Latest / Beat The Odds with Dre, Rodney, & Brylan / SpaceX Puts AI in Orbit, Figma’s Token Economy & The Startup Valuation Reality Check

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SpaceX Puts AI in Orbit, Figma’s Token Economy & The Startup Valuation Reality Check · Beat The Odds with Dre, Rodney, & Brylan

• Dre: Yo guys, what's going on? Welcome back to another episode, man. We're in the middle of the week. How y'all feelin'? Rodney: Productive, productive, productive, Dre: Same. Rodney: yes, yes. Brylan: I would I would I would I would definitely say the same too, man. And you know what? I feel like this week I've been trying to get back on my content game, bro. Like I feel I feel like I fell off on my content game a little bit, bro. and you know, ro Rodney been in his bag. And then Rodney got us in the bag. Every time I open up YouTube, there's a new beat the odds, bro. Content is fresh. and so I've been try so Dre: Mm-hmm. Rodney: Yeah. Brylan: I've been trying to stay on that too, but I feel like I really I've started to find my niches, bruh. Of just at least on TikTok, I would say like fitness, specifically like running. Rodney: Yeah, fitness is a is a big one. Fit because nobody's nobody's doing that consistently. So it it ain't that Brylan: Nah, nah, y Rodney: hard. Dre: So what does that look like? Like Brylan: Bro, facts. Dre: you were like recording your runs or what or like yeah, what what does that look like? Brylan: Yeah, bro. Little shit. Yeah, bro. Little shit. Little shit like that, bro. and then on honestly it was Lou. Shout out to our man's Lou. Lou was the one that Rodney: Yeah. Brylan: gave me the I the idea because, you know, he came and stayed a week with me in Chicago. And so he saw how I was living and he was like, bro, why don't you record your life? Rodney: Bro, no way doing this. He's like, Nobody doing this, yeah. Dre: Yeah. Rodney: Yeah. Brylan: Yeah, and I was like and he was like, Man, just get the little tool or whatever. So I finally got it, bro. And so it's been trans what's crazy is it's been translating to Rodney: What's the tool? Brylan: Substack. it's the little thing to just hold your phone, like the tripod stuff, bro. That's all it is. Yeah, yeah, yeah, yeah. Rodney: w yeah yeah yeah I got to yeah. Yeah yeah. Brylan: But it's been translating to Substack, bro. Like on Substack, and shout out to DeAndre. DeAndre gave me a cheat code. But I've been averaging like a hundred Rodney: Ha ha ha. Brylan: and seventy a hundred and seventy new subscribers. Like I'm yeah, I'm already up to a hundred and seventy new subscribers this week, bro. People sleep on Substack, bro. Rodney: I'm minute. I I really I'm I really think that DeAndra has such a great personality and she's such a she's such a wholesome person, but I have to say I'm gonna need her to revert that change she she unfollowed me. I don't know I for I I I'm gonna need her to change that. Cause I cause I don't know what I don't know what that was about. Brylan: There, Rod what you do? Damn. Rodney: I don't know that I don't know what that was about. I must have posted something. I must have posted something. I must have cause it was it I I don't know what that was about. But I thought we was I thought we was cool. I remember we we went to launch house. We Brylan: Were you in favor of Drake? Rodney: nah, nah, I I I ain't put no drink. I I know I know I know she went PG Lang. I saw that. I saw that. I saw that. I saw I saw that. That was and you know, shout s shout shout out to that. But tell her like if if she if she look, it's I come in peace. I don't know what I did wrong. I don't know what I Dre: Nah. Brylan: That's real. Rodney: did wrong. But yeah, she's she's great. Dre: Man, y'all had a good y'all had a good team over there at seventh aft, man. Now that I'm thinking about it. I'm thinking about like where Rodney: They're strong strong. Dre: where where where some people have landed Brylan: Bro. Dre: since y'all since y'all kinda with y'all separate ways. Everybody is doing doing some some killer shit, bro. Brylan: Nah, facts, bro. Rodney: Brian, all you needed, all you needed, all we needed back then was a little bit more discipline, man. Brylan: Hold that. Rodney: That's it. Dre: Bro. Rodney: That's all that that was the the key. We had the the the the the talent, the money, the the youth, the vital the discipline. Brylan: Facts. Facts, bro. Dre: Yeah. But ha but having the having the talent, man, bro, that that that is such a major that's such a major a major Brylan: Facts. Dre: unlock, bro. Because I I think about even in my experience, like, yeah, I had like I had decent talent, but like you had killers on your team. You you had people like the the in the individually have a an extensive resume of of what they have done. Brylan: Facts. Dre: You know what I'm saying? And like it Rodney: For sure. Dre: it can speak to that and are good at the individual things that they do really, really fucking well. Rodney: Yeah. Dre: And it's just rare to find that. You know what I'm saying? Like I I think that I think that's just I mean, shout out to you for just having the eye for for for talent and how to bring it all together. I do agree though, more discipline would have would have helped, but man, y'all had a lot of good pieces, bro. That's half the battle right there in building a company. Brylan: Yeah. Yeah. I I I I also will say, brother, it's like, you know, a lot of the conversations actually I was watching one of our recent episodes 'cause I saw they got uploaded to YouTube from like man, this had to be maybe like two years ago, right? Like even how we talk about how we, you know, see company building or like see markets evolving, like it's just different. You know what I mean? And it's just it's like a contact sport, bro. The more the more the more the more you do it, Dre: Yep. Brylan: the better you'll get, man. So Yeah. Rodney: I Dre: A hundred percent. Rodney: I do think I definitely think I see I mean you you gotta see building companies different after the experiences that we don't went through. Just for the audience know, we have collectively raised tens of millions of dollars. Like we have raised a lot. Valuations over over twenty million collectively, but raised, you know, millions of dollars. Dre's also running a bunch of things right now in in business. It you Brylan: Dre is in a whole different Rodney: can't y Yeah, like so you Brylan: Dre on his Travis Khalan neck right now. Dre: Ha ha ha. Rodney: you you have to learn so we we've learned so much. So I I definitely I definitely know that that what I thought I knew before is not necessarily how I would approach a company today. And if I was to do a V C company, it would have to be something where it's it the like the the Conviction would have to be on another level. It couldn't just be I have this idea and I just want to raise some money for it. I just want to raise some money and just start building something. It has to be like there's a clear connection. And maybe I've even already started off getting some traction without investors, etc. Like something along those lines. But even still, the way that you build it. It's such a long patient game and you need to have a certain mentality. A certain mentality. It can be worth it, but it has to it ha it really you really need a discernment. You can't don't don't don't just start everybody wanna start a startup. Don't don't just start a startup. Don't don't do that. Don't just start a startup because you wanna be a founder, that don't do that. Don't do that. Dre: Mm-hmm. Brylan: Fags. Fags, bro. Fags. Rodney: But yeah. Brylan: I I would I would also say hold on Dre: Well speak speaking it go ahead, Ram. Brylan: I was yeah I was also gonna say on that topic too is I think I think I think less people should fall in love with this word and idea of like founder. For some reason, like Rodney: Yes. Brylan: people like to walk around with that title as if it's like a badge of honor, go to you know, the founder meetups and like bro. Rodney: Ha ha ha. Brylan: At the end of the day, that shit is empty calories until you have cash flow Rodney: Yes. Brylan: to justify what it is worth. And I think like that was like in in in in in you know, vein of like, you know, what Rodney was just saying, I mean, I think I think once again I still meet so many founders where like folks aren't thinking about that from day one. And don't get me wrong, it's a long patient game. But it gotta be long and patient and built on something predictable that captures value. Like Rodney: Y you need Brylan: If that don't happen, bro Dre: Mm-hmm. Brylan: What are we talking about? Dre: See Rodney: You need more clear you mean you need more clear you need a clear insight on something that other people don't know that you can actually take a an angle on and have an unfair advantage on, but also you need to know how to pivot and iterate. That's one thing that I did not do well. I did I I I I Brylan: Can can can can I add one thing to that? Rodney: go ahead. Brylan: You gotta be able to get it in people's hands. You gotta be able to distribute it. Rodney: That especially today. Especially today. So that's so distribution was always a a thing, but it's become a a way bigger thing now that anybody can make something like this. It it reminds me of Brylan: Facts, bro. Rodney: what people say about like when they made getting microphones easy. So you didn't have to go to a music studio to record a song. You could just buy a twenty dollar, fifty dollar mic. And then you had all these songs all over Spotify album music and it reminds me of that type of problem where now it's not just the people who have studios that are making songs. You have people all over with twenty dollar mics, fifty dollar mics, whatever, in their in in their closet making songs. So in this whole C Brylan: Yeah. Rodney: how how do you how do you it so the the We have it's it's there's a streaming error type of mentality now to apps now because of the AI stuff. But but yeah, we have some topics for everybody. as you can see we've learned a lot. Maybe one day we'll dedicate a podcast to our learnings and our pain and and maybe some of the wins we had, but but but lots of pain, lots of less lessons. Dre: Well speaking well well spe speaking of team, maybe we should start with the the Google news because that just came across the timeline today. So I don't even Rodney: Yeah. Dre: know the full the full details of who these people are. I know who Dennis is, of course, but I don't know who the Rodney: You're right. Dre: other guy is. I'm pretty sure I've seen his name, but I don't fully know him. So I think Bradley, you probably know more. You wanna touch on that one? Brylan: Yeah, yeah, yeah. So today, just for context, yeah, Google had some major organization changes. So Demon Sosavis, you know, who has been the co-founder but also the CEO of DeepMind and now Google DeepMind, he's actually moving into a chairman position, I believe, and then he's becoming the chief scientist of Alphabet in general. Right? So this won't only mean you know, Google Deep Mind, but also all of Google's products, Waymo. you know, he he'll be kind of, you know, touching some of that strategy, YouTube, et cetera. The current chief scientist, Jeff Dean, he's very interesting. I feel like Homie has literally, he literally almost reminds me of like my mentor's husband. and I think I've talked about my mentor's husband. He was like one of the co founders of Google Maps and now he's the CEO of Nymantic. But the way these people move. where like they were so important to the early foundations of just not only the internet but technology in general to where like they're a little bit beyond the millennial generation. I think you're starting to see those people get excited at the tail end of their careers because the guy who's, you know, chief scientist now, Jeff Dean, I I think I read he was like fifty seven, fifty eight years old. You would think somebody that has been doing this that long has made that type of money. would want to go sit down. No, no. And so, you know, he's he's getting he he he actually was the person who created Google Brain. So Google's first AI kind of like programs, you know, he created those first original teams too. So he's been very impactful. and he was the thirtieth higher at Google. And so like that's the other thing people need to take into consideration is like being at Google, being employee number thirty To now this what their their their head count is hundreds of thousands. That is fucking nuts when it comes to experience. And so Rodney: C, ese. Brylan: yeah, so he's been there, he's been there that long since nineteen ninety-nine. And so yeah, he's leaving to go start his own company. Google is the lead investor in the company, and they're specifically focused on what you were talking about before the show, Rotney, around AI being used to train itself. for the next iteration of its model and he's applying it to specific domains such as machine learning, life sciences, chip design and materials. and so he's stepping away for another opportunity. And so I know Google stock I think slid five or so percent after after that kind of news today. but yeah, how how how are we reading that news? 'Cause I know we've also been saying Gemini has been falling behind, things of that nature. So Yeah, what'd y'all make of it? Rodney: Before I get to the analysis part So I'll separate things. Typically, I like to talk about what I think, not what I feel. So if you people may or may not notice, I'll typically say, I think this, I think that. But I will talk about how I felt when I saw that. And I felt surprised. I felt a little bit sad for some reason because I think I told you all you guys. before out of everybody, Dario, Sam, Elon, etc. That I thought Demis was the one genuine person in the whole the whole thing. Now he may not have been the topic of discussion, but I thought he was the most genuine because I could go back on videos of him talking about All the things that AI was gonna do, all the things that AI was gonna be capable of ten years ago. You there there's YouTube videos of him talking about these things ten years ago. And as he said in this post on X. He's spent his whole life leading up to this moment of AGI. So it is a bit just interesting to say the least. And to move on to what I think, I think that I don't know if I believe that he stepped down on from a willingly standpoint. He comes off more like a Dario in the sense that he has a very scientist type of mindset. He he's a I think he was a scientist first, to be honest. And he became a CEO. And I think that's how Dario is, in a way. Don't get me wrong, I'm not saying that these are bad CEOs. I'm not even saying Dario is a bad CEO. Although Dario has his problems. But it's more so that there were scientists. And that doesn't mean you can't be a CEO because technically Elon is an engineer. He was an engineer first before anything else. And now he's a CEO. So you don't have to be one thing and you can't you can't be something else. But yeah, I felt surprised and I felt a little a bit sad. I thought he was the most genuine person out of the whole thing. And I don't know these other guys. So I have to get to know them and see what's going on there and hopefully he has influence over where it goes. Dre: So him I I I guess for Demis, him stepping into a chairman role, you mentioned it. He is gonna be overseeing all of Alphabet's AI. So that includes Waymo. Brylan: Yeah. Dre: Okay. So d is that just like an expanded Brylan: But I but Dre: scope for him? Brylan: Yeah, that's that's that's kind of what I feel like it i it is. It's it's it's expanding you know what w but but once again, we're not inside these companies and we don't know because like say for example like Deep Mind, like Gemni, it was already touching YouTube, you know, they were already using it also in Waymo. And so yeah, what does that actually look like? We don't we don't really know. Dre: Hmm. Yeah, I I don't know. I I guess it depends on how they define that. Cause at first I thought it Brylan: Yeah. Dre: was just based on what you said, I thought it was an expansion of oversight, putting him more in a strategic role. But I mean, maybe this is the beginning of him transitioning away from Google. It's hard to say. I I get the sense that maybe this is some of the talent within Google realizing that in order to really achieve some of the objectives that they believe are possible right now, given what they see and what they have access to, that it's probably in a easier path, or maybe not even easy as the right word, but it's a probably a more productive path to get there outside of Google. And just have Google kind of fund it, right? And the reality is this may it just end up back at Google anyway, right? They're gonna be an investor, they're probably gonna be very involved. I'm sure there's an agreement, they're gonna be using Google's compute infrastructure, right? So they're I mean, they're leaving but not leaving, right? Like they're leaving but just going to focus on a different area, but Google's still gonna be a part of that. And so I think if any of these teams built anything meaningful outside of Google, and if Google actually thought it could be beneficial and helpful, I'm sure they would just absorb it. So I think it's just again and this is just my thoughts. I have no idea. We we don't have a ton of f information. But I think this is more so like sometimes to go faster you gotta be in smaller teams. You know you have to escape the bureaucracy. And I'd imagine it's probably a lot of that happening to Google. There's probably tons of teams fighting over compute, fighting over resources, fighting over priorities, fighting over budgets, fighting over all types of stuff. and so sometimes isolating that just makes that a little less challenging. So I don't know. I again I don't know if that's true, but that's kinda how I how I initially kind of saw it. Brylan: Yeah. No, I think I I think I think I think that's a really good point. just because there has been a great exodus of talent from Google and DeepMind in general over the lack last few months. And what's interesting is like I think the directions, the folks that leave, they tend to go pursue. And so you really do say for example, like, you know. I would say I would say the guy leaving today, that's really going and chasing after the trend of like you know, recursive self improvement. But the other co-founder of Google Deep Mind, he actually left it like two or three months ago and ended up raising like four billion dollars or something. Sham Shane Leg, I believe his name is. but he was chasing that same trend. There was other Google like researchers that left to go chase continual learning, which an is another trend. And so like The reality is I I think I think they can make progress in those research directions, going back to what you were saying, at like a speed. They probably can't internally. Rodney: For sure, for sure. I think the Waymo thing is gonna be really cool though, as far as one of their AI projects that Alphabet has. I think that's a that's a s somewhat underestimated part of applied AI. And it's a very so far a very well strategically rolled out plan. And they came out in Dallas as well earlier this week. So so so they're constantly expanding and it's I think people are are gonna look up in six months and just be shocked that they're nearly everywhere. Everywhere that people primarily these hubs, San Francisco, Austin, Houston, Miami, Atlanta, Detroit. st s Nashville, people are gonna look up and it's and they're just gonna be nearly everywhere that you go. And and then the next phase will likely be not just the hubs but more outside of the hubs, like the the suburbs, areas, and and essentially what I'm getting at is that autonomous vehicles will be nearly ubiquitous in three, four years. And that's pretty insane. But we have we have other stuff to talk about, but the demonstrat Brylan: But but but hold Rodney: yeah. Brylan: but hold up. I think that's a really good transition, like talking about Waymo, to really talk about like SpaceX and like some of these Rodney: yeah. Brylan: other companies that like they're the compute is going crazy right now. Like the stock market is seeing a crazy ass sell-off. Rodney: Yeah. It's insane. Brylan: But if you see the revenues of these compute companies, and I think you know, we we were talking about SpaceX and Elon saying they potentially Are forecasting a trillion dollars by 2030. That's nuts. But I think a lot of the conversation, if we're just gonna be honest, a lot of the conversation that's happening on Twitter, in the media, even in these earning calls, is not compute like taking into consideration physical compute. And don't get me wrong, like for a Waymo, things of that nature, a tremendous amount of the compute will be on the machine. So the car, whatever the robot is, etc. But there still will be. like certain, you know, tasks that they have to handle for whatever the workflow is that will still need to talk to the cloud somehow. And so like we're like I just it I just find it weird that like we haven't even started to like really understand like if we're talking about dark factories. So these factories that have these robots in them that are just running, that's gonna require compute. And so yeah, Dra Y'all wanna give the context of the SpaceX lessons? Go ahead, go ahead. Rodney: just made a connection. Sorry, Dre: Yeah, bro. Rodney: sorry, sorry, sorry, Dre. Real quick. Bryan just made a connection to compute that I that I I didn't I'll be honest, I didn't Brylan: Yeah. Rodney: even connect. I didn't even connect it. To run all this autonomous robots and the the Waymo are are part of the robots as well. that's also gonna need compute so it's not just the llms and the video generation and the image generation you wanna you wanna make your teeth whiter you want to change the location of your photo you want to remove so your ex from a photo it's not that it's not it's not just that it is we're gonna need compute for all this other crazy shit that that that's coming And we could when you put that into perspective, we don't have enough. We definitely don't have enough. Brylan: Have not Dre: Mm-hmm. Rodney: and SpaceX, one thing that was interesting is that they said that they're going to be by this time next year, they're going to be launching a rocket every day, their their starship every day. Now that's very ambitious. So I don't know what that comes with, but but yeah, I let Drake take it. But that that compute that we we have nowhere near enough. We are nowhere near enough. Dre: Yeah, I mean, before we go on to earnings, because I think that's interesting. SpaceX had announced a partnership with NVIDIA to start building what data centers in space. and so I think from I mean, so I mean, so the the argument of I mean, not even argument, the the statement around not having enough compute is being felt by everybody. and Elon is working I mean, Elon plus NVIDIA are working on some very interesting solutions. Whether or not these things pan out or not, but they're at least taking the swing. Right. And so this could open up an entirely new market of compute. and so, you know, could have total different cost advantages. But anyway, SpaceX just did their earnings announcement, I think it was yesterday actually, for the first time in history since going up since opening as a public company, revenue was up 92% year over year. Now I'm gonna put this in perspective. The percent changes are pretty high here, but the numbers are low. And so the thing that makes it interesting to me. Is the runway that they have is extraordinary. So let's start to paint the picture. So for the quarter, revenue was about $7.81 billion, again, up 92%. the expect the expected revenue from the street was 6.9 billion. So they beat that. net losses narrow to 541 million. I think estimates were higher than that. adjusted EBITDA reached $3.5 billion. That's up 191%. The revenue mix, so connectivity and Starlink revenue is 4.29 billion. That's up 66%. And that's roughly 55% of total revenue. AI data centers, Grok, XAI, that revenue is about $2.5 billion. That's up 247%. That's the data center. center business right now. So that business is growing at an extraordinary pace. That's roughly 33% of the revenue. And then space and launch business is about nine hundred and sixty two million and that's up twenty nine percent. So they're I mean they're growing double digits and and beyond in every single business category, with the spa the AI business obviously being the the smallest but the fastest growing right now. Starlink subscribers double. from six million to twelve million. which is which is interesting. So w why are people selling off the Brylan: Hold up, hold up, hold up. Dre: stock? Go ahead. Brylan: Hold hold up. Six million to twelve million. Just for start. Dre: Yeah, they have twelve million subscribers just on Starlink. Brylan: Bro, we're gonna look up and that's gonna be hundreds of millions. Dre: And and and and when I was listening to bro, easily, easily. And they're launching the Starlink Mobile pretty soon. I don't know what the timeline is on that, but that's gonna be a a direct con competition to like T Mobile phone service, to Verizon's phone service. And I was listening to Gwen Chatwell, who is the president COO over at SpaceX, and she said collectively they believe that market is about what six hundred billion dollar a year business. And so they expect to see massive growth there. and I I expect them to be in the fifty to a hundred billion dollars to them, it pretty soon. So but right now investors are a little bit skeptical. So even though they've had incredible numbers beat on every expectation, the stock has been selling off. And partly because they spent about fifteen actually almost sixteen billion dollars on AI infrastructure during the quarter. So they're spending a tremendous amount of capital invested in infrastructure, investing in data centers, investing in new types of data centers, like I said, that partnership with NVIDIA. And so while spending is up, revenue is up, investors are kind of skeptical on whether or not they're gonna be able to to to walk into this crazy valuation expectations. But I mean, again, considering how small these numbers are, I I I mean, I I I can't It's it's easy for me to see how they can be at a hundred billion dollars pretty quickly. And Elon pulled up exp expectations for pulled forward earnings. So he expected the company to hit a trillion dollars in revenue by twenty thirty-one to twenty thirty. That's his expected revenue target for SpaceX. I don't know if they'll hit that, but I certainly think they'll be in a high hundreds of billions of dollars in revenue. Brylan: Yeah, I think Like there's a few things here. 'Cause a lot of people may hear I I I I I do I do think the other thing we didn't mention, and then I'll kind of make my point here, but I think you know, people are still expecting the stock price to go down. I do. I d I don't think you'll be surprising if you see it go below a hundred just because of the way they have their share kind of like releases. So I think there's a major one. happening tomorrow where like you know now forty five percent of the outstanding shares are will be available. Employees will be taking money off, you know, the cap table is just a smart thing to do. but I say all that to say that like while the stock price may be going down, I think if you really look not only at, you know, the data is early, but you know, the data is promising, but you also look at some of the recent catalysts, like before we had talked about, you know, the compute deals that they've done, you know, with Google and Anthropic. Those are major. the other thing too is like, you know, cursor. We haven't even started, you know, seeing what that's going to turn into, but, you know, that that they're doing well. And then the other thing too is like what you were saying. A freaking rocket a day. I don't think people really are fathoming what that means because They already have all the pieces genuinely, genuinely, to make AI data centers work in space, right? And if you think about it, it literally is Starlink. Like, if you go read the type of like the I think when they when they when they initially went public, they had put out the how they were thinking about designing these AI data centers. And it's literally a satellite similar to Starlink with some different components. That's not to say that like this is not going to be a hard task. But the fact that like a real deal is now done with NVIDIA, money is put behind it for like an important component. On top of like now they're saying they're able to put a rocket in space every single day. Brah, Brah, we're probably about to see a great acceleration. Dre: They're they're so uniquely positioned, it's almost like it's almost unfair to be honest. Like like it like they Brylan: Yeah. Dre: they've they've pretty much have cornered a market that it's just gonna be really, really difficult to compete directly with them unless you're willing to make the same capital investments. I mean it's similar to kind of like Amazon, right? And the in the the the lead that they have. in the e commerce space. Like it's just hard to compete. Or like Walmart and physical retail. It's just tough. You know, like you gotta be willing to invest a ton of Capex in order to to to or figure out a new way to do what they're doing better than them. Right. And with a company as innovative as SpaceX, that's just hard to do. I mean, even Blue Origin, Brylan: All right. Dre: which is another well funded competitor isn't really making the same strides and momentum as SpaceX is. And so they're behind, right? And so while there is a lot of comp competition coming into the space, I am more optimistic that the future will lead to a lot more companies, you know, being able to go into that space. And so we'll see competition coming, but they just have such an unfair advantage. And so again, to me, I'm a buyer of the stock. I'm gonna continue to buy it even as it goes down lower because I just can't see how they won't be able to push revenue up. And if revenue goes up, they should be rewarded. Elon has always rewarded investors. He has a track record of that. I don't even see why you would doubt him. His record speaks for itself. He always rewards investors. And so I don't think this is any different. Rodney: I think I would agree. I think I would agree with that. The only thing I would say about Elon is that he's he's looking a little bit unhealthy recently. So that that that's the so so it he has he has performed very well for a long time. We can't we can't take that away. But he d he just he he seems a little stressed. He he just look at his face. Brylan: Wasn't he fighting Mark Zuckerberg just a few years ago? Rodney: He was fighting Zuck. He was supposed to. But he was not gonna win. He's arrogant. He's Brylan: Well, I don't no. Rodney: not gonna beat Zuck. I remember I remember I I think I remember there was a little bit of that, I think. He's not gonna beat Zuck. He's arrogant. Elon, Elon's slow, Elon, Brylan: Yeah, I thought I I th 'cause was it Taekwondo or Digitson? Rodney: Elon's slow, don't matter. Zuck will whoop Elon's ass. Elon Elon is detached. He's just focused on all this future shit. So he don't really understand where he's at actually at. He thinks Zuck is short or shorter than him. But he forgets that Zuck is not the same Zuck that he met when they first met. Zuck is not he ain't he ain't that Zuck no more. He's different. So so he's Brylan: That's big Zu. Rodney: different. Yeah, Zuck is different now. I wouldn't fight Zuck. I Dre: Yeah. Rodney: you back back in the day, I would have yeah, yeah, I would, I would have, I would, if I if I had to, I would have. But now I would I would I would avoid, I would de-escalate with Zuck. I wouldn't I wouldn't escalate with him. Big because Dre: That's funny. Rodney: because because Dre Dre knows this. Once you do any martial arts, so for example, when I r I remember in high school, my first year of wrestling, I remember One, I just remember getting you just get constantly people just fucking you up. You know, just constantly fucking you. That's how it starts, right? And then you start getting a couple wins, etc. And then when you get those wins, and then you start to realize, wait, hold on. Most people cannot fight. Like used so you just know, you just walk around different, knowing that most people can't do nothing to you. And and then you start thinking, okay, if if they did something, I already know my first move. This is what I I'm gonna Dre: Yeah, yeah. Rodney: do. I'm gonna I'm gonna hit the legs. I I I I already know what I'm gonna do. So once I seen Zuck do the MMA, I said, you can't mess with him no more. You can't touch him Dre: Mm-hmm. Yeah. Rodney: no more. Dre: Yeah, yeah, yeah. He man, Zuck has made a crazy transition. That could be a whole different thing, man. From like where he started to because I mean we we've kind of grown up. He's kind of grown up in front of our eyes. I mean, we and we've grown up with him, right? Like seeing Rodney: Yes, yes, yes. Dre: where he is as cover on the forbes as the youngest billionaire worth just a couple Rodney: Yes. Dre: billion to where he is today is I mean crazy. Talk about a PR turnaround. But going back to what you said about Elon, I don't know if Elon is more stressed or not. I don't know, man. I I don't know. From everything I know about Elon, he just likes the pain. So I to for him, this may be what he need in order to to Rodney: Father's time. Dre: to to to just get more energized. He probably seemed bored, to be honest. Like like billions is just rolling in, everybody's kissing his ass. He got Trump on speed though, bread is no longer an object. Everything is just Rodney: Okay, let me Dre: propped up and running. Rodney: I okay, so so let me I'm just gonna send you this image, man. Y you're telling me Elon Elon currently looks something not something no man. Elon something's go like I'm not the Dre: Bro, he's old. The man is how old is Elon? He like damn near sixty. And he's white, bro. Rodney: But Dre: So you you gotta add twenty you gotta add twenty years to whatever he really is. If he's sixty, really and he really eighty. He really eighty. So Elon Elon and eighty going at this pace is crazy. Rodney: So I'm not trying to, I don't I don't want to disturb any people who bet on Elon. I don't want to start disturb anybody that bets on Elon. But if I'm an investor in Elon, I have to take that into account. I have to I have to take that into account. It it's it's no different than any other competitive sport. If if I'm an investor, I have to take it all into account. If I look at Elon right now, recently, he has a he yes, he's old, but he has recently started aging a little bit faster. He needs to get on the Brian Johnson protocol. Brylan: Yeah. Rodney: That's what he needs to do. He needs to try to reverse everything that he's doing. Because he right now, at the rate that he's going, he's on a rapid decline. He needs to pull Brylan: Mm. Rodney: that back. So that he can perform well and continue to get the returns from his investors. Because at that rate, his decision making is going to go down. And Dre: Yeah, yeah, yeah. Rodney: then before before people know it, all of a sudden Elon, he likes he like he he go he'll keep trying, but his he won't be like hitting the same. And and it so he needs to get ahead of that. All I'm saying is we can see I got one more photo. We can see it just. Dre: So E Elon is Elon is fifty five, so you know, you plus plus or minus, you know. Rodney: I know but but he wasn't looking like this six months ago, bro. Dre: No, that's fair, that's fair, that's fair. I wonder what his what his regiment looking like. Like Rodney: He's stressed, bro. He's stressed. He's too worried about Sam. He stops thinking about Sam. He needs to let that go. He's letting that get to him. Let that go. I think so. Let that go. Dre: He He pr he probably is thinking about Sam a lot. He probably is. He probably is. But that's cra that's crazy to think about, bro. If him and Sam had stayed locked in, he would have another trillion Brylan: Mm. Dre: dollar company. Like, bro, like Rodney: He would, yeah. He would. It's hard. Dre: bro, what we're seeing is just unprecedented, bro. I'm sorry, man. I'm not trying Rodney: It's insane. Dre: to be an Elon, Elon fanboy, but I'm just saying, bro. Like it's just Rodney: Yeah. Just insane. Dre: it's just it's just hard. When you put the ma it's it's kind of like the Jordan versus LeBron or any of the greatest in any sport. You know, it's always about the stats, right? So we're Rodney: Right. Dre: looking at business as a sport. If we just look at the stats as what they are, it's just he's in a class all by himself, bro. Just based on the stats. I I think it's hard. It's not that many people running a multi-trillion dollar company had their hand in that. Brylan: Mm-hmm. Rodney: It's just about how long he's gonna be able to go. We'll see. I mean Dre: I wonder what his secession plan is. Is it one of his is it is it gonna be his kids? 'Cause I don't I don't know. I mean I don't really know. I mean he got hella kids, you know what I'm saying? Some of them I'm sure are older at this point. Rodney: He has to be thinking about a plan. he has to be thinking about a plan so that either but if I know knowing him, he he will try to avoid having to stop. So he's Dre: huh. Rodney: already put some seeds in place a decade ago so that if he Dre: Yeah. Rodney: ever started declining, one of one of his something he's working on, whether it's neuralink or whatever, will give him the right thing so he can get back. Dre: I forgot all about Norling. I forgot all about Norling. That's a whole different Yeah, yeah, yeah. Yeah, I c I can Elon uploading his conscience onto he got all the pieces. He got all the pieces. Rodney: I ha yeah. Yeah, nerd yes. Yeah. Yes, yeah, yeah. So he can keep going. Yeah. I don't think he wants to stop. I think he wants to keep going. But he needs to move fast Dre: Yeah, I don't think so either. I don't think so either. Man, Rodney: though. Dre: well we'll we'll we'll keep we'll keep the audience updated on these earnings as they come out. I think yeah, a lot more AI companies are coming out with earnings as well. And so yeah, let's report on how these companies are doing. 'Cause everybody's wondering what kind of economy we're in. Based on what I'm saying, these companies are performing very well. Shit, even Uber posted their Brylan: Facts. Dre: numbers. Numbers is up, revenue is up, bookings is up. I'm like, damn. I th I thought I thought it was a K shaped economy. No. Brylan: X. Dre: I don't know. It's look it's looking different. It's looking different when you look at the stats. Brylan: Well well hold up, hold up. Rodney: Elon also says the memory stocks are gonna are gonna go up too. Brylan: So so so this is the thing, bro, about this whole K shaped economy, bro. The reason why it's K is because when this type of information is shared, people aren't going and doing their own research first, obviously, and then making certain decisions. I actually being on the sidelines is a decision. It is a good decision when it makes sense. I I I just think right now this is looking like a Burlington's fire sale right now. Everything is cheap and has to go. Like bro, what? Dre: Yeah. It seemed like prices are de pricing is definitely being reset. I'm not mad about it because I thought stuff was a little bit too inflated, if I'm being honest. So I'm I'm kinda Brylan: So Dre: glad things are sliding a little bit. But the fundamentals are still strong. Brylan: Yeah, yeah, yeah. And so to that point, one framework that I've really used, there's this man, it's it's a freaking cheat code. It's called the Phoenix. they have like a like a whole like analyst program where they train a lot of folks that go on to be like equity analysts at like point seventy two, Citadel, a lot of these like hedge funds. And so I have been doing it and it's one of those things of like you would probably think that that world is like very complicated and it is, but I think it's made up of like Very simple things. And like one of the frameworks that they were teaching was like just whenever you have an idea or a thesis about the market, always map it back to is this going to impact the multiple or is this going to impact revenue? Because as you know, that's that's that's the value of the company, and that's all the stock market is. It's the value of the company divided by the number of shares to get the price per share, right? And I think if people did that a lot more. When you look you look at the world and these markets through that framework, revenue is not changing. Revenue is definitely going up. So why is are the value of these companies going down? It's the willingness to pay the the multiple that is what is changing and being rewritten right now. That eventually Dre: Mm-hmm, mm-hmm. Brylan: will change too. Dre: No, that's that that's fair actually. And speaking of that, I think this could probably be a quick thing to touch on. Like Bending Spoons acquired open table. And the reason why I think this is an intra Brylan: Good example. Dre: interesting entry point, right? Is because if you look at Airtable's revenue, they were growing revenue 20% year over year. In any business, if you're growing 20% year over year, that is a great business, especially as you start to hit scale. They were doing four hundred and eighty million dollars in revenue. So to set the stage, Bending Spoons, which is a a private equity firm, essentially agreed to acquire Airtable. They acquired them for one point two eight five billion on an enterprise value and approximately two point two five billion on a equity value basis. So Airtable was sitting on approximately nine hundred and sixty five million dollars in cash. And so the difference between that is essentially what they actually paid. For the for the business, which is 1.258 billion. And so when you look at what that looks like on a revenue multiple, on an ARR multiple, it's about 2.7 times. For businesses that are typically at their revenue rate and at their growth rate, I mean, you can easily see deals where the revenue multiple was what six can be up to six X or sometimes even more than that. I mean, you can see multiples between six and ten. But usually I would say between three and ten. So what does that mean exactly? That means that to Bryland's point, right? The the business is fundamental. It's growing. It's not like a stalling business or a business is dying. So Airtable seems to be growing at 20% year over year. It has 500,000 business organizations that are using it. Includes 81 80% of the Fortune 100 companies are using it. so it is a it's it's a growing business. But yet to Bryan's point, The multiples are starting to come down. And so this was a great opportunity for Bendis Moons to come in, buy a business. It's not really a turnaround story. A business is printing money, improve operations, and immediately start to see benefit. And then, you know, the other part of the story is that Airtable had also spun out a another product called Hyperagent, which is a platform for building out agents. I don't know exactly how well that business is doing. But that business was not part of the acquisition. So that product will continue to live on. And I'd imagine they're probably gonna go and raise significant capital for that business because we're in this, you know, AI, AI, you know, speed race right now. And so, you know, if you're working on anything with agents and AI, you and your founders like them, you should be able to raise capital. So they're probably gonna go raise a bunch of capital, recapitalize the business, a bunch of employees are probably gonna get some new equity in this new business and things will live on. So I think this is a win-win for the air table team. although at one point they were valued at eleven billion dollars. So this is quite the haircut from where they once were. So, you know, some of those late stage investors probably bought at a too high of a multiple. So they probably won't see much of anything. But some of those early stage investors definitely should be getting some of their capital back. So yeah, that's one of the big acquisition stories. Bendon Spoons has been on a tear in terms of acquiring some of these SAS products at at ridiculous multiples. so I'm excited to see kinda what where where this takes w where the story lands for Bidding Spoons. But at least the air table founders will live on again with another company called Hyper Agent. Brylan: Facts. Now I that one that that that one was actually very surprising. Cause I do remember when they got that crazy valuation during COVID period. Dre: Mm-hmm. Brylan: Yeah, so basically what was it like ninety percent of the value? Right? It that's what it dropped from, I think. Yeah. Yeah, yeah, yeah. Dre: Yeah, basically. Basically, yeah, it was valued at around I think eleven billion dollars at its peak. At the last fun at the Brylan: Yeah. Dre: last fundraising round, I believe it was. Brylan: So so so once again, I think, you know, for folks listening, the reason why yeah, the reason why I think this is important is because, at least for me, the way I think of multiple, I think multiples are a representation of sentiment. Like it gives you an idea of like what what is the story around whatever this whatever this kind of like asset is, right? Like if if revenue is the objective fact coming out of the company, then the subjective fact coming out of the or around the company. It's kinda gonna be whatever that sentiment is. And I think, you know, yeah, if we even remember during the crazy, you know, COVID periods of time, what was the sentiment? Sentiment was it was zero percent, you know, interest, all this venture capital, they were throwing it and giving all these type of crazy ass valuations, right? Now things have reset, especially on those companies that, you know, did face that. Like I I was even thinking about this the other day. Y'all remember when Clubhouse had a four billion dollar valuation? Rodney: Nah, yeah, yeah. Dre: I f I forgot about Clubhouse. Are they still around? Brylan: Yeah, bro. What would they sell for Rodney: Yeah, I think so. Yeah. Brylan: today? Dre: Crazy. Brylan: Ha ha Dre: Twenty million. Rodney: Few wan f yeah. Yeah. Twenty million is crazy. Dre: probably twenty twenty twenty twenty you'll probably get it done. Bro, I Brylan: Twenty Dre: this is bro, this is a lesson. Bro, Rodney: Tony is crazy. Dre: you know, you know what this really is a lesson in? And and and people who want to aspire to be founders should really like take listen to this. Private market valuations by investors, like specifically startup investors, are not real. They're fake. They're made up. They're not real. Nobody can justify to me how an early stage startup with zero in revenue can possibly be worth 20 million dollars. In what in what world? Just in what world? That's that Rodney: Yeah. Dre: don't even make sense. Nobody, nobody in their right mind would buy that company. Nobody would actually acquire that asset for that. Unless you're talking about the talent, right? But but that's not really a lot of these companies are are typically valued Rodney: Clubhouse Clubhouse got no talent. Dre: at. You know what I'm saying? And so It just goes to show that these val that there's a a a huge disconnect between private markets and public markets in real business. Because in real business, companies trade at real earnings, real revenue, real growth. and not these fictitious like ten X numbers that a lot of early stage investors, late stage investors subscribe to a lot of these startups. And so I think you're gonna see even more of this. And I think there's even more opportunities for other bending spool type companies to come into the market and acquire the VC graveyard. Because there's tons of companies Brylan: Yeah. Dre: are probably doing, you know, what, I say fifty to you know, five hundred million in revenue, that are not worth nearly what they last raised at, right? But they're still growing businesses, right, or steady businesses. Have good cash flow, right? And have the potential to be profitable, if not already profitable, if you can just cut expenses. And we've already seen how Elon came in with X. It's possible to do that within software. You don't need hundreds or thousands of people to build software. You just don't, right? Like it's just we we're just not in that in in that in that place anymore. And so yeah, I I I just think like if again, if you're trying to build a startup and raising money from investors, do not let those valuations go to your head. Don't let that start making you believe that you have something worth more than than what you have. Because Brylan: Yeah. Dre: at the end of the day, when it comes to liquidity, when it comes to cashing in the check that you're being sold to by investors, that shit is not gonna cash for what you think it is. So for most, right? and that's what the ones I'm speaking to. For the most. There's the 1% that will, but that's not the ones we're talking. Rodney: A another another lesson to take is that Know when you're at the peak of the hype. Know when you're in the peak of the hype. Know when don't buy into your own hype, essentially. Know when it is hype. Double down on that hype. Get as much money as possible. Get your valuation as high as you possibly can. But also learn the art of the exit. Learn Brylan: Yeah. Rodney: the art. Of accident in the midst of the hype. And I think that's probably more challenging than it sounds because what founders usually go through is they go through these long periods of no hype, or long periods of nobody caring at Brylan: X. Rodney: all. And these long challenges along the way, or multiple different failed startups before that start, before the the random startup works or the random idea works. So when the hype happens, I think a lot of people think, it's gonna keep going. And don't be the one pass the bag off, pass the asset off, sell sell it, sell it, get learn art of the exit. The art of the exit don't don't listen to anybody that says you have to do a 10, 20, 30 year plan. J just really try to see if this is something that has a long, long-term place. But I think, for example, I'm not gonna say that it would it would be easy for Clubhouse to see that, 'cause at that time, it definitely was coming off. Like that might be a new way for people to communicate and hang out. It it it was coming off that way. So I don't wanna make it seem like it would be easy. It's i in hindsight, it it's a little it's easy to say now, but if if possible, learn the art of the exit. Like Dre said, the valuations are not real. They are based on hype. They're based on at some point they get a little bit more real as you as you well, it depends. It depends. Some companies have a little bit more closer valuations to to reality. But the fact of the matter is they don't have to be real. So that's so so that's the thing. Brylan: No, that's that's that that's Dre: Yeah. Brylan: that's spot on. Dre: And this is a good business. I mean, they had nine hundred plus million in cash. Like they had they had raised a total of what was it like? they raised approximately one point three six billion. And it was sitting on nine hundred and sixty-five million Rodney: Yeah. Dre: in cash, growing twenty percent a year. making five hundred million in re this is not again that's this is not a shitty business. This is not a business is dying. This is not a business is dilapidated. It's been ran into the ground. No, this is a well ran business. It seemed like they've had good financial discipline. They've had apparently great execution, right? To get to five hundred million in revenue in and of itself is is is is is a milestone to to to be applauded for. So This is a good business, man. I I don't know. I I think something's definitely happening in the market where SaaS companies are being re rated. And so I don't know what that means going forward, but if you're running a SaaS company today, I think you at least gotta be questioning what your real value is. Brylan: Facts. I will say this though. I will say this though, in relation to SaaS. I think there's a handful of SaaS companies in the market, bro. And I think I came out here a few a few weeks ago and was talking about Figma. So yeah, I'm running I'm running a Figma option plate right now. I think I've been holding this position for yeah, I think I got it in like May or June. Yeah, I want to say it was May, is their last earnings. but I'm already up like 70%. And the thing that I wanna say is because I'm telling you this just frame of mind of like looking at things through multiples and revenue. Multiples in revenue. Figma, they like Figma is what the market story looks like looks like now. Where Figma literally has been growing their revenue, but because of the AI narrative. They're shit tanked. And it was literally all multiple. And if you think about what's happening to these AI companies today, revenue is growing, but capital is shrinking. It is all tanking. I'm telling you, bruh. Go find those type of opportunities. And they exist not only within the AI kind of landscape, but there are a few companies within that SaaS kind of like category where they have, at least right now, I would say in the medium term, proven to be durable, despite you know, maybe some products coming out there and saying the narrative then being like, Anthro Optic or whoever was gonna take take that over. It's not showing up in cash. So I feel like there's this opportunity to be able to discern between what is the narrative on Twitter versus like what is the narrative coming out of their cash machine. Like if you're willing to go look at that bro, you can find some real good opportunities. Dre: Let me ask you, do you how long similar to kind of like we're running say, which like you gotta know when to leave the hype, right? Brylan: Yep. Dre: And do you think at some point do y'all think at some point the narrative around the killing of these SaaS companies will come true? Meaning like maybe companies won't need Figma for whatever Brylan: Mm. Dre: reason. Maybe there will be a replacement, whatever that looks like, right? Maybe companies won't need Airtable, because that'll be replaced. Whatever that looks like, right? So do you think some of this some of the sentiment from these investors, although I although the fundamentals seem sound today? I think the real question for a lot of investors, especially like the institutional investors, is that forward looking forward looking position, right? These investors in Brylan: Yeah yeah. Dre: the public market are not really focused on the today, right? They're really looking at five years out, maybe some even ten years out, right? Will they maintain their same position? Will Airtable be growing at twenty percent in the next ten years? Will Figma be growing at whatever its rate of return is now over the next ten years? Or will there be a different stacking of software as a service tools in the next five years. Rodney: That would be so challenging 'cause you because because we're seeing so much changes in the way software is even made and the speed of it and et cetera. It'd be so challenging. Ten years is like it's so hard to even to to fathom. but five is a bit easier. And I would say that I think that Figma would be okay. I I don't use Airtables much, so I don't really know as much about Airtable. I've used it before, but it it honestly I'm surprised it's worth so much. It's so it's so simple. It it's it it really is they don't seem to have done nothing Brylan: Every VC uses it, bro. Rodney: innovative. I don't they they they they don't seem on the surface to have done anything necessarily innovative, but I'm not aiming at all. That's it for them to get successful. Brylan: What they they from a design perspective. Rodney: With what what they have, which is basically a better Excel. Ex what I it looks like a better version of Excel. Or like an easier to use Excel. And that's not like that's not saying much to me, but you know, shout shout off to the 900 million in cash. I can't say nothing to that. but I think Fig Figma, even if in the future you can make software on demand, the thing is about Figma is that. It's not at this point, it's not just the app itself, it's these integrations, it's these plugins, it's these MCPs, it's all these different things. Basically, Figma as a platform, and I think that will give Figma the longevity. whereas before, many things were just the app. So Photoshop was just Photoshop, Sketch was just Sketch, Zeppelin was just Zeppelin, but Figma is the app itself, but then all these different plugins and and integrations and different so it to me they are building up a a platform play. And that to that I would say is five years, potentially ten years. Dre: Yeah, that makes sense. That's the same thing that's happening over at Uber right now. Again, I I mentioned earlier they they announced their earnings Rodney: right. Dre: the same thing, right? Business is going crazy. And investors are asking the same thing about Uber, right? Like we're Uber's business. We talked about Waymo, right? We know what Doordash is doing. They just launched drone delivery for food. They've expanded their categories. So they're getting a lot of competition. So you're right. The next five to ten years is it's hard to see. but yeah, man. Now I I it's never been a more exciting time in in in technology than than now. Rodney: Yeah, seriously hasn't. It really hasn't. It really hasn't. Brylan: Do I do want to say this though, like say for example, like Figma, right? With Figma, I think I think Figma is actually gonna end up having a pretty durable business, man. Just because I actually had this insight recently, just because I've been doing a lot of like the automation and building out like different agentic like workflows for the company. and and so as I'm rolling it out to different folks on the team, it's just this aha moment of like, yeah. Once again, we talk about on this podcast that we are a part of the 1% because we are using these tools so often and in very like strategic and practical ways. Everybody's not doing that. Most people are barely just got the prompting. You know what I mean? And so I'm I'm I'm reminded of that where it's like, I don't think we can just assume that everybody's just gonna be like, well, guess what? We gotta we got a design team and we need something like Figma. Here's how to do it. Because it does take a lot of back and forth. But I think the other thing too is like if you look at cloud design versus Figma, where Figma is really starting to dominate, is on two fronts. The first one is being enterprise explosion, and then the other one is being token explosion. And the reason why these two things are important is because how they have their deals set up, like specifically like their pricing plan. I think that is the beauty of Figma's business model is the pricing because they force you to upgrade. In order to kind of get access to like the full suite of features that would really enable you as an enterprise to be able to use the product. But within it, you have the Figma make product, which is like their AI stuff. And they just started charging for it back in like March. And it's crazy because like that usage, although it's once again still small number, it is it is growing quickly, bro. It's growing quickly. Dre: Mm-hmm. Brylan: And so that's that's where I'm bullish on Figma is I think Figma will survive long enough to be able to continue to grow and eat up a lot of like enterprise because they do have free accounts, but those free accounts are like nobody's paying them. Those small businesses that are using them, they're not bringing in revenue. But what will eat up those free accounts and potentially slow down Figma later down the line will be, I think cloud design will make sense for like if you're a small business mom and pop type of shop. And Dre: Mm-hmm. Brylan: so I think they're going after two different tiers of market and because of that, Figma will be protected and that revenue will continue to show up. Dre: Yep, yep. I can agree with that. Well we'll be watching and we'll be monitoring and continuing these conversations. I think it's interesting what's happening right now, between private and public markets. yeah, is there anything else we wanted to cover? What y'all think? Rodney: I think we we we covered a good amount, guys. Brylan: Yeah, this was good, bro. Dre: Good to go. All right. Brylan: Yeah. Dre: I'll catch you all on the next one then. Brylan: Aye.