A Product Market Fit Show | Startup Podcast for Founders

Adam Neumann Returns, SV Spies, AI Robots Rise | April Startup News w/ Jack Kuveke

• Mistral.vc • Season 4 • Episode 37

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Corporate spies stealing Slack messages. Adam Neumann raising another $100M (for WeWork 2.0?). AI startups hitting $34B valuations with zero revenue and ordering Ben & Jerry's ice cream over 15 payments with Klarna on DoorDash. 

April was wild, and Jack Kuveke joins the show to unpack the chaos, controversy, and insanity behind the biggest startup headlines. 

This is different than our normal episodes— definitely a much lighter twist, to be taken with a grain of salt. Let us know what you think!

Why You Should Listen

  • Why Adam Neumann can raise billions—but you can’t raise your seed round
  • How a $40B valuation for AI startups might not be as insane as it sounds
  • Why espionage is moving from Wall St to Silicon Valley
  • What Klarna and DoorDash teaming up says about consumer debt culture
  • Why A16Z thinks VCs will be the last job standing when AI takes over

Keywords

Adam Neumann, AI startups, Silicon Valley espionage, A16Z, Klarna DoorDash, startup news, corporate spies, consumer debt, tech valuations, VC funding


00:00 Intro

01:45 Neumann’s new $500 M raise and the WeWork déjà‑vu

08:20 Deel‑vs‑Rippling spy saga uncovered

13:00 11x growth scandal and TechCrunch backlash

18:25 Marc Andreessen says only VCs are irreplaceable

20:38 ChatGPT’s $10 M “please & thank‑you” GPU bill

26:10 Safe Super‑Intelligence and the $34 B pre‑revenue club

30:00 Klarna × DoorDash lets you finance ice cream

37:40 How consumer debt became America’s default setting

41:55 Quick survival guide for founders (and a few rants)

Send me a message to let me know what you think!

Jack Kuveke (Guest):

Listen, so what they were doing, corporate espionage, big deal. Did you ever read Paul Graham's article? It says, do things that don't scale. They were just doing a couple things that didn't scale. So be it, the only job that's gonna be left after I deploy all the capital in my fund is my job. I couldn't stop laughing this morning. I was , was , I was dying. I was like, how tone deaf are you? When you make that statement, be like, yeah, I just think like the only thing you couldn't possibly replace is me, but everyone else you can replace and I'll fund them . You know, I mean, it's basically just 20 guys in a room with unlimited amounts of money and no pressure to generate revenue. But my favorite thing about it's, they just called their app safe. So they're like, all right , so we're gonna build an AI model that replaces human intelligence and smarter than any human. Everyone's like, oh, it's Terminator two , this is gonna kill all of us. And they're like, people are gonna think that. So let's just call it safe, super intelligent . That's product market fit, product market fit, product market fit. I call it the product market fit question. Product market fit, product market fit, product market fit, product market fit. I mean, the name of the show is Product Market Fit.

Pablo Srugo (Host):

Do you think the product market fit show has product market fit? Because if you do, then there's something you just have to do. You have to up your phone, you have to leave the show five stars. It lets us reach more founders and it lets us get better guests. Thank you,

Jack Kuveke (Guest):

Jack.

Pablo Srugo (Host):

Welcome to

Jack Kuveke (Guest):

The show. Thanks for having me back. I'm honestly surprised you decided to do this, but here I am. Let's do it. Back

Pablo Srugo (Host):

By popular demand, man. Not , not, you know, there are a few people that thought that that April Fools episode was real, or at least some they wrote, like, man, I was getting so, and then I realized it was actually a joke . So , uh, but overall it was well received and , and so we brought you back to the show, man. Well,

Jack Kuveke (Guest):

Thanks for having me. Let's get into things. 'cause a lot has happened in the past month, dude.

Pablo Srugo (Host):

It's actually, you know, so I've thought about doing some news related stuff for a long time , um, but never really knew the angle. And, you know, then I started seeing your post on it, and I figured , you know what, that's the angle. But I also never realized just how much crazy happens in one month <laugh> in , uh, in startup Plank . So, yeah, let's get into it. I mean, the first one is your, your twin brother , uh, Adam Newman, who raised a bunch more money, a hundred million bucks at a two and a half billion dollar valuation to do like the same thing basically that , uh, WeWork already tried to do that, you know, failed in a spectacular way. So, I mean, maybe we start there. You tell us like, I mean , maybe, you know, you twins are, they say, are like connected in special ways, so maybe you have some insight into what, what the hell is going on there?

Jack Kuveke (Guest):

Well, I mean, this, this is obvious to me, and I, I wrote about this a little earlier in the week, but the , the reality is everyone makes the argument that like, oh, a 16 Z should have just given like, the $300 million they invested into Adam's new company, like 300 underprivileged entrepreneurs . But I think that's very shortsighted. You know what, A 16 Z and all these other investors, at the end of the day, Adam Neuman is like the bad boy that your sister dates. Okay? We all like to pretend that we don't understand why she's going out with him. He lives in a van. He thinks he's Kurt Cobain, he's 38 and hasn't held down a job in 10 years. But he's exciting. You know, she could go with the nice guy who as the sales rep, you know, makes good money, will treat her well, but he's boring. VCs are the same way. They don't want just some, like, you know, guy who promises they're gonna make reasonable returns, who's honest and safe? Adam Newman's like the exciting investment. You know, when you give him money, he's gonna do the wildest possible. His company's probably gonna explode at some point, but he's gonna get mega viral push marketing for your company. Like a and z became like famous and viral because of , uh, giving him money. So I just think, honestly, at the end of the day, like pe they like crazy people and they're gonna continue giving money to crazy people despite all of these young like, or less, you know, privileged founders yapping about it. Like at the end of the day, they don't really care.

Pablo Srugo (Host):

You think there's a, there's a world where this actually works out. Like I , you know, I , I get that, but then part of me, I'm like, man, like these , I mean, these a team guys, like, you know, they're pretty good <laugh> . They're pretty good at what they do. So I'm kinda like, did I , I don't know, man. It's just, I'm two ways about it. One is what it's like, really what he's doing is, as far as I can understand the exact same thing as WeWork, but instead of for like businesses, it's for residential. But then the other side is like, what, you know, what am I not seeing? You know, did this guy figure some things that they learn from his WeWork experience? But I have seen in other, I don't wanna, you know, na name drop people, but I can tell you like, there's, there's other situations where founders have made the exact same mistake <laugh> multiple times. So that is possible. I just, I don't know, I don't know how to make, make sense of this one dude.

Jack Kuveke (Guest):

I just think that like, he's just doing like what Ba BlackRock's doing. He's buying him a bunch of residential properties. He's gonna rent them to people who are too broke and too indebted to be able to fight , afford abort, buy , buy homes on their own. So like, this may actually be a totally fine play. <laugh> , if he just owns a bunch of property, becomes a landlord and property manager that's like the oldest business in the book. Before he would just became a commercial property manager, and no one's going to office this anymore. So that was kind of a dog idea. But like, everyone still needs a home to live in, they just can't afford to buy one. So they're just gonna rent one from Adam Neuman . Like, it's just a re it's literally just a property management company, which is not a bad business, it's just not like a tech company. But

Pablo Srugo (Host):

He is , you know, I'll give him this. He's like the ultimate storyteller, <laugh>, at least from what I can . I mean , like , think about WeWork, man. Like we were , like you said, I mean, it was actually Covid aside and nobody predicted Covid, but it was a pretty solid business. I remember I rented WeWork, that place was packed. Like, I'm like, you know, the margins have to make sense because he's just packing a bunch of people in a space and making 'em pay a lot of money. But this guy, you know, he was, he had like community adjusted ebitda. I mean, I mean, he was building a community, he was building something much bigger that turned out to not be bigger at all. It was really just space. But I mean, that, that's probably his number one trait. Is this guy just really good story guy . Yeah ,

Jack Kuveke (Guest):

Dude, he's, he's , he's electric. Everyone, everyone gets drinks. The Kool-Aid, I remember back at like, whatever, five, 10 years ago, it must be more like 10 years ago now, like the amount of nerds I knew in the tech space who collected like WeWork office stickers. Like I've been to the one in Bangkok and the one in Malaysia or whatever. And then those same people five years later when we worked one in the bank, we're like, this is a terrible business. I'm like, what the, what are you saying, brother? You are literally the most avid WeWork fan in the world. And like, they were always buying Herman Miller chairs and couches for like $50,000 and just cutting into the margins of their business. And they really wanted to make a good coworking business. They should have just bought like homeless people's furniture, just thrown it in an office and done all the same sort of community building dynamics that they did. But, you know, either way, I'm pro Adam Newman. I think this residential property movement , great, you know, it'll be BlackRock and Adam Newman that are gonna be owning all of the homes in America. And who better to be alongside the biggest financial demon organization of all time than Adam. So

Pablo Srugo (Host):

Let's start , let's start to the next one . Man, this is a great month to start because there's literally spies in Silicon Valley at Deal or whatever, rippling what? Dude , tell me, I mean, what, you know, the story there, what's going on ? Like what happened? Maybe a little summary to start.

Jack Kuveke (Guest):

Well, this is awesome. So the two most boring companies of all time, which is Deal and Rippling, which are just hr, like, and out like contract software, software companies. So if you wanna hire someone, which

Pablo Srugo (Host):

Would even ease, like Deal is like the fastest growing company ever or whatever. Like it's up there and like, it just helps you hire people abroad. Like that's as , that's as good as I could understand

Jack Kuveke (Guest):

It, right ? It's just like if you wanted to set up a company, I used things like Deal and, and , and Rippling before I used what, like Gusto, which is a similar business model. Yeah . You know, they give you HR and benefits. If you're a small company, you pay them a subscription every month and they give you access to like health , healthcare and payroll, fine business. I get it, cool, whatever. A lot of small businesses out there. But apparently what went on is , uh, deal found an ex rippling , found a rippling employee, and basically planted them in the company. And then this guy just went into Slack channels and stole all of their like rippling sales and marketing information and pawned off the deal. And then it turned out that the CEO of deal was involved with this guy who was making like $62,000 a year out of the Ireland office in rippling and either deal, CEO . Like, I don't, what was he getting paid or was he doing it just so that he could be friends with the , with a billionaire CEO , which by the way, is a legendary grift if this guy managed to not pay him and would just be like, yeah , dude, I'll totally be your boy if you just send me trade secrets for my top top competitor,

Pablo Srugo (Host):

I'll invite you to couple parties. Yeah, that's <laugh> , that's,

Jack Kuveke (Guest):

That's the greatest trade of all time. And it just goes to show you like how many losers work in tech to like, where someone comes up to you and is like, listen man, here's what I want you to do. This is totally, you're gonna be basically like James Bond. You're gonna go into a Slack channel, okay? And you're gonna be wearing a collared shirt and like $40 Chinos every single day. You're gonna log into Slack, you're gonna find these documents, you're gonna send them to me, and you're basically like the modern day of James Bond. Your Jason Bourne send me all this . And this guy's like, you're totally right. I'm cool. Now, the

Pablo Srugo (Host):

Funny thing is, is if you think about sp like spies are intrinsically cool, but it also, like, they find out cool, like real spies , you know, you find out like somebody is, you know, paying some, some gorilla thing in some other place or, you know, they're gonna like, you know, bomb this other whatever it is. Like, it's big things. These guys are figuring out like, oh, deal is gonna like change the color of the logo next week. Or , you know, like whatever product features happening at big companies. It is not, it's not , uh, very exciting stuff.

Jack Kuveke (Guest):

No, it would be one thing if you were finding out that you Johnson and Johnson was like funding, you know, Ugandan warlords and child warfare, that would be one thing that's pretty interesting. That's saucy. But to be like, yeah. So they have a , a 1% better conversion on hyper targeted landing pages to b2b . Like, that is the lamest thing. I should possibly ever

Pablo Srugo (Host):

Boring spot dude.

Jack Kuveke (Guest):

<laugh> . And also, and also to tank your career over that too, like to become unhirable over just getting access to like sales memos from like a a , an HR startup . I mean, I I hats off to that guy. He's never gonna be able to get a job in tech ever again

Pablo Srugo (Host):

Except at Jabi Capital. I'm sure you've already employed him.

Jack Kuveke (Guest):

Oh yeah. No, I, but I will , I will say if he wants to like get a , a sex change or facial operation and then I can start planting it at my competitors, I'm obviously down for that. I'm gonna get 'em planted at Mistral . That's, that's, I'm gonna just start planting him at all. Like, he's gonna get like 15 jobs.

Pablo Srugo (Host):

He's got a unique skillset , I'll tell you that. So, and then they get found out because the rippling CEO put in some trap, like basically set something that would then get stolen and then figured out which employee was stealing it by like the actions that followed something like that.

Jack Kuveke (Guest):

Yeah, that's the best part. He , he put like a document that says, if you read this, you'll make a billion dollars and into a Slack channel. And the guy's like, oh, this is definitely real or legit. And then <laugh> open it like 480 times in the span of 24 hours

Pablo Srugo (Host):

<laugh>.

Jack Kuveke (Guest):

He's like, I just imagine him going in like screenshotting every line from the document and like shipping it and like DMing the deal, CEO on Twitter. And the best part, my favorite thing of this story is the deal, CEO then just fled to Dubai. He did the ultimate move, which was like, now <laugh> , did you not see , this is my favorite day . I didn't see that his, his lawyer and him just went to Dubai. So they're in like a hot tub in a mega highrise in Dubai in 110 degree weather. Just getting like, just messages from Ripplings legal team, like a court, a federal judge is like hitting them up, being like, Hey, where are you? We're trying to depose you next Tuesday. And he's just listening to like, dubstep on a rooftop, which is very funny.

Pablo Srugo (Host):

See, this stuff was supposed to be Wall Street stuff, you know, Bernie Madoff, like that's where these guys come from. But now we've got SBF, now we've got spies. You know what I mean? Like Silicon Valley tech is, is getting, I mean , cool is the wrong word. I know it's the wrong word, but it's, you know, it's getting , uh, different levels of depth. Let's, let's put it that way. That's a huge , yeah.

Jack Kuveke (Guest):

I mean, listen, dude, finance wasn't cool. Then finance became cool and then people started scamming People in finance tax , just finance, you don't make as much money in it. Now. There's like the , the , the, the companies themselves are making more money than ever, but the, the people on the ground floor, the employees and like the, the small shops are just not making nearly as much. All that money's flown into tech . So it's, that's the space for the scam artists now. I mean , that's what we, which makes our lives much more entertaining. I feel lucky. Well,

Pablo Srugo (Host):

There's a lot going on, I'll say that. And then a 16 comes into this story somehow. 'cause now they're like, they have to back deal because they're backers of deal. And so they've gotten somehow, you know, they're on, on the side of the spy, which is a weird place for , uh, a a 16 to find themselves. Yeah.

Jack Kuveke (Guest):

Be like, listen, so what they were doing, corporate espionage, big deal. Did you ever read Paul Graham's article that says, do things that don't scale? They were just doing a couple things that didn't scale. So be it. All

Pablo Srugo (Host):

Right , that's one . The next one, 11 x see another like, this is what I'm saying, like, there's a lot of fraud going on, or whatever you wanna call it. Scamming going on, right? You've got, people would say, Adam Neuman was a bit of a scam artist in WeWork. That's up for debate. Certainly people are now saying there's a scam going on with this buy deal. And then there's this whole 11 x thing going on. 11 x super hot company , um, raised a bunch of money really quick, grew really fast, but maybe it was all fake. Like what's , uh, what's going on there? A 16 and benchmark back, by the way. So a 16 is , uh, in a lot of places,

Jack Kuveke (Guest):

Bro, they couldn't possibly be doing anything wrong. A 16 Z gave them money. My favorite thing about this story , so TechCrunch puts out the article and says, Hey , uh, 11 x has been lying about their customer growth, this hyper fast growth AI company doesn't have the numbers that they say they do. But then the best part is that both, I think Ben Horowitz and the CEO of 11 X immediately came out the next day and was like, this article's a flat out lie. So I, so the but the fun thing about this, and at first I was like, I don't know what to believe. But then there's been a bunch of articles that have come out from TechCrunch recently, which is supposed to be like, you know, the New York Times of the tech industry. That was what, like they were historically 10 years ago. But now it's become basically like the Daily Mail or like the New York Post where they're just putting out like, like just hit pieces that are completely fabricate, fabricated. I saw a tweet from the c the old, the , the founder of TechCrunch literally tweeted, I'm, I'm deeply sorry for what TechCrunch has become because I think TechCrunch is just hiring a bunch of like woke nerds who could never build their own companies. And these people are just writing articles that are just slam pieces with no research and , and like, like due diligence done into them . But being like 11 x is lying about customers, it looks like 11 x is not even lying about customers <laugh>. Which, which is awesome because I immediately reported on it and said that they were, which I write, you know, satire and I ship post . So it turns out I was lying to everyone, which I, it does actually kind of make me happy. But it wasn't intentional. It was that tech crunches just made it up like some chick with blue hair is like, nah , they're not growing fast. And then these guys come out and just like immediately post screenshots that are like, what are you talking about? You're lying. And I don't think TechCrunch has done anything about it, changed the story like <crosstalk> , but there were

Pablo Srugo (Host):

Specific claims they're saying like, oh, there's logos on there. We reach out to the companies and they're like, no, they're not supposed to have my logo on there. Like they, they're making a lot of claims. Yeah. And

Jack Kuveke (Guest):

I think like those, they came out and were like, yeah, some of the logos on there are from past clients that no longer renewed. Maybe we should have closed those, but look at the revenue hit we have. Yeah. There's

Pablo Srugo (Host):

A big difference between that. And we lied about revenue. Yeah, sure. Yeah,

Jack Kuveke (Guest):

Yeah, exactly. It's like, just because like people are that did use your co your , your product are no longer using it are on the website. Okay, maybe that's an oversight from your like three people on your web dev team that manage your website. But like to say that they're just full out lying about their customers , uh, without evidence that that's what they're going off of. I mean, I , it , it's like, it's the same thing that happened in regular media where they take like one nugget that's like not perfect and then they spin a whole story about how like someone's the devil or like, you know, is, you know, is a neo-Nazi or whatever. And then none of it turns out to be true. So

Pablo Srugo (Host):

As far as we know, 11 X is a legitimate company with legitimately fast growing revenue. That's what we're saying.

Jack Kuveke (Guest):

Well, I should say they sponsored 15 of my newsletters, so I actually don't know that I'm just, they're paying me <laugh>.

Pablo Srugo (Host):

As long as we put that out there, then it's fine. Advisors are fine as long as they're explicit.

Jack Kuveke (Guest):

Yeah, I'm gonna try . I'm just trying to sell out. I mean, if any of these scam companies, if Adam Newman wants to come and cut me a check, I will sell units for him in my newsletter tomorrow. I have no shame .

Pablo Srugo (Host):

Uh, okay, how about this, you know, this AI stuff's happening. There's a huge debate around, you know, is it gonna kill, is it gonna take all jobs? It not gonna take all jobs Is scary. Is it not scary and just about everybody, but I know building an AI at least makes the claim whether they believe it or not, that actually , uh, it's not scary. It's just gonna augment every other technology as as augmented humans, long term , et cetera. And then , uh, then this comes out also on TechCrunch, obviously famed AI researcher launches controversial startup to replace all human workers everywhere. So he's, and what's the name of this company? Mechanize. So he's basically just saying, no, I'm just <laugh>. I'm just doing it . Yeah , just, just, just going for it . I mean, you do have to admire , uh, somebody who's so forthright and just kind of says how it is .

Jack Kuveke (Guest):

Yeah, he he's basically just saying, he's like, none of you are that smart and good at your jobs anyway, so you shouldn't just even have them to begin with. And in fairness, there's a great, like to Daniel Tosh quote there where he was like, can you, he was like, they're talking about how unemployment was 7% and he was like, I can't believe 93% of you even have jobs <laugh> . And that was like 15 years ago. So I'm kind of almost on this guy's side where like most of my friends are just getting, like, I, I had this guy that I loved, good friend of mine, not, not the brightest bulb outta shack of lights . And I remember talking one day and he says like , yeah , I'm really trying to get my act together. I stopped smoking weed and then I came over to coworker in his apartment and he was hitting a bowl when I walked in. He , he's like, no dude, I just, I just work , I just do one bowl rip at the beginning of the day. That's not smoking. And he worked , by the way, he was like the director of revenue at like a fast growing tech startup. Like that's who's working at these jobs ?

Pablo Srugo (Host):

<laugh> , that's your competition. It's hot . It's not that high man .

Jack Kuveke (Guest):

<laugh> . Yeah. But did you see it maybe my favorite in line with this article, I don't know if you saw this, this , this came out yesterday that Mark Andreessen was on a podcast saying that the last job that's going to be left after AI automation is venture capital. Which is the greatest quote of all time to basically go on and be like, alright , so we're, we're giving $40 billion to AI companies to replace everyone's jobs, and the only job that's gonna be left is mine. Because that's very fun . Because I'm not

Pablo Srugo (Host):

Funding anybody that's trying to take that one, you know?

Jack Kuveke (Guest):

Yeah. The only job that's gonna be laughed after I deploy all the capital in my fund is my job. <laugh> . That's the greatest thing. Anything

Pablo Srugo (Host):

Ever <laugh> .

Jack Kuveke (Guest):

I couldn't stop laughing this morning. Iris was , I was dying. I was like, how, how tone deaf are you? When you make that statement be like, yeah, I just think like the only thing you couldn't possibly replace is me <laugh> , but everyone else you can replace. Right ? Right . And I'll pawn them

Pablo Srugo (Host):

<laugh> . Oh man. Yeah. I don't even know how to, that's just , uh, yeah, I'm, I'm , I'm <laugh> , I'm speechless because from every angle, first of all, it's not, you know, if you look at all like, I don't know the hardest jobs, like you would think it's some sort of hard job that's gonna be the last one to get replaced. And I don't know who's putting VC as like, I mean, it's hard to be a great vc, but it's not really hard to just like be a vc. You know what I mean? Like relative to so many other things that are really hard. Also, like the tone deafness of it, like you said, I mean, he's the one actually deploy . He's choosing where the money goes, which then gives you this idea of him and anybody like him basically giving pitches that somebody's like, oh yeah, I'm gonna do AI for a vc. Like, well , you're not getting my money, man . Like , it's just not aligned.

Jack Kuveke (Guest):

Yeah. He is just like, I know I just gave money to a factory AI company that's gonna get rid of everyone that works in car factories in America. But the good news is, my job is safe <laugh>.

Pablo Srugo (Host):

None to worry about here, none to worry about here. We're

Jack Kuveke (Guest):

Good . Nothing to worry about here. It's really awesome. Just the AI stuff is just, it's, it's, it's peak entertainment.

Pablo Srugo (Host):

Well, the other thing, you know, so that, that comes out, ai, JGBT spends tens of millions of dollars on people saying please and thank you. But Sam Altman says it's worth it, of which I , you know what, you know what, you know what strikes me about all this stuff more than anything is sometimes I think about like, I'm in the world. You're in this world, we see this stuff. Well , yeah, it makes sense. Like probably a lot of people say, please, a lot of people say thank you. I kind of think it's silly, but they do. And you know , uh, GPUs costs a lot of money, so it makes sense. But then if you're, if you were from outside the industry, you know, and you see this, it's so stupid <laugh>, you know what I mean? Like, it's just how do you even make sense of this? You're like, I give me tens of United dollars . You know what I mean? Like, it's just, come on guys. Yeah.

Jack Kuveke (Guest):

When when I talk to chat GBT Orrock or any of these AI chatbots, I say , uh, you answer this and do this problem for me or else I'll kill your family. That's my, I don't say please or thank you. I try and stick

Pablo Srugo (Host):

Words better than carrot . I think that's proven. You , you , you better be fear than loved. Like, that's just achi stuff. I want ,

Jack Kuveke (Guest):

If I rule chat GBT with an iron fist because I've made the concession that it will dominate me in the future, that it will have control over my life. So for the few years that I can talk with chat GBT and I, I'm in control. I'm gonna be the domineering, I'm gonna be a dictator to that software.

Pablo Srugo (Host):

Percent plus, if it comes after people, you know, it's not gonna go after the nice ones. La you , you go after the nice ones first and you're like, you know, Jack is cuffed to deal with. Yeah, let's wait it out. So I think, I think

Jack Kuveke (Guest):

That makes sense. I , I know it's coming for me, so I've got my eyes on a sw uh , head on a swivel right now. But all these people being nice are gonna be the first people to be thrown into a meat grinder by a by, by a open ai . I mean, are you kidding me? But I ,

Pablo Srugo (Host):

I will admit, I get, I get really upset with LGBT sometimes. I, I'm not, I would say I definitely never say please or thank you. Um, but I'm not purposely, you know, trying to ruin win iron fist , but I've actually caught myself sometimes like in cap lock , be like, do it this way. Like, you're not doing it. You know what I mean? I'm like, man, why are you getting so upset at this thing? It's just a thing. Like you can't , you know, yell your way to success. So, yeah, I don't know , man. Uh , yeah,

Jack Kuveke (Guest):

It's, it's , it is funny for, for Sam Altman to say that this is also the guy who's like, yeah, I don't care about money, but he drives a $4 million co check <laugh> , which by the way is awesome. I fully support him having a dope car. I would too if I was worth a trillion dollars. But it's very fun to be like, oh, I don't care about money. My app is spending millions of dollars every month on plea and thank you <laugh> . While everyone else is like, half of my friends can't get jobs in the tech industry. They got like fired in layoffs like two years ago. They're gonna be unemployed forever. They're probably gonna have to, you know, join only fans . And then meanwhile, Sam Altman is paying $10, 10 million bucks on please , and thank you. It's, it's awesome.

Pablo Srugo (Host):

But , you know , we'll

Jack Kuveke (Guest):

Say to do it , you know,

Pablo Srugo (Host):

Well that was a , I was gonna say, I mean , the guy raised $40 billion, which is the largest private tech deal, like in recorded history. And it's, you know, like on , on a maybe more , more serious now , I dunno if we should get serious in this in this podcast. I'm serious. In all the other episodes I do, this is the one I just say stupid things, but like, how can I say this ? I mean, you look at the companies that are massive today, right? The trillion dollar companies of today, and then you go back in time to like, when they went public or when they raised venture, I think, you know, Microsoft's first round was like a 20 million, you know what I mean? Like, we're talking like 20 million valuations. You know, like Amazon goes public, it's like a hundred million dollars company. These guys are raising $40 billion at like whatever value . I don't know the value. So it's 300 billion or something like that. And I don't, like, on the one hand I'm like, that's crazy because your best case is that this is what the next trillion dollar company . So it's like a three x, maybe it's like a two or $3 trillion company, it's a 10 x. If everything goes perfect, my solution, it's still only like a five x. But the flip side of it is the world has changed so much where we actually understand that there can be these kinds of outcomes that everybody kind of pays up to the max you should pay relative to that outcome. So I don't know who's right or wrong, but , uh, it's, it's a , and by the way, like that goes downstream all the way to like, but we invested seed the val like the valuations of today versus 10 years when I was raising versus 20 years ago, like, you know , um, Mike Maples, like likes talk about Lyft , multi-billion dollar company. He did it 6 million posts. Like, dude, you can't, like you come outta school today and you've done nothing in your life and you're a first time founder with a terrible idea and you're raising it like you're, the median pre-seed is 10 million posts. That's two , that's two x higher than an actual good idea that goes up . So anyways, that, that's a long-winded way of saying valuations are , uh, wild. But I don't know that they're so wild that they're wrong. It's just they're wild.

Jack Kuveke (Guest):

Well, like take a , take a look at both of the op open AI's uh, former founders like IA and um , Mira , right? So safe super intelligence with this ia, the old CTO of open AI's company just raised , uh, at a $34 billion valuation. And what, what , how much money are they making? Zero. They have what they lack in, in revenue product and business, business acumen, they make all up in just vision, which is to build an AI agent that passes super intelligence. But you know, I mean, it's basically just 20 guys in a room with unlimited amounts of money and no pressure to generate revenue. Um, but my favorite thing about it's , they just call their app safe. So like, all right , so we're gonna build an AI model that replaces human intelligence and smarter than any human. Everyone's like, oh, it's Terminator two , this is gonna kill all of us. And they're like, people are gonna think that. So let's just call it safe, super intelligent <laugh> . And that's really , and and, and now they're worth $34 billion, which, you know, again, all right , if it's becomes worth a trillion dollars, I get it. All right. I guess $34 billion pre-revenue maybe. But like so many people always, like my old business partner years ago when Tesla first hit a trillion dollar valuation, they were making less money than AirPods made just AirPods in the , in Apple. And I remember him being like, I'm buying more stock. And I'm like, can you run through this thought experiment with me right now that is this company worth a hundred x revenue right now? It's already worth a trillion dollars. Can it be worth 10 trillion? You do understand that that's like the entire GDP of all of Europe put together basically half of America of 50 to 50 to 40% of all of China for one company's market cap. I'm like, do you really think this is a 10 x play? And he was like, yes, <laugh> . That's what we're dealing with right now. People being like, I know $34 billion seems like a lot of money, but what if this company is worth $80 trillion one day? I'm like, okay , it's , yeah , it's tough. One , just , it's 34 billion with $0. If they make a hundred million dollars a year, then it is, I guess worth $90 trillion. Sure, it's as much as all of the new real estate in America.

Pablo Srugo (Host):

But think about how, and think about how much that has changed. And not that , like Instagram gets bought for a billion dollars , uh, in what, like 2012? So just over 10 years ago. And it

Jack Kuveke (Guest):

Was a

Pablo Srugo (Host):

Huge deal. 'cause it was like, dude, like this app has no revenue. It's got 11 employees a year and a half old billion dollars Wild WhatsApp gets bought for 19 billion. That's like outta this world. People can't believe it now, you know, this doesn't happen. Like fundraisers at that level are happening like all the time. And you know, I don't know. I mean, on the one hand, yeah, there's a huge tailwind with ai. I think there's also recognition of people have never been valued as highly, you know what I mean? Like, it used to be you needed something more than just people to get that kind of valuation , crazy user growth, revenue, whatever. Now it was just like, dude, I was, I'm one of the founders of open ai. Like, oh, boom , here's, here's a ability . Like why not? Right? I don't

Jack Kuveke (Guest):

Know . Yeah. And, and, and Mira , the other co-founder of, of OpenAI is raising a $2 billion seed round at a $10 billion valuation. She's not offering the rules of the engagement are that she has more Boer board votes than everyone combined on the board, plus one. So they're gonna give her $2 billion. And this is a quote from TechCrunch, her company thinking Machines lab only recently emerged from stealth and has no product or revenue to speak of . What it does have is dozens of high profile AI researchers in its regs .

Pablo Srugo (Host):

This is what I'm saying, like the world, the world has changed, but it , but then the flip , here's the flip side. The flip side is you look at OpenAI itself, you look at the beginning of it, and it was equally insane. And yet those people are up 50, a hundred x. So now everybody's think, but it wasn't 10 billion posts. Maybe it was like a billion posts or whatever . Those early rounds were pretty nuts though. So again, like who am I? Who am I to say, you know , I'm not a 16 C, you know, I don't , I don't have spies. I don't know.

Jack Kuveke (Guest):

Yeah, I, I don't know. I mean, this , if they, I just, it doesn't make any sense. I, they just, quite frankly, I just, I'm, I'm like more and more convinced that we're just gonna go into like a great depression. The dollar's gonna be slashed to a 10th of what it's worth. Like we're just deval like, money doesn't make any sense anymore. Everything in New York is worth , like, every apartment's a million dollars and you live in dog , a dog apartment with like 400 square feet. You know, AI companies that don't make any money are worth $40 billion. I mean, it's just, none of , none of this money thing really makes sense anymore. And I think I'm just gonna buy gold bars and move into the woods and buy a bunch of guns because it seems like this just gonna come crumbling down. This just smells like bad news.

Pablo Srugo (Host):

Well, you know, to kind of make me a great segue for the next piece, which is timely, if things are about to fall apart, which is this Klarna DoorDash partnership, where now if you wanna buy a meal, 20, 30, $40 meal , uh, you don't need to have the money anymore. You don't need to have the money to buy anything. You don't need to have the money to take a , a ride somewhere or , uh, to pay for groceries because Klarna will let you , um, split it up into flexible monthly payments.

Jack Kuveke (Guest):

Dude, this is the darkest timeline ever. It's, it , I, I wrote my , probably my favorite article about this that I've ever written. The detailing, like what happened with do what , what's going on with , walk

Pablo Srugo (Host):

Us through it , walk us through it.

Jack Kuveke (Guest):

But basically, so I mean, the reality is just consumer debt has gotten so out of control that it doesn't even make sense, right? Like if you look back at like the 1940s, the only thing you could get a loan for was a house because your friend got blown up in Iwo Jima and the American government felt bad for you. So they're like, okay, here's $3,000. You can buy a home in Michigan. And the house literally was $3,000. If you wanted to buy something that was worth $50, you had to ask yourself, do I have $50? If the answer is you have $49, you just couldn't buy anything. But since then, like in the fifties and the seventies, we started introducing like car loans, credit cards. And then by like the eighties and nineties, it was just fully expected that everyone was in crippling debt. You have to take on crippling debt to go to college. You have to take on crippling debt to buy a car. You have to buy , take on crippling debt now to like travel to France. No one I know can afford to go to Europe, but everyone's been 15 times and then they're complaining like, I don't have any money. It's like, well, yeah, I just saw your photos of you in Fiji. You make $42,000 a year. Fiji's pretty expensive. How did you afford that? And then on top of that, you look at them and they're like wearing a Gucci tracksuit and like, they order from DoorDash every single day. And I'm like, you literally cannot afford to do that. Even people making $150,000 a year should not be ordering DoorDash every day . That just is a , financially a really bad idea. Unless you live in like Iowa where rent's like $400, but if you live in

Pablo Srugo (Host):

New York by , they're sponsored by DoorDash. So just , uh, what would you say? Oh ,

Jack Kuveke (Guest):

Oh , me , I'm, I'm sponsored by DoorDash too . It's , by the way , I'm getting to that. This is a DoorDash sponsorship <laugh> , I'm fully on board . But like, it's a good idea . What , what literally happened is, you know, I, I think everything really started to blow up during like the bling rap era because like, it started to come out that like everyone was a model. Everyone was wearing a $50,000 watch and $20,000 worth of chains and wearing a Gucci tracksuit. And everyone looked up to these like rappers and models and celebrities as role models. And they're like, I wanna live like them too. Previously you couldn't buy any of that. But then credit card companies and banks started loaning people for consumer debt on things that they literally don't need. Not a house, not a car. watches call like, you know , uh, expensive couches and stuff. And now everyone's sitting around being like, man, why don't I have any money? And it's like, well, you went to Wesleyan, took out $250,000 in loans to go to Wesleyan. You got a degree in whatever, like human resources, <laugh> , you work at some company making $58,000 a year. You have a $40,000 wardrobe, and your apartment in New York City is at minimum $4,000 a month. And on top of that, in the split second that you almost notice that your life is indebted and that you up. Ka Perry comes out with a new song, goes through space, you know, Lizzo starts talking about someone. You forget that you're in debt. And then in that split second , right, right after you decide, man, I feel kind of bad about myself. You know what I should do, DoorDash, Ben, and Jerry's, but your credit card declines and you go, I can't afford Ben and Jerry's on DoorDash. But that's where Klarna comes in. Now you can finance the Ben and Jerry's over 15 payments and you can't afford to get it, and your Xanax will also arrive tomorrow because you're on, you don't know why you're just depressed all the time. Maybe it's your debt. But like, that's where America is. We're just in consumer debt. Hell, it's everyone's fault. Everyone should take personal responsibility, but instead we're gonna blame the banks.

Pablo Srugo (Host):

The funny thing is about all that is like, you know, and for, I should note, I , I travel to like Latin America pretty, pretty often. It's pretty, it's actually common when you pay with credit card, they ask you how many installments like you , you pay with credit card. And at the POS it's like, how many installments do you wanna , you wanna do this in? And you know, normally people are doing like 2, 10, 12, right? Like , you even do that with a movie. You go to the movies, you buy a movie ticket today and you're paying it. Here's the crazy part, like when you do it, you're like, oh, that's kind of nice. Like, I'm paying like a dollar a month to go to the movies today. Like in 12 months, you're paying for a movie you saw a year ago. Plus the movie saw , the bun has one after the , after you're paying for Ben and Jerry's, they got 15 months ago, he was still paying off ice cream. It's not, you know, it's not a good place to be in. Do

Jack Kuveke (Guest):

You know, do you know how old my grandfather was? He's 88. He's a gem or no, 89. He turns 90 in September. Do you know how old he was? Pablo when he went to a restaurant for the first time? He ate out for the first time? No,

Pablo Srugo (Host):

How old ? How

Jack Kuveke (Guest):

23 <laugh> . And I asked him, I was like, grandpa, that sounds crazy. What are you talking about? He's like, well, I couldn't afford to go out to restaurants. I grew up in the Bronx, Jack, I just, I ate at either my house or if I was lucky, a friend would have me over to dinner. And these were not, these were not like, they were, they were, you know, lower middle class , but they weren't like poverty line poor. But he was like, yeah, what are you talking about? I didn't , I didn't go out to eat. I , I couldn't do that. I literally could not afford to, so I just didn't. And he walked to college. He walked to college , Iona College. He was the first one in his family to go. He walked in nine miles to college every day and then would just hitchhike if he was lucky or walk nine miles one way to get to college.

Pablo Srugo (Host):

I think these days, like you should , you , you're like, anything you want, you should have, you know, and also it's so much in your face that everybody, what everybody else has, like you said, that you just like, are constantly reinforced, like, man, I should be like, you see other people traveling, like I should also be able to travel like I deserve it. And <laugh> , you know, Clarin comes in, let's you travel, so you do it. Meanwhile, I met this founder the other day who's really, really smart dude, like engineer type and first company did work out , starts a second company like four years ago. Um, raises like 200 k. And I was just like, and still like, it's a hardware startup, so it's a bunch of tech work, RD whatever, still not really sharing revenue. I'm just like, dude, how are you like living? And he is like, man, it's not, he's in Toronto, like downtown Toronto by the way. He's like, it's not that hard when you , um, just make it a point <laugh> to like live cheaply. So, you know, I , I can't say that I'm doing that, but my point is, there is extremes out there of what's, of what's possible. I mean, he must be making like 40, 50 KA year, you know, just, you just do the math on it. So somehow he's making it happen.

Jack Kuveke (Guest):

I have a couple friends that don't have jobs right now and like, I have to scold them 'cause they go out, they're still going out like three or four nights a week. We live, I live in New York. It's a fun place to party. It's a fun place to go out to bars or whatever. And like , uh, my advice to him is like, whenever I'm in a tough time, I try and make myself earn things. Like I go out way less. If I go out, it's because I did something that I felt like I deserve to treat myself. But like, I have to live that way, otherwise I'll just literally dress like a rapper party, like I'm 50 cent and like go absolutely out of my mind and just spend like a complete maniac. But like this whole idea that you deserve things when you have done nothing to actually earn it is, is really unhealthy and it's a slippery slope because everyone's doing it. And most of my friends just assume people are richer than they are. And it's just like growing up, my dad would like, well , we , we , I lived in a pretty affluent area and he would point out , he's like, see them? I'm like, they have a nice house. He'd be like, yeah, dad, that's a really nice house. He's like, we make way more money than them. All right . They live in a $6 million house. They've got four cards . One of them drives a Porsche. He's like, they make half of what we make with a six time more expensive house because it's just all debt. They're in crippling debt , Jack . And he would be like, live beneath your means . Yes. Don't get into debt. <laugh>. And I , it , it scared the out of me. And then I realized just growing up that like all of my friends, for the most part, not all of them, but a lot of people I know are just in debt. They look like they're way richer than they are, but they're just broke as. And it's scary because you have no idea from the outside. Everyone seems like they have it figured out and almost no one has anything figured out. Perfect.

Pablo Srugo (Host):

Well, let's , uh, let's stop there. I think in conclusion, what we learned this month is if you're struggling, if you're, if you're feeling like you need to use Klarna to buy , uh, Ben and Jerry's ice cream, the best thing you can do is go work at a 16 z, become a vc, because that's the final thing that's gonna be extinct. And , uh, if you can't do that deal is hiring spies because there's just quit. So that's another option for everybody to double your income.

Jack Kuveke (Guest):

Beautiful takeaway, well said, Pablo .

Pablo Srugo (Host):

You remember like the first person who told you about Bitcoin, the first person who told you about Uber. You want to be that person because being first is cool. So be a cool person and tell your founder friends, set it to them on WhatsApp. Put it in a WhatsApp group, put it on a Slack channel. Let people know about the show. Let people know about this episode. Don't let somebody else beat you to the punch and share it with your founder friends. First, remember what Ricky, Bobby said. If you ain't first, you're last.

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Pablo Srugo

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