right way to think about things and value investing that's probably the right way to think about things and private equity is probably the right way to think about things in entrepreneurship we're tech investing it's absolutely the wrong way to think about things you won't make me money doing that other way and so in our business know i have this phrase which is that in our business you know the cy get to be right and the optimus get to be rich and so it's like the cy will be right and you get to be right eight out of ten times that might feel good but the optimus one who get who get rich and you have to just know that going in what are your what your employees are replied all it like sean i'm just asking if you want pizza hamburgers for lunch like like can you just tell me like just why deodorant but i a podcast i think you nailed it this is a a a great a great blog post the guy who's like the the the anti here on this like where is he now he's still there professor he's still here he's of course is because you know you know skin in the game you never really be wrong and so he that guy had estimated the global taxi market to be a hundred billion oh so anyways let me zoom it in so i remember living in san francisco and when this happened gi pointed something out which was that in san francisco the taxi market size whatever it was let's just pretend it was like a hundred and fifty million dollars uber was uber didn't just have some percent share of that market it was actually three times bigger than what the total taxi market was in san francisco it was a total like market expander of a force and you see that over and over and over again any new product that's creating new category it doesn't just eat some share of the existing category it just explodes and becomes bigger than that thing so let me kinda like fast forward to to another area that this came up so i was watching these videos from sequoia sequoia recently had an ai event and my invite must have gotten lost but i was able to catch it on youtube afterwards luckily and so i was think da mash was one of the speakers yeah yeah i know of the because again maybe my speaker invite also was lost i'm not exactly sure what happened but but it's all it's all love amongst amongst me and sequoia so the very first speaker this guy i think it's pat grady he's a partner of sequoia and he has a slide on the screen i'm gonna show you this slide it's maybe a top five ugly slide like this might be the worst slide i've ever seen in my life like not only is it ugly it doesn't even make any he's eligible like you look at it doesn't even mean anything but he explains it so okay so check out this slide do you see this thing right here yes so like i remember taking the act where it was like showed you like three shapes or three numbers and you'd had to the fourth one based off of the pattern i cannot do this with this okay exactly so if you look at this slide it basically is like a bunch of pie charts but the pie charts have no annotations just random numbers and then there's arrow and there's a question mark and it just so wide at the top alright so let me explain what this is because it's actually kind of insightful so what are you saying was basically like if you look at the the let's say the three most recent waves of of like tech so you had software which was like i buy cds i put i put the cd rom inside by cd or i install software on my server at our office that was like software one point o and then two point o was like the cloud i was like oh the software just lives in the cloud it's a saas it's a service you just kinda like use what you need don't need the servers and into the cds and he's like now we have ai and so he talks about like basically the software market at the time when cloud came out when like salesforce came out the entire software market was three hundred and fifty billion dollars of revenue cloud is already four hundred billion right like like just just like the top cloud players are like more than four hundred billion so basically it's like cloud didn't just take some percent share of the software market it was like oh yeah maybe like ten percent of these applications will now go to cloud or become saas it was like saas became bigger than the entire software market before that and it it became bigger by i think i don't know why the numbers here are like like again the pie is very confusing but it's basically some order like it was like you know two or three times bigger and then he's talking about like ai and he's like ai actually is interesting because ai replaces software but ai also replaces labor like you just you don't need people to do those tasks it's it's services and software and so he's like this the labor market is basically like whatever like ten trillion this is some some ridiculous number and he's like we don't even know how big the market's is gonna be predicting that with any accuracy would be foolish but it's probably a good bet that ai is gonna be bigger than the entire cloud market today and the labor market in the future and so how does the light moves the isn't isn't the labor market like the market yeah yeah it's like the main know what i mean like like isn't that everything ever yeah kind of and so you know in the same way that when girly was talking about uber he's like you know it's gonna be bigger than taxis because it's more convenient than taxis right if you called the taxi you didn't know when it was gonna pick you up you don't know if it was gonna pick you up with you got precise you know you precise timing it'll pick you up anywhere before taxis didn't really go to rural areas uber had more drivers so it was you're available everywhere because it was available everywhere you you got lower price points because it was more liquidity in the system so when it's a lower price point maybe i wouldn't have called a taxi just to go from here to my friend's house but if it's a eight dollar uber i'll actually do it and because you get the price points now you get new use cases so like people use uber to like help their elderly parents travel or kids or like and the big one was basically he's like the big use case i think people are missing is that some people just won't buy a car because they'll be like i'll uber when i need it so i just don't need to own a car which is exactly what happened to me i sold my car in san francisco because i was like why would i deal with this car parking issues getting get broke into insurance gas all that like no i'll just uber one i need to ride and so he's like it unlocked part of the rental rental car market it unlocked part of the car ownership market and once you calculate those you're like oh shit this is a trillion dollar market not a hundred billion dollar market and so you're off by you know ten x if you had done the calculation wrong with the wrong assumption and so ai is gonna do the same thing because i won't hire a person to do these little things that i'm i'm basically like telling ai agents to do in my life right like you know i'll build little i build a little app for piano tracking for my piano practice or for my health tracking or i'll you know i don't hire concierge doctor but i'll feed my lab results to chat chat and i'll pay them to like i'll pay it to analyze all my blood results and so things i wouldn't have otherwise hire people for i'm willing to pay ai a little bit for it and so there's a new market how many hours a week are you consuming information on just staying in the know on this topic on ai specifically yeah we had gray guys and brick on the pod and he was telling me things where i was like i was almost i i found myself having fear i had fear of like oh this is clearly the future and if i'm not like in the know of this it's gonna come and destroy me therefore i owe it like that's how serious it it wasn't like i'm missing out an opportunity to make my business better i'm missing on them it was like oh no i gotta protect my family like and like this is like my job and so i felt extreme fear over he was saying like magnus have you heard of magnus is that like the new chinese yeah like agent platform yeah yeah yeah in the new just like things like man man and he was explain but he's like three things where i'm like how do i not know about this yeah like do i do to sign up to like an ai trade magazine like what's going on right and his answer was horrible when i said greg how do i how do you know he's like i just do or he said something like that or he's just like i just hear about it like i was like well that's like extremely not actionable for me thanks a lot dick so how are you which time are you spending learning about this topic and where are you turning to look there's two minds about it one i would say i have no risk of over investing my time in this i have pretty big risk of under investing my time in this but no risk of over investing my time in paying attention to what's going on with ai and being able to like play with the tools understand what the companies are doing like really think through like where this puck is going at the same time i'm not trying to drive myself insane so you know like i do think there's a very unproductive version of this which is the constant whiplash of new demo new model new this new that new whatever it's so what i'm doing is basically like an intermittent and fasting style model where it's like i mostly not paying attention to it as in like i know i'm not actively trying to like react to everything i see or go seek out or go read every single thing out there or go try sign up for every single tool what i'm doing is i'm trying to make it very useful for so when i have a problem i now added into my like sort of solution list like oh do i think ai could solve this so then whatever research i'm doing it's actually like a just in time solution to a problem i actually have versus just like the kinda like intellectual jacking off of like just keeping up with just like trying everything just wanting to know everything watching every podcast listen to every youtube video it's like no i'm mostly trying to like if i have a problem i trying to see could i solve this day maybe yes maybe no but that's interesting i learned a little bit each time i do that but at least i'm trying to solve a problem i have the second thing is i am carving out free time so like last year i i think i told you what it does i did like a ai hack week a think week right i this space i'd clear my calendar the only thing i'm this week is just going in depth and the beauty of that is it's kinda like checking your email you're like if you want you could check your email every three minutes and you might find a new email but you'll just consist up like it'll just keep tearing your attention away whereas if you just batch your email and you just check your email once at noon and once at you know eight pm or something like that you're totally up to date on email but you didn't have to like have this nervous energy just constantly doing it and so i'm treating it more like that i agree with you it was nice to catch up with you i'm getting all pumped about all the stuff i i'm currently in saint louis missouri i'm about to go to the zoo so i'm can i'm gonna go to the zoo i'm gonna go see some family tonight but i was happy i was able to do his podcast from this hotel and potentially reach hundreds of millions or hundreds of or rather hundreds of thousands of people and hundreds of millions of red blood cells what are what are we counting here well because like you just started talking about this ai stuff and i'm like literally staring out the window right now like whenever you talk about this shit i i have no pads here and i like get flustered where i'm like like i sometimes i think and i'm like what should say next but then all times i'm like i'll talking about this ai shit like what i gonna do what i gotta do this thing i gotta do that like that's how i feel right now yeah yeah i i definitely feel that by the way i have a couple of of things i forgot to say on the the uber thing there great this is the funniest part of the uber thing at the end of that professors blog post you'd know what he wrote after you wrote this huge like valuation tear out of uber he goes as i attempt to attach value uber i have to confess i just downloaded that but have not used it yet i spent most of my life in in the suburbs where i go for days without seeing a taxi or if i'm in new york i just use the subway and so it's like the experts who are literally like not only are they're not betting on this not i'm skin of the game literally never even used the product just send it with like ps but what the fuck do i know like that would have saved from a lot of a lot of like reputation there of like but were some great by the way from from i'm ceos who underestimated their market size so jan k ceo what whatsapp he said we're just trying to make messaging better not build some big business sells for twenty billion somebody said i thought i'd make a little side money and have to quit my job that's terribly founder of spain oh terribly was so you know female billionaire you know one of the like a first female billionaire entrepreneurs of of this like generation mobile gaming so one of the first mobile games ever was snake on no on the nokia phones if you remember so the head of nokia nokia is mobile gaming division so this guy is in charge of mobile gaming here's what we said i think mob mobile games are just a small add on it's not a real market mobile gaming turns out to be hundred twenty billion dollar market here's another one the domino's ceo in twenty ten the year i graduated from college he said delivery is a convenience it's not a game changer at the time delivery was a ten billion dollars a year across food delivery it's now you know more than ten times that it's more than fifteen times that in fact i read a crazy stat that some some i don't know if this is legit but some study came out or that somebody was doing some an analysis and they said that for most local restaurants now seventy percent of their order volume is delivery orders they're no longer restaurants that do delivery they're delivery machines that also happen to have a restaurant table you know like a table to sit down if you i go to restaurants all the time where i feel like i'm the only person there and drivers are coming in and not the whole time yeah brian s we didn't know the size of the market because we were inventing it if we listened to market research we would have just made a better couch surfing app and the last one is elon i don't care about the market size i care about if we can make something fundamentally different because if you make something great the market will come it is sick this this this was like a little impromptu topic that entered into a whole thing that was awesome i feel like i could rule world i know i could be what i want to put at all in it like a days off on a goal travel never looking back