I see a large IPO on the horizon.
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>> Clearing order inbound.
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Trust the experts here.
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>> UAV online.
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>> Double blaze.
Triple blaze. Double kill.
Finally, top is wins.
Team Deathmatch. We are experts.
Triple blades. Master right.
Hockey clearing order inbound.
You're surrounded by journalists. Hold your position.
>> Strike one.
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Activate golden retriever mode.
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Five.
Cortisol rising. Cortisol swing. Founder.
>> You're watching TVPN. Today's Tuesday, May 26th, 2026. We are live from the TVP Ultradome, Temple of Technology, Fortress of Finance, the Capital Capital.
>> We're back.
>> We're back.
>> A lot of complaining around the office this morning.
>> Oh, yeah.
>> Team was upset.
>> They said two days is the perfect length for a weekend. Three is just too many.
>> Too many. It's too many. So, we're glad to be back.
>> They're back.
>> Uh, and Ferrari's back with a new electric car.
>> Are they back?
>> That's what we're going to debate. They're certainly they launched it. Uh, Ferrari launches a $640,000 Jony Ive-designed glass-clad electric speedster. They're calling it the electric speedster. I was not uh I I journals.
>> It holds five seats. I wouldn't I when I think speedster I think smaller. I think two seats. I think Porsche speed.
>> It is quick. It is speedy.
>> Well, have they actually released numbers on how quick it is? I know that they mentioned that it has 1,000 horsepower. Uh, we would assume that it's quick, but who knows? We don't have a Nürburgring time. We don't necessarily have a 0 to 60 time. Uh, we will see, but we do have some good coverage from the Wall Street Journal.
>> There is a 0 to 60. What is it?
>> I think they released it. It is more performant than I believe the Model 3. I will confirm.
>> Model 3 or the Model S Plaid?
>> Well, that's a good question, John. Because the Model 3 is not like base model 3.
>> 0 to 60 in less than 2.5 seconds.
>> Okay, that's not as fast as a Plaid.
>> That's uh Yeah, that's that's sort of surprisingly low. Uh or surprisingly high. Anyway, uh named after the Italian word for light, the Luce will test or is it Luce? Luce will test the appetite of the super rich as EVs have fallen out of favor in the United States. It'll be interesting to know where when did this start because there has been a big shift and it happened somewhat quickly. It feels like it's been like the shift away from EVs happened over a year or two, but the design timelines for a project like this might be five years, might be even longer. So, uh let's let's set the table with the Wall Street Journal article and then we can go into your take uh just so we have a little bit of context here. An electric vehicle big on glass, light, and space. This isn't your father's Ferrari. On Sunday, Europe's most valuable automaker took the wraps off.
>> Yeah, Ferrari has been a It's a big company. It's a It's been a successful The Market Cap's been huge. Like, it's grown a bunch. The Acquired team uh did a great podcast explaining the whole history of the stock is down 5% today.
>> 5% today, but it's still what what is it? How 62 billion.
>> That's not bad for for I mean, I feel like a lot of other car companies are sort of beaten up and much smaller based on their uh their volumes. 30% over the last year.
>> Okay. Okay. Does that make it an AI winner? Who knows? Uh so, uh named after the Italian word for light, the Ferrari Luce will test the appetite of the super rich for EVs when electric vehicles have fallen out of favor in the US, the world's top top market for luxury cars. Designed in partnership with celebrated Apple alumnus uh Jony Ive, the model also represents a leap into a new technology built uh for a brand built over decades around the size, sound, and sensation of traditional engines. The Luce will be among the most expensive Ferraris that aren't a part of a limited production run. So, it's an unlimited production run. They will be making as many as there are demand for. They'll make a bunch. People will will hopefully come and buy them. If they do, they'll make more. Uh the production might end up being limited depending on demand.
>> I think you can see where Jordi's take is going. Uh but uh the the the interesting thing here is that uh Ferrari uh typically has sort of two tiers. Limited production runs. That's the F40, the F50, the F80, the LaFerrari, the Enzo Ferrari. These halo cars, these hypercars.
>> SF90 was interesting because it was a one level above the sort of base model mid-engine sports car that they've made in the lineage of the 360, 430, 458, 488, and then 296.
>> 296, which is unlimited production, but at the lower end. Lower end still $300,000, but it's at the lower end of the traditional mid-engine sports car, tossable, not fully track focused, but it's a sports car.
>> And then the SF90 came in as sort of like this mid-tier, higher-end, more expensive, twice the price of the of the 296, but unlimited production run. So, by getting one, you weren't locking yourself into a very tight allocation. And that of course led to some serious depreciation in the SF90 market which has been sort of heralded as a as a crisis for Ferrari. And uh this doesn't seem like a response to that. This seems like a continuation of that potentially. Um but anyway uh the company's starting price will be €550,000, roughly equivalent to $640,000. That's more that's a lot of money. That's more than the SF90. That's more than the uh the Dolcevita. Uh more than the 296.
>> More than the new Testarossa.
>> More than the new Testarossa. And also more than the Purosangue which is V12 naturally aspirated.
>> And and also but the Purosangue only has four seats. This has five.
>> So you're getting an extra seat for just $200,000.
>> Under 200 grand.
>> It's it's a wild value prop. Uh the launch event uh stadium uh took place in Rome in a stadium with a towering concrete sail that was opened for the Vatican's uh 2025 Jubilee. Featured tortellini by Italian chef Massimo Bottura uh clips of Formula 1 stars Lewis Hamilton and Charles uh racing the car and lots of lights. I want to see this what this car actually looks like on the track. I haven't seen a video of that yet. Uh the unveiling sparked a debate among car fans online with many pillorying the design as too far outside of Ferrari's design traditions. Ferrari's Milan-listed shares slumped around 6%. Uh Ferrari has framed the shift as a chance to experiment. We wanted to do what we hadn't been able to do before, said Ferrari chairman John Elkann. Uh let's see. The Luce is Ferrari's first ever Ferrari with five seats, an option ruled out by the axle in its traditional powertrain configuration. So, if you have a family of five, this is your only option. Uh despite the roominess, the EV accelerates from 0 to 60 uh in less than 2.5 seconds.
>> If you have a family of six, you could pick up two of these for just over 1.2 million.
>> Yes.
>> And and you'd still have some room for friends.
>> Husband and wife, his and hers.
>> Yes.
>> His and hers Luce. Uh yeah. Wild, wild prop. Also, yeah, I mean, uh top speed's 190, top speed in the Plaid is 200, and top speed in in many uh you know, Cadillac CT5-V Blackwings maybe more than I did. I did confirm, by the way, that it is uh half a second slower than the Model S Plaid.
>> Yeah, which is I mean, yeah, it's it's at that point maybe you don't really recognize it. Maybe you can't really tell. Problem. The problem is is they the the range is worse than pretty much everything BYD makes, pretty much everything that Tesla makes and a lot of these other manufacturers.
>> Uh but they could always argue, no, but the performance and uh and I don't think for this kind of car buyer, yeah, performance matters. What is performance? Is it acceleration, straight line speed, how it handles in corners? Right. This car is not going to be track weapon. I don't think not yet. But we have some body kits that might help with that. Take it out.
>> See, you put a weight on this thing. Anything possible to me.
>> So, yeah, the range is what you were getting at. 330 miles despite an unusually large battery. Latest releases from BMW and Volvo run for more than 500 miles. The Lucid Air Sapphire is over 500 and uh many Teslas can get up into the 400 something range. 330. Totally usable for most people, especially if you're charging at home. Totally fine if this is a daily uh and you, you know, want to drive this around, but it is it is sort of in search of a like how does it fit into someone's life? Because again, it's not designed for the track. It's not designed for the straight speed.
>> I overall I think it looks pretty cool. It looks unique.
>> Yeah.
>> I don't I don't see it and immediately want it. Like uh there's been plenty of other modern Ferraris that I think look amazing. Even even many of them have gotten quite negative reactions.
>> Uh so so overall I think the design is interesting. I think the interior is obviously cool. We talked about that. I was somewhat worried that the interior would maybe not match the um I don't like the two-tone thing, but again that's just sort of like a modern Ferrari delete. Like I like I think it will look really cool if it's entirely black, right? Murdered out.
>> A lot of people are saying that will look uh quite cool. Um but yeah, the the main thing is like the this entire that angle looks great, by the way.
>> Mhm.
>> But not $650,000. Great. Uh it's certainly the most confusing release from a major automotive manufacturer that I can ever remember. Right.
>> Who is this? Who is this for? Like coming out and significantly like right away I'm like am I am I am I crazy? This is like costs more than the Purosangue 12-cylinder uh the Testarossa all these other cars that didn't get amazing reactions but I think are like very very cool seeing them in person. They look amazing.
>> They I think they they're fantastic. Um, what a confusing what a confusing gap between like seeing images and videos and pictures of cars and then actually seeing them in person.
>> Uh like often times when you see something in person, you're standing there and you have the sense of perspective. They can look a lot better. Sometimes they're going to look worse. Um, one of the other one of the other challenges is, you know, Ferrari, modern Ferraris have had outside of their halo cars have had, you know, pretty massive depreciation.
>> And uh what have EVs become synonymous with?
>> Depreciation.
>> Appreciation. So, this car, yeah, like the Purosangue, I don't really know how it's going to hold up.
>> It is naturally aspirated V12. It's probably going to hold up decently. You're still going to be able to buy Yeah, you're still going to be able to buy it unlimited. You're still going to be able to buy one for probably $350,000 like Yeah in the next couple years. But this I can imagine just getting cut uh getting cut in half like quite quite quickly. I expected it to come in, you know, not not a very informed uh view, but I I expected them to come in at maybe something in like the $300,000 range, right? Something that is would be a very expensive daily, but something that somebody could compare. Oh, should I get Yeah. Should I get a a Roma? Should I get, you know, a Taycan Turbo S if you want an EV? Oh, should I stretch a little bit and get a Luce?
>> Uh and and again, I just don't know. I just don't know who this car is is for. I hope that there's enough Jony Ive fans to make this sell. My the the the sense I get is like I don't think Ferrari would have started this project and said, you know, we've always wanted to make a $650,000 daily EV.
>> That's been the car. That's been the car. And it seems like they started this project and they're like, let's make an entry-level ma that the closest thing Ferrari has to a mass-market car, a car that you can daily, a car that is is unique, really thought through from the beginning, right? This idea of combining EV with a Jony interior is like a cool concept. And then you could imagine they start and they're like, oh, we're going to be able to hit 350 for or we're going to be able to hit 300 for sure. Okay, maybe maybe it would be more like 350, but like still we're in the range. And then it just starts like ticking up and up and up and up and up until how do you how do you how do you just how do you justify the price? It makes no sense. Uh and it's very it's very cons I saw when you're laughing.
>> Hunter Hunter be kind. Um uh it's it's a very it's very concerning because I just think it it's basically proving that Ferrari I don't think can ever I don't think they'll ever be competitive in EVs, right?
>> This segment.
>> Yeah, this segment I think it's I think it's completely over like really hard to compete in. You're going up against Tesla. This vertically integrated like comes with like if you want a daily you also want self-driving capabilities. You also want the oh park it auto summon like you know you want to be able to like all these like random features that Tesla puts in like take your CarPlay the games like very functional.
>> The thing with the is the design like there's so many elements of the design that are super tactile very cool it's quirky.
>> But Tesla has done a very good job of making a a car that is very drivable it's it and it can be quirky if you want it to be has sound effect.
>> The sound effect board. It has a sound board. Like if you want the quirk, you can get the quirk.
>> Uh so yeah. So so I think it's I think it's over. I think I think take me through your take from start to finish. Uh and then we can do we we've covered we've covered a lot. I basically said like look the the peanut gallery is already very negative on all Ferrari launches. Every single time every single time they say bring back Pininfarina. Pininfarina is not coming back. Like the whole company got sold to an Indian automotive conglomerate. Tata Motors, they they they launched the Pininfarina Battista.
>> So if you pull up the Pininfarina Battista, if you pull up a picture of that, you will see uh an image of an electric hypercar that looks exactly like you would expect in the sense that it's the car that would go on a poster on a kid's bedroom. Uh but it's a million dollars or more and it goes 0 to 60 in two seconds. Uh and the reviews are kind of like, yeah, this is the max. Yeah, the Pininfarina Battista right there. Like that looks like a McLaren, like a Ferrari. Like it looks like it looks like if you went to ChatGPT and just said, like, make me a hypercar. And I think it checks the box. And I think the Luce does not. I think if you went to ChatGPT and said, design me a hypercar, it you could you could sit there for for days and not get something that looks like Luce because it does look different. And that can be good. It can also be bad because people are expecting this. But this car, I don't think sold very well because the buyer for this design wants a naturally aspirated V12 with a manual shifter, right? Uh and they want something that's that that's more focused and more uh of an experience. They don't want something that's practical at all. Yeah. Um so yeah. So so so anyways, people are always negative on on on recent Ferrari launches. I don't I I usually don't agree. I think a bunch of them have been great. Uh and but but the anger towards the design I think is totally misplaced. You got to be you got to be like disappointed uh in the price.
>> Uh the gap between what you can get from a range and performance from from Tesla or BYD, let's say in the $50 $60,000 range, you're looking at a 10x difference, right? Uh and and that that gap is just way too wide. So, I think that if they had been able to come in in the low 300s with this, it would have been super desirable, quite functional, right? This is a great great commuter. We would have been seeing these all over LA.
>> I think this is going to flop. And I actually think that if Ferrari wants to be competitive in this sort of like mass-market EV category, even like luxury, you know, luxury um uh not not necessarily true mass-market, but um but more uh high-end. I I think they would have to at this point like partner with like you could imagine them partnering with with someone else and effectively just saying like you know throwing in the towel. I think they still have a fantastic business focusing on the the higher end of their range. Even think of what a high-end driver-focused sedan four-door five-seater sedan is because typically the when you get to five seats four doors upmarket expensive luxury you just go SUV so you have like Range Rover and Urus from Lamborghini and you know Aston Martin is pushing that way like it it feels like this is a very like the four-door expensive four-door is is rare.
>> Yeah. And I think it's very differentiating the Purosangue. Personally, I would have liked to see something that was like like sportier than that.
>> Uh yeah, it's very supposed to be.
>> Yeah, but but it's an SUV from Ferrari. Something a little bit more aggressive. Personally, I would have liked it. Came off very cute.
>> Take out the second row. Take out the two seats.
>> No, no. You can make a sporty a Cayenne Turbo GT is a sporty stock carbon sporty fast SUV.
>> I I just feel like with the the Purosangue, it's like the like like the 296 is right here, sir. If you have any complaints about it being an SUV, like they do have a they do have a sports car for you if you want that. The question is just like if you want if you want performance, you go sports car. I'm just saying.
>> I'm just saying I think they they they uh they kind of missed on both, right? I think if they made like a super if they made like an aggressive if they made the Purosangue but it was like more aggressive I think it'd be way more desirable.
>> Wait, are you talking about the the stock Purosangue or are you talking about the Puganator the Mansory modified Pugan the Puganator?
>> I think I think Mansory has a body kit for the Purosangue that's uh called the Pugan.
>> Which is such a funny name.
>> Yeah. So so anyways, uh big big big big L uh and uh I think that uh that will become very obvious in in you know the the coming years they are going to sell some I expect Cortina to be crawling with with Luce. Uh but and I was thinking I was like who is when I thought about who is a buyer for this it's like foreign exchange student in the US that needs a car for like a few years instead of like a black badge Cullinan or Exactly. Exactly. Um and but but that's not a big market.
>> Yeah. It's just hard because I understand the like the concept of like the the the when I when I imagine like the the Cullinan like driving on the sand dunes in Saudi Arabia. Uh it just has such a different vibe. It's so it's so much more regal and royal uh than this design. This this design is is so much more friendly. We can actually go and look at the fact that you can. It's like, hey, luxury car buyer, would you like a Rolls-Royce Cullinan or a Ferrari Luce?
>> Yeah.
>> Which is a just extremely millennial-coded car.
>> It I mean, it has a lot of the Apple feel to it. Uh a lot of people were making I had I had a theory earlier that maybe maybe the real cost maybe it's like a $50,000 car, but making a custom iPad and you're only going to make a very small number of them. You're only going to make like it's a $500,000 interior.
>> No, it's a $600,000 iPad.
>> Okay.
>> You know, the the the in the front console.
>> Yeah.
>> So, it's a it's it's basically like a Model 3 and then a and a $600,000 iPad combined, right? Because I don't think they're going to be making a lot of these.
>> I really wonder how they're going to how they're going to drive. Uh you want a safari version, right? That's the ideal.
>> I do. I do. Sam Sam Schaffer was sharing uh the like what does it look like if it's all black?
>> And yeah, I went in there. I was like, make it make it a make it a safari version. Get some bigger wheels on it.
>> Expand the wheel wells.
>> Expand the wheel wells. Basically do another 300 grand of work to and make it a million-dollar Luce. Add some add some equipment.
>> You know what this looks like? This looks like that.
>> Pull pull um pull this up. This image.
>> Um what was the uh what was the Lamborghini electric one that they were working on? The Lanzador. It was like a big car. This was like a theme for a while. I don't think it ever went anywhere. I don't know if you saw the Lanzador. I can I can share it in the thing. Um there it is. So, this is Yeah, I think looks this looks cool.
>> Again, having a car that's designed to go off-road that only has a few hundred miles of range.
>> It's kind of a crazy move.
>> It's kind of a crazy move, but I could see people take the people take the Rivians off-road and they're very good at because you can I mean this this car has four electric motors, one in each uh wheel.
>> Yeah, the Rivian can adjust the torque independently. So if you're losing grip on one rock in particular, a Rivian at the Fat Ice Race in Big Sky was going absolutely crazy.
>> Really?
>> It was It was It was extremely impressive.
>> Yeah, it's designed for that. Uh pull up the Lamborghini uh Lanzador. This was uh the uh Lamborghini's electric concept that I think got scrapped uh but might still arrive in 2028. I just shared this image in the uh production chat um because it has this idea of like the big car. It's like have you seen this? What what are you laughing at?
>> 2.6 says that looks sick. Oh wait, it's an EV.
>> People don't like electric vehicles. Uh I mean great for great for daily commutes, great for you know high gas prices. This Lanzador, you saw this which they discontinued because they realized it was going to flop extremely hard. So, but it sounds like Ferrari's is fully moving forward with this. They're going with it.
>> Yeah. I mean, all the EU manufacturers are This is this is a very high-up car. Like, you're very high up.
>> They're caught between a rock and an and a and a EV, right? Mhm.
>> Uh they there's basically I was I was trying to was asking Chad about the um uh about like the the reg you know regulatory situation and basically the EU regulates average CO2 emissions across each manufacturer's new cars registered in the EU.
>> So it's not like model by model. It's like based on all the cars you're selling in a given the new cars you're selling, you need to be under certain emission standards across the entire fleet. And so if you sell a handful of EVs, you can bring down the average a lot.
>> A lot.
>> Okay.
>> Uh and so so yeah, maybe they only sell a couple thousand of these, but it's enough. But yeah, it seems seems seems tough. Uh we texted one of our buddies who has maybe 30 or so Ferraris this morning. Uh and uh he will be buying one.
>> He made a good point.
>> Whether it's He made a good point. Anything that's uh you know hated at launch has the opportunity like the expectations are low has the opportunity to become like a cult classic at some point. There's a lot of cars that launch and people are like this is what happened with the Carrera GT. People were like it doesn't look any different. It doesn't look as extreme. It doesn't stand out if you're stopped next to a 911. Most people will just think it's a 911.
>> Think you think in in 10 years we could be looking at Luce going for two three million?
>> Probably not, but who knows? Maybe 20 years. I don't know. It might be like an interesting relic of a particular era.
>> Pull up this post from Rhett.
>> Yes, I like this version.
>> Clear plastic. Leaning into the vibes of leaning. Just lean into the plastic. Yeah, there's something here. People were having fun. I mean, it's a golden age of uh Gen AI images. Uh someone else was comparing it to the Luca, former chairman of Ferrari, which Trey mentioned in the chat earlier in Italian. He says, if I say what I really think, I'd be doing Ferrari harm. You risk destroying a legend. I'm very sorry. I just hope they at least take the prancing horse off that car.
>> Wow.
>> What should we do? This for sure is one car the Chinese at least won't copy off us.
>> Wow. Those are very very harsh words.
>> He of course worked under whatever whatever uh journalist went out and hunted down uh Luca the former chairman of Ferrari like really knew that there was like a scoop to get here because this is not a seated interview. This is not planned. This is an ambush. And he was he was struggling to not completely blow things up and yet the body language of him like touching his head he's he's not uh TJ former uh F40 360 owner has driven most modern Ferraris so he he feels uh is very qualified to chime in he says apparently an unpopular opinion but I think that it's great interior fully Jony exterior totally Mark see the Ford concept which we can pull up. I imagine for the OCD types, the daily interactions are going to be quite satisfying.
>> Yeah. Yeah. That that is the it is an extremely unique interior and things are experiences. This could be something you get to experience all day long. Uh I'm excited to drive one. Uh I won't be buying one.
>> I won't be withholding judgment. I won't be judging a book by its cover. Um yeah, TJ says, my opinion is is in 10 years time the Jony Ive Ferrari design will be the main business at a price point of 150 to 250k equivalent and slowly washes out Ferrari as we know it. Launching at today's price point preserves the dying core biz while they transition to an Apple-style business. Uh I would uh TJ knows a lot more about cars than I would. I would take uh but I would take the exact opposite.
>> So hard to do.
>> I would take the exact opposite. I think this is going to be more and more like an ultra-luxury brand. Small number of cars at very very high prices. Yeah.
>> For hardcore enthusiasts.
>> Yeah. SP3 F80.
>> Yeah. Just getting back to what like the next SF enthusiast limited and manual and naturally aspirated and like they're already coming back. They're making they're making a version of the 296 without the EV componentry.
>> Sure. So so yeah, I would take the exact opposite side of this unless Apple or sorry, unless Ferrari, you know, does, you know, does something like effectively a licensing deal and says, hey, we can't make a car for this cheap, but we can license the badge and BYD can make a car for 50 grand and then we'll charge 50 grand a car to put the prancing horse on it.
>> Yeah. I mean, and that would be full. So, Waymo is sourcing uh the powertrain and battery from Chinese EV manufacturers, but none of the telemetry telecommunication systems, IT systems, that's all Waymo. And so, you get all of the benefits of the Chinese industrial supply chain. You get efficiencies around batteries and cheaper frames and power trains and drivetrains. Uh and the batteries, but you don't have the oh like the Waymo spying on me because the cameras were made there necessarily or like the whole car was made there. And so I think Waymo's been very quiet about this. Obviously, they're not really like openly talking about this decision, but I think that they that they picked a very clear line in the sand with where with what parts of the Chinese supply chain they would go into because the whole like Waymos are Chinese cars would be like a bad headline. But if they can say, well, we're just buying things there that don't they can't have any spyware in there because it's just a bunch of aluminum and battery packs or whatever. I think that will at least I think that's their strategy. Yeah, people people people will still be suspicious of course. Um but by and large I think people will be happy. Uh we should pull up the Ford 021C concept car designed by Marc Newson who works with Jony Ive and did the exterior of the Ferrari Luce because this car is so cool. I think we were all looking at this and really enjoying this. Uh it's the uh the Ford 021C concept car. Uh as uh TJ pointed out, Marc wanted to create a car that was simple, likable, and fun. Built at a historic uh coachbuilder in Turin, Italy, Marc developed a car via drawings followed by computer models and finally created a clay model to perfect to perfect complex surfaces. Um to perfect complex surfaces. Every component of the car was designed and fabricated from scratch from workshops all over the world. The tires were custom made by Pirelli in in Italy, for example. The composite exterior featured seamless shapes and deceptively simple surfaces, including a wraparound retractable trunk that opens like a drawer and a door handle and door handles that are simple aluminum buttons surrounded by translucent plastic rings which illuminate when remote locking is activated. The doors themselves open to expose a completely open pillarless interior. The windows were designed to allow as much light as possible to enter. This was done in 1999.
>> Absolutely hate this car.
>> They hate the clown car.
>> I think this would be a fun weekender.
>> Yes. But this is th this should fit into like the Volkswagen ID Buzz lineup which at 60,000 at 70,000 was deemed like woefully overpriced and should have been more at like 30 or 40. And so some a design like this could be amazing but again uh price is everything here because for for something like this it it can be this like delightful utility this fun thing similar to the Volkswagen bug. I would instantly pick up the Ferrari Luce for 20 grand.
>> Many people would.
>> Uh Sheil asked ChatGPT to make a four-door electric Ferrari. It's pretty good at this. I bet this version would be popular than Jony's. This thing looks mean.
>> It looks like a Dolcevita a little bit.
>> Yeah. Mixed with also it's just it it's it's so clear that it's not electric like like why would it have this big long front hood it looks good John and it looks good because this is what you're used to but this looks like a 200-inch car like as a daily this seems like it would be wildly impractical in terms of parking and dealing with everything and it looks perfect and also it feels like it has a lot of downs the new images model is so good at making cars You almost think that Sam was pretty involved there potentially. Um, are you talking about Nikita Beer's car?
>> I mean, this thing looks fantastic. Bone has got to make this. He They need a production version, I think. What do they call it? What did Bone call it? The Nikita Borata.
>> Borata.
>> I mean, I mean, it looks sort of like a Nissan Murano CrossCabriolet. This looks absolutely goodness in the front is very very funny.
>> Incredible.
>> Yeah, if it was the Apple car and priced for scale, this thing would go triple platinum uh in all white with um with the Apple logo on there. This does feel like a little bit of uh a lot of Apple leaked in this thing. Bobby Good Latte says, uh, my theory on the Luce. This is the car Jony wanted to design for Apple. Apple didn't want to ship it, so he made it for Ferrari. This car with an Apple logo priced at $100,000 would sell extremely well. I wonder I wonder I I wonder if you can get to a place where the fit and finish and the the OCD that that that's the like the daily interactions that's the piece that uh I'm not super clear on willingness to pay for that because with a phone you're using it just as much as a car but I don't know there's something about like iteratively onboarding to the the little features in the iPhone that create this lock-in. Whereas people go and they test drive a car and maybe the uh maybe like the the window switches are in the wrong space and it's slightly annoying, but they don't figure that out until much later, you know, or like the the uh the the volume knob is in slightly wrong place. It takes a long time to like become frustrated with that. Um I it would be hard. It's a harder pitch to make to a new car buyer. Like, oh, this won't have any frustrations. Those minor frustrations that you experience in other cars, like that won't be a thing here.
>> Yeah, I do.
>> I don't know. I do find that a lot of uh my frustration with modern cars comes from the software hardware integration, right? And this dynamic that we have now where where the the manufacturer has their software stack and then they also have CarPlay and they're constantly basically competing. Yep.
>> Uh and it makes absolutely no sense. It's like I'm in CarPlay. Like car I just bought like a week ago. I'm I'll be in CarPlay and then I'm like, oh, I want to change like the the heating or air conditioning. I got to get out of CarPlay to go and do it in like their software. It's very very annoying. Um, and so yeah, Apple Apple would make a uh a fantastic car, but even I just don't know with Apple part of it was like no one's been able to make a great like a truly great car business.
>> Like Tesla, but yeah, you but it's not a good it's not a good business. The the car business is not a good business.
>> Yeah. It's made 20 billion in free cash flow over the history of the company.
>> Something like that.
>> Yeah. For as a, you know, 20 years. Yeah.
>> Over a trillion-dollar company.
>> Yeah.
>> Ship a lot of cars though. It is the number one the Model Y is the number one bestselling car in like California, China, everywhere basically.
>> Yeah. That's what I'm saying. So like insane product-market fit, global hit.
>> Yeah.
>> And it's still and to be competitively great business.
>> Crazy. Crazy. Crazy. And and that just feels like entirely new DNA for Ferrari to spin up. It's like hand-built. Like that's the whole concept. And uh and you know Tesla to get to where they have on price point and distribution and scale. Like completely different.
>> Uh Jack Butcher made a great point. He said make the Luce 30% wider and everybody would love it.
>> Where's the uh you can see it on the screen here. It has such better road presence when it is wider. It just looks when it's it's too boxy.
>> Sure.
>> And it looks just a little dinky. But yeah, looks a bit more aggressive.
>> It does seem like uh everyone everyone is just asking for something that it's not trying to be. Like you make it wider, okay, it's less drivable. Like it doesn't fit in garages as
Easily. You make it longer, like the proportions look cooler, but it's not like it's not going to be as easy to fit into parking spaces and stuff. Like the whole point of a vehicle like this is to be like accessible and usable. And that's very antithetical to the Ferrari ethos, but maybe that wasn't the goal.
One car that was getting a lot of love was this special edition that was teased online. You can pull this up. This is the natural ice edition. I thought I thought this looked fantastic. If the team can pull it up here for everyone to see.
Yeah, with the wrap. I think I think beautiful. People might be wrapping these for sure. I'm sure color matching color matching the wheels to the the the gloss and the shine of the can I think is really really nice. And I could see this being a hit on at least college campuses.
Yeah. Yeah, for sure. Imagine having this be your college car and wrapping it. Well, the wrap is usually paid for by the brand. So, the brand will be like, "Oh, we want to we want a campus ambassador."
I know. But I was hoping that Ferrari would just take the leap and actually do a full-on partnership special edition. Right.
Yep. Well, chat didn't like the Ford 021C example, the concept car in the orange, which we can pull up. But I want to know if chat likes it more if it has a body kit. Let's pull up the Ford 021C right after the.
There we go. Does that do anything for you? There we go. If you turn it into a track weapon, are you getting somewhere?
Look at the arrow on this. The arrow is so aggressive. But show show the original photo, the first one. Yeah. There we go. You're going to take that some slight modifications and boom.
Take it away. Go back. Go back to the to John's version. There we go. Yeah. We should look at the Solo Cup inspired hyper.
Oh, yeah. So, John is having went really, really deep on designing some new cars with with the Ched. I think I got a future here. I think I got a future. Look at this. They call this the red time. The red line. Good times. Sharp lines. The red line. Inspired by the iconic, simple, universal solo cup.
Driving a solo cup inspired. This is really the perfect Memorial Day weekend car.
But this is what I'm talking about where like if you saw a company come out with this, I think the reviews like take away the the joke of like the beer pong thing like just the proportions of this particular hypercar, everyone would be like, "Oh, like that looks like a supercar. That looks cool." But it looks like generically cool. It like if it can be if it can be just like one shot by an image model, it's probably not going to stand the test of time. I don't know. It's not taking any risk. Like this this feels like as hilarious as the the the the Solo Cup inspiration is, it's not taking any risk.
When you were renting, the main the main the the two things like again I my my criticism was never the design, although the design is not for me. The criticism comes down to the price point and then positioning it as like an everyday car. Yeah.
And then the concern that I have because Ferraris have always had electronic issues that have plagued the brand forever. My personal experience, I I had a had a Ferrari for a while and I replaced the the main battery like three times in 3 months trying to solve an issue and eventually basically was like, "Okay, this is always going to have electrical issues."
Do you think all the parts on the inside are glued in like an iPhone? You have to replace the whole car. I mean, people will be doing that with Teslas. They'll just be dumping them and getting new ones.
I really liked your version of the Nissan Morano Cross Cabriolet, turning it into a proper proper hypercar. If we can pull this up. I mean, this looks. This one would sell. Nissan hasn't introduced a hypercar in a while. Could be. This could be the Nissan the Spider. It's crazy.
It does look good. That was the thing is that I was like, "Oh, let's let's start with a joke and then get to something that looks ridiculous and is and still has some of that joke jokiness to it, but the final result just looks like a normal hypercar. It just looks like any other hypercar. Anyway, anyways, we should talk about enhanced games."
Yes. So, I I went over to to David Center's house. Yeah. On Sat on Saturday. Yeah. With with my friend Ben and we were all excited to watch and we basically turned it on and pretty much 15 minutes in, I texted John and said, "I thought the stock would nuke on Tuesday."
Yeah. And it did. It's down. I let's see it was 41%. I saw chatter about the enhanced games on the timeline. It seemed like everything was going normal. I saw some viral clips. I saw some posts about it. I didn't notice anything out of the usual. You said that it it it did not like blow you away and I wanted to understand what about it was not a great like you you you come away paying for a UFC pay-per-view or or watching it on Paramount Plus now. Very satisfied like why was this any different? From my perspective, this looks just like any other sport on TV. It looks like something you watch sports and yay you root for somebody and you pick a team and
Yeah. So, so first of all, yeah, you know, this company went public before they had ever hosted an event, right? So, and and we've been hearing about it for years. I I said to you this morning, it it feels like we've been hearing about this for like eight years. You said it's more like maybe two years or something that it's even being talked about.
But anyways, a lot of anticipation. People have been super excited about this.
The the entire concept I I think is is just like really cool and wild, right? You take something that like the Olympics which you know even if you're not obsessed with swimming or or weight or weightlifting or running or any of these things like the Olympics are always like in you know an exciting cultural moment and I think like I I personally you know have a bunch of you know fond memories watching the Olympics right so take something that I that I generally think is very cool and you add you know steroids that's a that's a very fun idea should be jet fuel jet fuel should enhance the experience.
And and then as soon as I started watching, there's a bunch of stuff I would give them a pass on right like the production value putting on an event for the first time it didn't feel like you were watching the Olympics it felt like you were watching like a someone's first attempt at hosting an Olympics there weren't those like crazy like drone cameras following things ultra slow-mo they were they were trying to do stuff but again the people doing commentary have never done it for sure you know the the the whole event is you know just being birthed right so it had an insane amount of attention on it for first event which is always tough but then watching it I realized like the appeal like none of these none of these events like you can't just watch somebody run in a race and know whether or not they're breaking a record like you can see like oh that person's quite fast but unless there's like crazy graphics and stuff like an overlay of Usain Bolt of like the official.
Yeah. Yeah. So, so it's never about it's never about like exactly how fast someone was, right? Because sure there's records involved, but the difference you can't noticeably see whether somebody lifted 220 kg or 220.1. It's not visible to the eye, right? And so what became really obvious to me instantly was like the appeal of the Olympics is you have these like very niche activities where athletes dedicate their entire life to to this pursuit and then every four years there's like a five-minute period where they're getting like the entire world's attention and they're representing their country and they're going for glory and they either they either do it or they don't. They get the gold medal or they don't. You know, whether even getting a silver medal is like agony, right? Because like you just dedicated your whole life to this thing and you're in second place.
And so it really is about it really I it just stuck out to me immediately that it's about, you know, national pride, representing your country, you know, true excellence, right? And in watching this, there was none none of that. They were trying to do to basically build up the brands of the athletes ahead of time, but there was just like no I didn't feel like bought in to any of the storylines. These are a bunch of athletes that were formerly Olympic athletes and some of them had done quite well that are now basically opting into a like just a for-profit like the Olympics are not about making money. The enhanced games were about sure it was about the athleticis athleticism but a lot of it was just like a payday right and so like there wasn't the same I didn't feel I basically we turned it on and then we walked outside and we just made a fire and like hung out and it was like really far in the distance. And we eventually came back came back for the very end not realizing that no records have been been broken the entire moment entire night until the last event last event.
And then you watch the event and I think what would have been made it more interesting like a horse race because is like if you had like an actual overlay of the person swimming the actual record like you they left a lane open or something like that and you could have seen the person who was 100ths of a second. Yeah. So, it was really really tight. Would have been neck and neck.
Um and so yeah. So anyways, it it wasn't it didn't like capture me. I think that it's something entirely different than the Olympics. I I think it's a very clever way to market generic uh generic supplements, right? If you go on enhanced.com right now, we don't have an affiliation, of course, but you can just get testosterone and bunch of, you know, bunch of different products. But but yeah, it to me to me you also came away being like the human spirit is way more powerful than any peed. Yeah. Just like dedicating your life to something for decades and being absolutely obsessed. Yeah. And and representing your country is more powerful than being able to do whatever performance-enhancing drug. So major white pill for humanity. Humanity. Yeah.
Actually somewhat related to Pope Leo 14th's new letter Magnifica Humanitas which we will talk about with our next guest Christopher Hail who writes letters from Leo and is joining us right now. He's in the waiting room and we'll bring him into the TV penultim. Christopher, how are you doing?
Great. Yeah, I was I was reflecting on Magnifica humanitas and I I mean I was struck by we were just talking about the enhanced games and the the pope's commentary on transhumanism and posthumanism. And I'm sure we can go into all of that, but why don't you start with a little bit of introduction on yourself and then take us through some of the key ideas or lessons that you pulled out of this letter and how you processed the the news.
Yes. Well, so my background is I worked in the two things that you're not supposed to talk about on dinner dates, religion and politics. So, I started my career working with President Obama after college. I ended up leading Catholic outreach, actually, ironically enough, for President Obama during his re-election campaign. And since then, I've done various initiatives representing consulting for companies on on faith and and in politics. And I've also done religious outreach once again for every every Democratic nominee since 2012, in fact. But I I also spent a lot of time devouring consuming Catholicism and its intersection with faith and politics. I was a contributor columnist for Time magazine for about a decade during the pontificate of Pope Francis and got invited by Time magazine and actually Newsweek to cover the conclave that elected Pope Francis this past year. Sorry, Pope Leo this past year.
Yeah. And from that I started writing a Substack and it took off. The substack is called letters from Leo. It's about the intersection of religion, American politics and technology. So yesterday though was holiday though was Memorial Day was kind of my Super Bowl of sorts.
Yeah, it seems like it was it like this particular news like really broke through. It felt like I don't know if it was just a slow news day. I think you mentioned that there was like bad weather in a couple media markets. Was that literal like like there was nothing else to report on or people were just inside bored and so they were reading all sorts of different stuff like what was your process on like how the actual announcement rolled out?
I was very upset and when the Vatican announced that it would come out on Memorial Day the pope is born in the United States. I just thought it was a bad day for for media. There was bad weather. I'm here in DC. It was rainy. In New York it was rainy and cold. So my my my religious claim is that God opened the heavens and the poor weathers to to allow the pope pope's document to be received. But yes, it took off and I think I think what that was really the hope of Pope Leo the 14th, he really wrote this letter and this is different from how these encyclicals normally work. We could talk a little bit about that, but normally these are very pie in the sky. This was definitely has pie in the sky elements of it, but this was really meant for y'all for Silicon Valley. He he wrote this with builders in mind. Obviously, Christopher Olaf being there was representative of that, but he wanted this to take off in Silicon Valley and you know yesterday morning Jack Dorsey tweeted out the entire so I think mission accomplished. I think he has woken up a lot of folks both detractors and supporters in Silicon Valley and I think this pop this document's resonating and making a lot of noise.
Yeah. Yeah. What what about it do you think is resonating because it it is such a broad document and it feels like he's taking sort of a middle path. I I saw it as an optimistic document. I I saw it not as not as a doomer this is AI is going to you know you know kill everyone and this is the end of the world like AI can be useful but there are a lot of different decisions that we need to make how AI is rolled out how we maintain our humanity that seemed to be the central thesis which I I liked it seemed like it seems sort of like a like a middle ground is that is that the goal and then what would you expect Silicon Valley to take away or or change based on that?
So, that was the goal for sure. I think Pope Leo the 14th understands that AI is inevitable. Let's just on this for a second. He's he's a he's 70 years old in Pope speak. That's like a baby. He's quite young. He's the youngest pope we've had in 40 years. He's the first pope to own a cell phone. He's the first pope to send an email. He's the first pope to have an Apple Watch. So, he's ingrained in the technological revolution in the flesh. So, he's daily drives an Apple Watch. Yeah, he Yeah, he has an Apple Watch. He also has a Garmin, too. So, I'm Wow. Both and Apple Watch. So, me and him have, you know, some sympathy there. But yes, he he technology. He plays Wordle every day. And most importantly, he consumes Western media. He consumes the Western media and what's going on. So, he knows what's what's happening in the world. And so I think that really informed him what he wants. I the Catholic Church never prescribes policies. They provide we prescribe principles. It's really up to the policy makers to do that. It's really up to Silicon Valley and the products they make to do that. But what he wants Silicon Valley to keep in mind is this question of the human person, whether our projects are advancing the dignity of the human person or whether they are not. And I think that he hears language that concerns him quite a bit. Often times he's especially concerned about any time where human responsibility is abdicated to to machines and there's no one that you can look back to. And particularly he spent a lot of his document talking about war. Obviously what's gone on Iran has really concerned him. He was particularly affected by that first bombing on the day one of the war that killed 168 school children in Manav Iran and he received a letter from those children's parents. So he's deeply impacted by decisions like this and he finds that to be grotesque but he thinks it would be even more grotesque if machines were killing humans without human decision making involved. So those are the some of the concerns he has goes on the economics as well but really the underlying underpinning concern is human responsibility. He wants that to be at the forefront and the dignity of the person. Now it's at the Silicon Valley what that looks like. I think that there's a significant chance that a lot of people will in Silicon Valley will view this as you know del nonsense duper nonsense which you as you said it isn't but I hope they take the folks seriously.
Yeah. On on on the economic question I was interested in the fact that he sort of called out that that GDP might not be the best development measure. Because I've been hearing this from all over the place. We had Doug Olaflin who is the president of semi analysis very deeply in the in in the inner workings of the AI buildout talking about how GDP was an inaccurate measure of certain measures of progress in terms of just economic impact of AI. Then you have Kyla Scandan has written about the vibe session this disconnect between the economic progress of Americans versus the perception and happiness and and we can see it right now. The economy is growing the stock market is at all-time highs yet consumer sentiment is at almost all-time lows. And so I'm I I I've talked to a lot of folks about this problem of like what are we measuring? What is the goal? It's always been GDP. And I think it's it's it's interesting to see that the Pope is calling it out. I don't know that anyone has a really solid answer. The my my fear is that you wind up going towards like happiness optimization and then that takes you into a very dangerous territory too. But but in terms of like unpacking that question of of GDP, development, progress, measures, like how do you think the church is is reflecting on on the way we have become a very measurement-driven society broadly?
Well, let's go back. So Leo the 14th was named after his he took the name his own name after the his predecessor Leo the 13th who in 1891 wrote what was called rear on the barn. If you're not a Latin expert, that means on new things. And Leo the 13th, a lot of people in the west credit him for the intellectual force behind labor unions, the intellectual force behind a 40-hour work week and weekends, etc. I think that that is a good indicator of what Leo the 14th wants as well. The word leisure is sometimes I think derided in a capitalist society, but in Catholicism it's a great thing. We rest on Sundays. Jews rest on Fridays, Shabbat, the Sabbath. There's something about being able to limit the time of work, expanding time of recreation, of spending time with your family and loved ones. Remember the word recreation. It's its root is recreate. That's actually the the the mission, if you will, of of the Catholic Church, of Christianity, is to recreate. That's what Christ does in Christianity when he rises from the dead. We're looking for more moments of recreation. So, I think the Catholic dream would be, you know, to honor the 40-hour work week and perhaps maybe a little less. I don't think that's possible, but to honor the 40-hour work week as sacred, to honor leisure as sacred, to ensure that people only have to work one job to provide for themselves and their families. I think that's what we're looking for. We're looking for a baseline comfort that everyone can achieve in this country by working hard for 40 hours a week. There's nothing wrong with having rest.
Yeah. So, help me help me synthesize that with what the pope said about like the unique human challenges, the challenges that make us human. He said for an algorithm, an error is a flaw to be corrected. For a person, however, an error can be a catalyst for profound change. It was sort of a warning against transhumanism and this idea that every problem is to be solved. In fact, sometimes the problems are what make us human and our struggles are the value and and what brings you joy overcoming. But how how are you synthesizing those two ideas?
I think that what and so it reminds me of an author that maybe your listeners are familiar with. Oliver Burkeman wrote I believe it was called I can't remember the word it was 4,000 weeks. Basically a a a survival guide for mortality. And for the Catholic Church, for Christians, for people of faith in general, mortality is not something to be overcome in and of itself. It's about having a dignified life. He's very skeptical of Brian Johnson. Again, of course, name check Ryan Johnson. Yeah. But for Christianity, death is a part a noble part of the equation. So I think it's really hard for the pope and for the church to understand this idea that that is something to be overcome. Just to get a little theological for a second, really the the way that Christianity overcomes death is by dying. St. Paul says that Jesus by dying destroyed our death. So death is not something we should be afraid of. It's something that is part of the journey. It's what it creates a second life for us, a life everlasting. So more practical levels I think we want to do anything that can dignify the human life to make it to better live to make it more comfortable for people but we we shouldn't be afraid of our limitations. St. Augustine famously says that my shortcomings who by the way St. Augustine's a patron of Pope Leo the 14th he says that my shortcomings actually give honor to God because what it does is it proves the need for a redeemer, a savior. Let me put it in more blunt terms. We can't save ourselves. I think if Pope Leo thought there was an original sin of Silicon Valley, it's that Silicon Valley at its worst thinks it is God or that it can recreate God.
Yeah, we see a lot of that. How how how would you guess that he feels about people sort of implying that AI is is alive? There were some comments at the event yesterday saying, you know, these systems mimic feelings like particularly particularly pointing out that Chris Ola or like Enthropic has written in the past that that they have detected like you know emotions within certain reasoning chains and then the pope said that these systems don't feel emotion in the same way. But I didn't see that much in congruity there because one is sort of a description of, you know, the flavor of a text that's being generated and the other one is like the real true emotion, I suppose. But how how did you process that? Like is there actually a divide or is there some more synthesis that can be drawn there?
Sure. I think on the first I will say that I think Leo views this as a side issue truly in terms of you really curious about the practical first and foremost. Sure. But what you're referring to I mean we know anthropic gathered 15 faith leaders in March and asked the question is Claude a child of God. The very short answer from Catholicism from Christianity at large is that the embiable dignity of the human person is unmeasurable. A a better way of putting it people always you hear that phrase the the whole is greater than the sum of the parts. It's actually a Christian idea. the wholeness of what it means to be a human cannot be measured or recreated in a lab. It is a theological claim. It is a a religious claim. So I think the best way the church could understand it is that you can mimic a human being 99% perhaps 100%. But the fact that it wasn't brought to birth by God and brought to birth by a human a human person first and foremost and created if you will in a lab I think that limits the possibility of it being divine.
Jordy, what else stuck out to you? What was how do you feel the church more broadly? Sort of you know I thought I was you know seeing some of the the the clip of of Olaf talking about you know job loss and job displacement and economic disruption. I thought I can imagine a lot of people in the church broadly were upset to have you know a representative of Silicon Valley there and and who who many I I don't know if this is the view but many would feel like is part of the problem at least when you look at you know tech CEOs or lab cos specifically when they go and do interviews and historically when they've done interviews and they're saying like, you know, this is going to we think this is going to cause, you know, mass massive disruptions to the labor market. People look at the person, they think, you're doing this, like why don't you stop, right? And you know, we we don't need to talk about maybe why it's why it's why it's worth doing, but I'm curious what the kind of broader reactions to that kind of rhetoric are around job displacement because I would say the industry is like the ind industry is becoming like quite divided. I think that everyone generally agrees that there will be you know some serious evolution of certain jobs and and roles and things like that. But a lot of people in the industry believe that there will be significant job creation as new companies get built and and entirely new roles emerge even if some roles and and jobs go away entirely. And of course we saw the same thing in the industrial revolution itself.
I'll stay on Christopher Ola's remarks. I I wanted to step back very quickly Christopher Ola's presence there was on the result of really a 10-year effort by the Vatican to engage with Silicon Valley. And to be very blunt that engagement was at times rebuffed by some not by others. Christopher was there because OpenAI more than any other company in Silicon Valley took these questions seriously and took the engagement of the Vatican seriously and I know for a fact that February dust up with the Pentagon and the it's the Vatican would argue at least officials of the Vatican would argue the the courage that Entropic showed in that and that fiasco was the final was the final straw that made them the guys or or the Vatican. But very quickly, I thought Allah's remarks struck a lot of people in Rome and here in the United States as quite honest. I appreciated him saying that like we're not driven by these questions. In fact, we are driven by innovation. We are driven by profit. It was something of a it was the opposite of a pitch, you know, and I appreciated the honesty. In some ways, I saw someone arguing is actually a confession. He went to Rome and and asked for a confession. and he said, "Look, we have these shortcomings and we need outside institutions to be I don't know if referee is the right word. That's probably too strong a word, but advocates for for a for a human-centered development of AI."
Yeah. Have you have you looked at who did we have who did we have on the show? Pat Gellzinger. Have you looked at any of his analyses of these different LLMs? He's benchmarked all the LLMs on on like how spiritual they are, how they how like how they map to different religious values and his sort of complaint is that the the LLMs are are overly agnostic or overly atheist in the training data perhaps because there's like a lot of Reddit in there maybe. And I'm wondering like if there's any perception of like the the the the training data like the actual products themselves misaligning with the views of the church.
I would say so I would say the Catholic Church of the 14th is not looking for the an LLM to replace a priest or religious advice. And I think that he would have concern that people would go there first quite frankly. So I don't think he's most concerned about the bias. I think he's concerned. I mean, I think obviously Pope Leo is neither left nor right, but I think a lot of his concerns do on this really attack to what the left in the United States is saying. I think that there's concern about bias in profiling, bias in credit scores. He talked about that. I thought that was remarkable that he's talked about credit scores and mortgages, getting access to mortgages. I thought that was profound. So, I think that is more of his concern. We actually saw another study today that said that when you asked some LLMs to to they compared like when you asked them to to compare religions, the Catholic Church got a nice review, a glowing review, so perhaps God's Catholic or not. But I don't think Leo cares as much about that stuff. I think he concern he's concerned more about quite frankly access to resources and and judgment calls about who gets something versus not and punishment or not. Those are really what I think overwhelms. Look, this document was long and he did a lot in it. But the thing that really kind of took most of like at least a lot of part of it, bigger portion of it was war.
Yeah. Can you help me understand his views on international governing bodies, international cooperation? A lot of the debates in artificial intelligence right now they get they sort of they they sort of run into problems where the different American companies sort of agree on something but then there's this boogeyman of international competition and if we don't do it, China will. And so we must continue to accelerate. And it feels like Pope Leo sort of gestured towards a view of international cooperation that could be the solution, but also there were some detractors who were worried about the negative outcomes of of that. And and I'm wondering like how you interpreted his his vision for international cooperation in the modern era.
Sure. I think the first thing is obviously he's an American pope. But he is the pope of 1.4 billion Catholics. So of course he's a globalist. Of course he is concerned. He puts global institutions at at the forefront. He's not unfortunately to some chagrin not America first on these questions. I think that the critics of Leo are going to be disappointed because he he does believe in regulatory order. He does believe in international norms. He does believe in in governing societies. I mean, it's mo the most conservative pope we've had in the past 60 years. Pope at the 16th was very big on on the United Nations and equivalent organizations. Now, I think some in Silicon Valley might rightly argue that's naive. That those things don't work. But I would say that if for a practitioner I think that what he would ask is at least allow the question of can we have more cooperation? Can we have more agreed upon constraint constraints and can we at least engage in this in in good order he obviously you all are profit run companies that listening today and that that that is the reality of it but I think he wants like I think he wants everyone to take to heart what what can we do to ensure that what we're building is for the common good of everyone but I I very much think that JD Vance when he went to Europe and Paris in 2025 and he said, "Let's talk about innovation more and guardrails less." I think Leo's saying, "No, let's talk about guardrails as well."
Oh, interesting. Okay. Well, thank you so much for coming on the show and breaking down for us. Yeah, great to meet you. Anything else? I appreciate it. Have a great rest of your day. Thank you. We'll talk to you soon. Goodbye.
Interesting. I am excited for more people in tech to digest the encyclical and see where all of this goes. We have our next guest joining in just three minutes. Three minutes. We have time for one quick story. Closing out the enhanced games, of course. The next thing was that over the weekend, Diary of a CEO host Steven Bartlett went viral for saying that Tyler, throw me throw me a beer. Yeah. So, this was a this is a funny clip. We can play this actual clip. Ross Ross Hendricks, a lot of people were not were not happy with this. The quote is it's from from a clipper says Steven Bartlett says a few glasses of wine ruined the next three days of his life. Let's play this clip.
It's one of those areas where you don't understand the hidden cost until you really give it up for a while and and I think about my own relationship with drinking and I stopped drinking at 30 years old. I'm now 33 and I had just drank because I just drank. I'd never ran the experiment of just giving it up for a while and I and then like I don't know maybe I was at 31 I thought you know I'll have a drink again because now I could really AB test it. I'd had a year of not drinking decided to have a drink again. It ruined three days of my life. I had a couple of glasses of wine didn't get drunk. It ruined three days of my life because of the the domino effect it caused. So it meant that I got worse sleep that night and then because I got worse sleep that night. I ate more poorly the next day because my my dopamine system or whatever the cortisol system was all messed up and then I I podcasted worse. I didn't go to the gym the day after people did not like that I podcasted worse because I felt really bad. I then slept worse and I could track all of this on my hashtag ad hashtagsponsor #invest whatever. Yeah. And I was like, "Oh my god, I love that Chris is just chilling there. The perfect hidden domino effect that I must have been living with for my whole life."
So, this is like a very non-controversial take that has been popular on podcasts for years really. But it's but it's so pointed here and I think it I mean there's a bunch of interesting things. I mean a lot of people are just saying like, "Oh, you should just be able to drink and like it's gone too far with the the total abstinence culture. Like you should be able to have a glass of wine and and be fine. If you're if you're completely knocked off of everything for 3 days after a couple glasses of wine, like you're not actually like, you know, strong and hearty and you like like you life will throw other problems at you and and much worse than three glasses of wine. You will lose sleep because your kid is sick and you will still be asked to perform. And so yeah, I think I think parents parents watching this certainly looked at it and thought if one if one night if one bad night's sleep doesn't allow you to work out for two days or throws you off so significantly, you probably shouldn't you probably shouldn't have kids because get ready for you know every other lot of crazy like life will throw all sorts of stuff at you."
It was funny cuz when when we when we started doing the show and you saw like my various health habits, you used to joke like John would say, "I'm a junkyard dog. Just eat everything and I just assume it's healthy and nourishing and I feel great. And you would joke that you would say if Jordy had a single inorganic blueberry, he would it would kill him. He would explode. He would explode instantly. The thoroughbred diet." So yeah, I I've certainly just, you know, battled that myself. Like the the the the point of being healthy is to be resilient.
I mean, the funny thing is that we we we used to have Don Peran episodes where we would drink on the show and it actually did make us podcast worse. As silly as that sounds, like it was harder to maintain the flow of conversation and you'd think, oh, having a couple drinks, it probably loosens you up. Like, no, this is actually a performance. Like, even though podcasting is a silly job, like it is a job and you need to be on and another example. So, we we basically decided we decided early on to never take sick days. Yeah. Partially because we would we we spend so much time together like we're always if one of us gets sick, usually the other one gets sick. It's just part of the game. And and think about moments where you just feel like completely terrible. Yeah. But because we don't take sick days, we're like, "Okay, we're gonna power through." And you end up still like we end up still having a fun time. We end up hopefully still having a good show. And and so yeah, I think I think this is this I I think we probably hit I was I was talking with some friends yesterday and it and it it feels like alcohol is going to go the way of cigarettes where it's broadly established that it is very unhealthy but can still be quite enjoyable and will maintain some level of like cigars. Cigars are really
No, but I mean, cigarettes are still widely considered...
Yeah, but cigarettes are so addictive that people either smoke them all the time or not at all. Whereas I think a lot of people who do drink wine will have like a glass of wine on the weekends, whereas there's no one who's like, 'I have one cigarette a week.' That's not like a thing. But people do that with cigars. They'll be like, 'Oh yeah, I go.'
There's definitely people that are...
It's pretty rare though. It's pretty rare.
Anyway, the last thing is that I was fascinated by this fact that this went so viral because of this clip. And Crypto Mickley, who is web3 clipping at Counterparty TV, not Thread Guy, clipped this, and I was interested in it because at first I was like, 'Is this out of context?' And this is sort of the full context from the actual show, but it does sort of change the context because this is obviously from a longer show. It's two people hanging out for an hour. They're talking about a lot of different things, but when the clip is introduced, it's like Steven Bartlett says a few glasses of wine ruined the next three days of his life. It's written like a press release, you know, it's like a statement, and it's not necessarily what Steven would have put out as a press release. He wouldn't necessarily have done a blog with the title.
Yeah. In the actual... this is a guy that cares a lot about performance and he's basically admitting that he had a few glasses of wine and it threw him off. Yeah. And he's just trying to tell like a positive story of like, yeah, just, you know, removing something, feeling healthier. It made him happy. I don't know. But it clearly triggered everyone because there's 24 million views on this and 2,000 quote tweets. And Ian over at SYCOM, the team behind Huberman, Ian is pulling up the chart of new podcasts by year. It's possible that drinking is correlated...
because people are drinking. Podcasts. We should start a podcast.
It actually peaked right in 2020 and this falls off a cliff right when drinking really fell off a cliff because of COVID too. So make it make sense. So where were all the podcasts launched in 2020? I guess is that where this line lines up because I guess during COVID a lot of people started shows and then it went back to sort of the baseline. I guess I'm surprised. I'd like to know more about this data because it feels like there's been like an ongoing boom forever, but I guess not. Anyway, we have our next guest waiting in the waiting room. We have Sean Henry from Stored. He's the founder and CEO joining us today. Let's see if you can show him. Sean, how you doing?
Good to be here. Thanks for having me, guys.
Welcome to the show. Very cool green screen in the background.
Not a green screen at all. If anyone goes by, this is real time. This is live. I'll blame all of my performance on my three glasses of wine from Friday or Saturday night. But...
Good. Great to see you. Been too long. You got some big news today.
Yeah. For sure. John, Jordi, good to be here. Thank you guys for having me. Well, we're announcing that Stored has raised $250 million at a $3 billion valuation.
Thank you guys. Thank you. Really the power of the physical intelligence layer for commerce. We spent a decade building this at Stored and we think that the scale, the vertical integration and the ability to apply robotics and AI to the massive data set we have is just transformational for commerce and what we're enabling for our customers. So very proud to announce this round and thrilled to be here live sharing it with TBPN.
So what's been the biggest growth driver? Obviously, you're expanding your commerce market offerings, but also is e-commerce, is commerce as a general category still growing? What are sort of the macro trends that are tailwinds for you?
Yeah, if you look at our announcement, what you'll actually find is we put out a pretty public chart of revenue. And you'll find in our tweets that right around the time that AI came out, about six months later, we accelerated massively as a business, which really is in part that we had spent eight years to that point already building so much vertical integration of software from the time we're speaking to a consumer during the checkout saying, 'Order now, get it on Thursday,' to the time we're orchestrating that network, to the time we're executing it with software in a building like this across our network of nearly 100 facilities. And so when we took that vertical integration with the scale that we had maybe two years ago at that time powering about $5 billion of commerce, today powering almost $17 billion of commerce, what we've been able to do is drive just faster deliveries, cheaper outcomes with all of that technology and with all of that scale combined. And so a lot of what we're using this new capital for is to keep expanding that scale. There's such a flywheel behind this business where as we get bigger, we're getting faster and cheaper to then also complete the front-end stack of software. That's been a big part of our growth the last few years is that we've built out that whole front-end consumer experience that's now interacting with tens of millions of consumers per year now that we power deliveries to over a fourth of US households. So, we're going to keep expanding that front-end software stack. And then the final big pillar of our growth is we're also announcing Stored Labs with this raise, which was a big part of why we raised so much capital, $250 million, to apply AI and robotics to all of this real-time volume in the real physical world already running real-time. And we've carved out an entire facility here in Atlanta just dedicated to testing next-generation robotics and AI before we apply them and roll them out across our entire network.
Oh, sorry. What are the different why-nows that you're feeling in robotics specifically around, you know, in fulfillment infrastructure? Is it like, is it happening on the model side that there's, you know, other labs just working on the intersection of AI and robotics all the way through, you know, new actuator technology coming out of, let's say, China? Like what is it? And I imagine it's the combination of a bunch of factors that's creating the opportunity, but what are you seeing? Why is now the right time to invest what sounds like, you know, nine figures into your own robotics and AI products?
Yeah, there's really two why-nows going on right now. One is why-now for our business and one is why-now for this investment in Stored Labs. For our business more broadly, I think the why-now comes to by 2020 consumers have been taught they wanted fast, affordable deliveries and that was really what was driving commerce in today's world. Since then, for the last five years, brands of all sizes have fought to get that Amazon-like delivery on their own channels so that they can win and retain their consumer rather than, as one of our customers said in a quote for this round, they don't want to just be a SKU on Amazon. They want to be a brand and own their channels and own those direct relationships. It's actually been a really hard five or ten years for e-commerce when you take into account all the changes with Apple and Facebook and rising ad costs, then with tariffs, then with, or first with COVID, then with tariffs and all of these kind of compounding challenges to where the why-now for us is really that these brands have been beaten down. They've faced rising cost. They've faced rising competition from Amazon, from TikTok Shop, and more that are just disintermediating them with their customer and harming their unit economics. And so we want to give them those unit economics on their own website. And we even saw two, three weeks ago Amazon themselves announced this kind of AWS for supply chain moment. Well, we don't see that as any different. Amazon is really just subletting some capacity in their network. What brands want is truly structurally different, which is independence. They want somebody who's not using their data against them, who is driving all the branding on their packaging, their tracking and more that keeps consumers coming back to them. But it was validating. The why-now for robotics and Stored Labs is equally interesting, which is that if you kind of look at a company like a Tesla, let's say, and you go to the algorithm, they often put hardware and automation last because first you have to nail the processes physically and the operational excellence around those processes. Then you have to nail the software to run those processes and kind of unify those two. And that's really what Stored spent the last decade building. And then only once you've gotten every efficiency out of software, every efficiency out of process, then do you go hard code with hardware, which is physical, it's expensive, it's hard to undo. And that's really where I think Stored's time is perfectly. And that hardware is changing. The hard-coded robotics from yesterday are now the agentic robotics of tomorrow that can learn better, adapt better. Already in this building, for instance, all of our cameras are equipped with AI that are telling us about productivity across the facility, about safety issues, about compliance issues that wasn't available a few years ago. So when you take our vertically integrated software with then all this hardware and sensors and vision and how it's then feeding dynamic agentic robotics, we're in this like fundamentally different paradigm in automation forward, but you have to have the existing software and vertical integration to capture it.
How are you thinking about the different robotic opportunities? Like I think there's a lot of excitement about humanoid robots. We saw last week a demo of a robot, sort of humanoid, flipping over packages so that barcodes could be scanned. And when I'm in a manufacturing facility, I usually see much more purpose-built machines or robots for those specific tasks. If there's a million boxes that just need to be tipped over, typically there will be a conveyor belt and some sort of device that just does that one task. And I'm wondering if you're seeing more energy being devoted to task-specific robotic optimization or more generalist projects? Like what excites you? What does the next couple of years look like?
Yeah, it's a great question and I think it's where we're headed, which is more general. I think the task-specific automation of the past is what kind of causes issues because oftentimes the task at hand changes. You implement that robot and six months later with a new SKU variety, new production change, new consumer demand pattern, all of a sudden the model you built that ROI off of is now fundamentally changed. And if your robot can't adapt to it, you've just wasted so much capital. And so we're very much focused on this kind of new generation of more agentic, more dynamic robotics. And a big challenge in the past was that you kind of either had a robot that moved the arms and could grab something or a separate robot like the Kiva of the world that were kind of moving the legs and it was just shuffling something around the facility. So now you're entering this new paradigm where what could a humanoid do in a warehouse if you could move the top arms and the bottom legs at the same time and really see this new level of movement going on in a facility. But it's in part why we're so excited because our foundational insight when we began Stored, beyond the kind of consumer trend and that every brand was going to need these Amazon capabilities, was the reason brands can't do this is that traditionally physical logistics and logistics software and then the software that serves a brand and speaks to the consumer are all sold separately. And you're trying to figure out how to integrate all this together and tie it into the physical atoms moving out there in the physical world. And so our thesis was, well, if we build all of those together, the infrastructure, the operating software and the consumer-facing software, we will be the platform that can iterate off of these. And right now our biggest costs are essentially either decisions, labor or deliveries. And with how our decisions are going from ML to AI, we're getting faster and cheaper than our industry because of that proprietary software. With how robotics are going from hardcoded to agentic, we're getting faster and cheaper at a faster pace than the industry. And even things like drone-based delivery, it's such an awesome capability and incredible category of companies and what's happening there. But you still need inventory everywhere to be able to deliver from a drone which has a limited radius. And you need that front-end consumer experience software telling the consumer drone delivery is available. And Stored is what controls that part of the stack that then extends out to then enable things like drones. So the shortest statement is we kind of see ourselves as the vertically integrated platform that can first take advantage of a lot of these emerging technologies because our industry is so far behind us.
Talk about international expansion. Where are you live today? Where do you think you'll be in 12 to 18 months? Like what international opportunities are exciting to you?
Yeah. So, we're very large in the US, approaching 100 million packages a year to about a fourth of US households this year. Internationally, Canada's our next biggest market, followed by Europe and the UK. We're expanding with recent launches in both China and Australia and that's taking US brands internationally to say, 'Hey, we can already ship your products globally to over 180 countries. We do that every single year.' But what if you actually wanted to hold your inventory locally in those markets and deliver locally? So if you step back when you think of Stored as saying we are the physical intelligence layer for commerce, what that means is really we're trying to give all the physical infrastructure, all the software tools, all the robotics and all the AI that you need to sell anywhere and deliver to those consumers. And so already today our platform is infused at every level with natural language AI, where I only bring that up because one of the most fun questions we've seen brands asking is, 'Where should I expand globally based on where all consumers are already purchasing from?'
Yeah. Is China an underrated opportunity for independent brands? Like we were just reflecting on the fact that the Tesla Model Y is the bestselling electric car in China. It's obviously an American-made, American-developed vehicle, and I'm wondering if that's not on the top of anyone's mind, but is there some sort of opportunity there?
I think you may be on to something. That's not necessarily why we expanded into China. We are very customer-obsessed and so we tend to follow our customers globally. And to your point, we went with one of the fastest-growing US brands who wanted to access consumers in China and expanded with them. And so I think oftentimes we think about the inverse, which is, hey, if I launch a brand here, my product, my IP or other is going to be quickly replicated internationally in markets like China. Well, there may be the opposite, which is the end consumer there may actually want that brand from other markets like the US. I think there's just this often underestimated fact of opening up more channels tends to decrease your CAC on your first channel because what we see is let's say a brand goes into a new marketplace, a new store, a new international market and therefore the audience just gets larger and larger and larger who's seen them at least once and so then your ad effectiveness goes up and so your CAC organically continues to go down.
Yeah, that makes a lot of sense. Well, congratulations on the fundraising update. Thank you so much for coming on the show and have a great rest of your day.
Talk to you soon. Good to see you again until our next run-in.
See you later. Bye.
Up next, we have Eric Ries, the author of 'Incorruptible: Why Good Companies Go Bad and How Great Companies Stay Great.' Eric is in the waiting room. We'll bring him in in just a minute. You probably know him from his first book, 'The Lean Startup,' which focused on why successful companies drift. This book is focused on why successful companies drift from their founding principles and how to prevent it. 'The Lean Startup' was foundational to me when I came to Silicon Valley. I remember I went to a Lean Startup book event probably back in 2012. You spoke there and it was very inspiring as I was starting my first company. And I took away from it just, you know, money is not infinite. Don't die. Don't burn all your money. But I mean, maybe we could start there and sort of reset, like what are the correct lessons that you think should endure from 'The Lean Startup' and then we'll go into 'Incorruptible' and sort of all of the evolution. But I'd love to...
I would just say like super incredibly influential on my career and journey. Really like unlocked entrepreneurship for a lot of people because totally, but perfect time where like it was, you needed $20 million to be a business.
Yeah. For me, as somebody who just grew up obsessed with startups, I'd be on TechCrunch every day. And all the startups that I thought were cool and crushing it were in TechCrunch every, you know, 12 months raising all this money. And it feels like out of reach when you're a teenager and then you realize like, hey, the book capital is way less of a constraint than you would think. So, thank you for that.
Well, guys, thank you. First of all, congrats to you on the success. You know what's really held up? Like a lot of the techniques and the specific tactics from Lean Startup are a little dated now. I mean, you know, Groupon, it's a case study, it's old now. It came out in 2011. But I think the principles have held up really well. And especially if you think about like from a megatrends perspective, the book said that the world's going to get more and more and more uncertain. So, our ability to plan and forecast is going to get worse. I think we nailed that one. And that the democratization of technology is going to mean that more and more and more people are going to be able to build faster, cheaper, better products. And so when you put those two things together, every industry that's been hit with a double whammy with those two things, Lean Startup holds up real well.
Yeah. Do you think startups are getting leaner or less lean in the modern era? And what I mean is that I will see, we have folks on the show all day. Oh, $200 million seed round doesn't feel lean. At the same time, we hear about the mythical one-person, one-billion-dollar company. And although there's been some reporting that's been a little bit debunked on hasn't happened yet, it feels like it is becoming more attainable. You can run leaner even if you're just using SaaS products, but also AI agents can do a lot of things. You can answer a lot of questions. You might have slightly lower legal bills just because you're a little bit sharper going into that negotiation. And so I'm wondering on the net leanness, how are you processing the modern era?
Well, every time we have a mania or a bubble, you know, whatever you call it, right? The situation goes bipolar real fast and you have people who are struggling to raise money if they're not in the favored category and then obviously the money is flowing ridiculous. What's funny is I've been at Lean Startup long enough that people periodically write these articles that are like, such and such company proves that Lean Startup is over. And they always pick a company like Quibi. So it's like, you know, you just never know what it's going to be. The thing I think fundamentally, like using resources well is an eternal entrepreneurial virtue. So even the people that are overfunded, a lot of them run into trouble because now you don't have that reality kind of barking at you all the time to make sure that you're actually building something that people want. It becomes easier and easier to delude yourself the more money you raise. The other kind of startup that's emerged is the Lean Startup that ends up raising a lot of capital, but simply because they were lean and they were like really scrappy and so they grow super quickly. I'm thinking of like, you know, a TurboPuffer, right? Our friend's company where, you know, raised very little money. He's at a nine-figure run rate right now, but extremely attractive to capital.
But his entire approach is like, how do I maintain that scrappiness even once I have a fortress balance sheet? Because that's what made the company great from the beginning. It's just like doing things that customers want, that they'll pay for, you know, all these things. When it's so easy when you take in that level of money to lose that ethos. The thing that made it worth investing in in the first place.
And I think it's interesting, like I know quite a few companies that like what you're describing where the fundraising was done for some other reason than for the money. In fact, I know a bunch of founders who brag to me, 'Raised this money and never spent it.' Because it can make sense to have a fortress balance sheet. To me, the real question is not about like how big or small is the organization, how much money was raised, but how much control do the people who are locked into that mission actually have over what happens next. And sometimes when you raise too much money, especially too much money too early, you think, you know, you ring the gong and you're really proud and that's great, you know, like it's okay, that's really fun, but then like have you actually... Yeah. Or you... I get the air horn, you guys get the sound effects. And like sometime, you know this, you know the media environment, like steadily building a product that people love day in, day out, like that's not the sexiest story. And so sometimes, you know, we get distracted by all these other things that take us away from the one and only one thing that truly matters, which is can you build a great product, build a great company.
Yeah. Yeah. I mean, there are so many, and a lot of the financial reporting sort of misses the changes of control that happen. Like there might be a company that's raised a $1 million Series C and then a $5 million Series A and there's two VCs on the board and one founder, and then there might be five founders on the board and VCs are stuffing $100 million checks and they can't even get a board seat because there's so much demand. And which one tells you more about the future of that company? Potentially the governance side. How are you grappling with just governance in the modern era there? I mean, I feel like that's a lot of what this book is about. There's so many different paths. There's, you know, PBCs and really diffuse, lots of, you know, lots of co-founders having even stakes, and then you have the SpaceX, AI, immense control in a single founder. Both can produce, you know, fantastic products and good financial outcomes, but like how should we interpret all the different roads that are available to founders these days?
It's really confusing. That's actually part of the reason I wrote the book. The book is meant to blueprint, to actually show a new, better way forward. Like the extreme founder control has its problems. You know, psychologists call it hubris syndrome, not to name check any particular founders, but you know that can cause some issues. But also investor-dominated companies really underperform precisely because we have this financial system that has this gravitational force that pulls companies down into mediocrity or worse. And in the book I document like over and over and over again, we reenact the parable of the goose that laid the golden egg and just stab it right through the heart by removing the thing that actually made it worth investing in in the first place. How many times have you gone to a restaurant and you look on your phone, you take one bite and you're like, 'Did private equity buy this restaurant? It tastes disgusting.'
No, I have the best example of this. My favorite hotel in the world was bought by private equity and one of the things that every guest would talk about, didn't matter at all, it's just like barely contributed to the cost of like, you know, having a guest, was that every night the hotel would walk around and they would leave a warm chocolate chip cookie and milk for each guest. And literally, private equity bought the hotel which only had like something like twenty-something keys and they immediately removed the free chocolate chip cookie with milk at night thing. And I just, it was such a funny thing to like take out, but it's exactly the kind of thing when you're transitioning from, you know, this like founder, you know, family-operated business to investor-owned.
Yeah. What's sad about it is we've built an economy where people are routinely rewarded for cutting costs but never held accountable for the downstream brand and quality consequences of that. So like on the balance sheet, getting rid of the cookie is immediate ROI positive.
Yeah. And you can justify it. You can justify it because, well, the cookie is still on the menu so people want the cookie. Why do we have to get... We looked at the data. We looked at the data. A lot of people don't even eat the cookie, right? And so it doesn't matter. And of course...
No, you got it right. Like how is it possible that the capital structure of a company has a flavor?
Like you can literally taste it. And because like notice how when you said that private equity took over your hotel, we're all ready to give you condolences, right? Like you could in theory, you might be like, well, having those resources made it better, right? Go, that's great. And now they're going to... No, no one ever feels that way. And everywhere I go, you know, I've been doing this book tour in the new book, people are coming up to me to be like, 'I know that story, yes, that happened to me.' And they've named like twenty different restaurants to me, hotels, like so many service products where, and again, it's not about private equity per se, it's that we've built this pervasive force that is just dragging companies down. So if we're going to now get to the governance question, and I know for founders listening, it's like, oh God, governance, so boring, but important. As I say in the book, if you don't get the governance of a company right, no other decision you make will matter in the long run because you won't be the one making it. So we have to figure out how do we create that like incredible alignment you've seen it in mission-driven companies, right, where everyone's on the same page, and how do we protect that special thing from outside pressure? And when you put those two things together, we can create what I call mission-controlled companies that cannot be corrupted by this temptation.
Yeah, there's a bunch of different things that I want to click through to interrogate that. The first is probably quarterly results, quarterly earnings. I've seen proposals to go to every six months reporting and it seems like, okay, that would align public companies with like the CEO could think for six months instead of three months and take bigger risks and think longer term. That feels very good. At the same time, it feels like the rug that you sweep things under is potentially just getting twice as large or the closet where you hide the bodies is getting twice as big. And I'm wondering, is there a tension there? Am I wrong to think that there's a tension there? Because a lot of, I think about, you know, problems in the public markets with long-term value creation, long-term alignment, but then I also think about the transparency that comes with being public, the regulation that comes with being public, the access to public investors, retail investors that can participate in a company before it's a trillion dollars if it's going to be a great company. So how are you dealing with those tensions, if there are tensions?
Yeah. Well, okay. First of all, the tension is completely real. Okay. And the thing you got to know is, Long-Term Stock Exchange, the company that I founded, is the one who filed the petition last year to the SEC to switch from quarterly to... Okay, so obviously I have a strong view about it. Yeah. Exactly. So, and what's funny about it is, okay, so first of all, we have to understand the scale of the problem. You're not going to believe this, but we have...
By the way, sorry. Sorry. Before we continue, you should have named it like, you know, Eric's Law or something like that. You're not getting enough credit. You're not getting enough credit for this.
That's... Listen, the memes and everything, that's your department. Okay. I just... Right. Okay. So, okay. But you got to understand the magnitude of this problem is insane. Yeah. If you look at other countries, there's these natural experiments where certain countries have switched from semiannual to quarterly reporting or vice versa and they happen to do it in such a way that not every company changed at the same time and it was random who did which. So we actually know the valuation consequences of quarterly reporting and it's roughly a 5% loss of total equity value.
Companies are 5% less valuable...
when they report quarterly than semiannual. So the academic research on this is pretty good and the magnitude of the cost. We're talking about so many billions of dollars of lost value. It's not because the effort to do a quarterly report is expensive, although it is expensive and annoying. Rather, when people report quarterly, they start to run the company for the quarterly report. So companies no longer make products. They start to view the quarterly report as the product, which means they're basically meme factories. What do I have to do to generate the report that will get me what I want? Now, getting rid of quarterly reporting just by itself, I don't think is a very good idea, and we'll see what the SEC ultimately decides to do. I think we should replace quarterly reporting with a better, like more wholesome disclosure project where long-term investors can actually find out what the f is going on at the companies they invest in, where today companies are strongly incentivized to give out as little information as possible. But that's kind of broken the partnership we need between long-term companies and long-term investors, of course part of why we recreated the exchange in the first place.
Yeah. Talk about public benefit corporations and how incentive alignment might play out like in the longer term when there is, you know, when you get to a stage of a company that's a lot more like Apple than a founder-run, like Anthropic is a unique example with a set of co-founders, but that like the normal Fortune 500 company has a leader at the top that might have 1% equity and a board seat, but there is a chairman of the board, there's a board of directors, it's much less controlled. But in that scenario, they are reporting to shareholders and they have a fiduciary duty to shareholders. If you have a company that's broadly held and has diversified board and diversified ownership structure but is a PBC, how does that play out? Like what are they doing differently? Is it that the CEO has two different hats and they're mentally taking these on and off throughout as they're decision-making, or how does that actually play out?
Yeah, that would be too hard. The so-called double bottom line, triple bottom line, I think has not worked out very well precisely because it leaves CEOs really confused. Okay, you want to be multi-stakeholder? Great. Customers want lower prices but employees want higher wages. Now what?
So it kind of leads to compromise.
But what's interesting, PBC is actually not that new.
Okay. For the vast majority of time there have been joint stock corporations on this planet, it was considered obvious by everybody that they should be incorporated to do a specific thing. When they're just trying to make money for themselves, they wind up hollowing themselves out. That's what makes them dangerous. It was only in the 1980s that the idea of so-called shareholder primacy came into effect. So, if you walk by your local park, you will see trees that are older than this idea. This is not some ancient pillar of capitalism. And in the book, I make the case for, first of all, we got to get rid of shareholder primacy. I think it's a terrible idea. But the question is kind of like attacking it is easy because the data is so good about all these best practices being so bad. The issue is what do we replace it with? What does mission primacy look like? And I think the key to that is to understand that being a for-profit company is actually great. Making a profit is actually about making the world a better place. That's literally the definition of it. It's like a positive margin transformation. So in the book I argue, and I feel weird doing it in the same day that like Pope Leo made this same point in way better fashion, you know, hundreds of pages, I only mentioned it in passing, but like literally to make a profit is to maximize human flourishing, that's what it means. So now coming back to the PBC, all a PBC does is give the CEO and the board the legal cover to pursue long-term value creation in the face of hostile investors. So if you go there and say, 'Listen, I want to sell the company to Philip Morris because they're willing to pay a dollar more per share than it's worth,' you need the tool to be like, 'No, that's ridiculous. Of course we're not doing that.' And that's what PBC allows you to do.
Interesting. What do you think are some of the most underappreciated companies in history that you feel like had mission primacy?
Yeah. Yeah. Obviously, these are profiled in great detail in the book. And what's really interesting is if you talk to people about corruption and say like, why do companies go to, you know, go to bleep after they get big or whatever, most people be like, 'It's inevitable. It's human nature. Companies get old, they get big, there's a lot of money involved, blah blah blah.' But those same people, if you're like, 'Are there any companies you trust?' You're like, 'Man, I love Costco.' Yeah. It's like interesting. Like, how come? But I thought it was inevitable. Costco's a $400 billion public company. Oh, yeah. Well, they're the exception. You're like, 'Well, what about Patagonia? You got a Vanguard mutual fund. What about, you know, John Lewis Partnership, or you ever eat a Hershey's chocolate bar? You ever taken a Novartis medication?' Like there's all these weird exceptions, many of which are decades or even like more than 100 years old. And what's interesting to me is if you take that whole category of companies as a data set and say, what do they have in common? Every single one of them violates pretty much all of today's so-called best practices of how companies are supposed to be structured, built, and run. So I think we actually have really good data that this is not some abstract thing. So for example, when the founders of Anthropic left OpenAI, so what is that, like three or four OpenAI crises ago? I can't track, but anyway, it's like hard for me to keep track, but anyways, like it's been a rough, you know, it's been a rocky road. When they left, like I was one of the people that they talked to setting up their governance structure. And again, I am not taking credit, okay? Don't do the meme thing, okay? I'm not taking credit for their success. Obviously, I played only a very big...
They wanted to call it the Eric PBC, but you said...
And I had to talk them out of it. I was like, 'Guys, please, please, no, no, I don't...'
You know, they were looking for an idea and you told them like, 'I think you should work on AI.' That's what happened.
Yeah. Yeah. They were like maybe thinking of pivoting out because they left OpenAI. They're like, 'Maybe we should give up on AI.'
They were going to do protein shakes or they were going to do an energy drink and you were like, 'I don't do this.'
I just talked to... I said about Dario. Don't get me in trouble here. People are going to clip this out of context. Give me...
Okay. Well, listen. So for the record, I am not taking credit for their success, nor am I trying to talk smack about OpenAI. I know you guys love them. The issue, but the specific thing I think is really interesting is because they were really worried about this specific issue when I gave them my typical litany of like founder loss of control horror stories. They could see how bad that would be. And in fact, it's funny talking about the Pope. I was at an event at the Vatican last year talking...
about AI governance. And I was on this panel with every major AI company, OpenAI, Anthropic, Cohere, Palantir, Google, Meta, everyone on the one panel together, and me for some reason. And I'm looking down this row and I'm like, 'Oh my god, not a single one of these companies has standard governance.'
They all consider it to be too dangerous.
They got to have somebody playing the role of what's called the mission guardian. But Anthropic, to their great credit, I think, did not want it to be the founders personally holding that special responsibility because it's stressful as hell. I know many founders who are trapped in this situation.
So they created something called the Long-Term Benefit Trust, which is like a multi-branch government, right? So you have the for-profit PBC and then you have the board of directors accountable to a second entity, this outside trust. And the data shows that companies with that structure are something like five times more likely to live to year 50 and have like way better long-term value creation metrics too. So again, I think we have the evidence that there are these better structures. Yet most founders are never given this as an option, and by the time they find out about it, it's too late. They've already lost control.
I think one interesting thing is if we move to biannual reporting, there's going to be a lot of work. Accountants, lawyers are going to have less work, but you're creating a new structure, you know, these complicated structures, they can just shift their attention to working on mission-aligned companies.
Maybe, maybe, yeah, sorry.
That wouldn't be that bad, would it? I think like compared to what they're working on now, I think...
No, no. I'm sort of joking, but at the same time, I think it would be a much better use of their time.
I want to talk about Mondragon. Is that how you pronounce it?
I'd like you to introduce it though first for those who aren't familiar. And then I have some questions about, you know, where we go, what lessons we learn from it. But first, how do you understand that?
See, I don't get to talk about Mondragon very often. So I know you did your homework and I just A+.
Okay, so it's funny, talking about the day of the Pope's encyclical. So a Catholic priest walked into the war-torn Basque region after the Spanish Civil War. So this is not the setup for a joke. It's not like a priest walks into a bar. He actually went there and instead of like preaching, you know, just comforting people who are being devastated, he had this vision for a new kind of economic reality where workers would be empowered to learn a trade and to own and to control their own destiny. And to make a very long story short, he started to create this network of worker cooperatives where the workers themselves own the means of production and they build all kinds. They started with like industrial equipment and now make all kinds of stuff. And if you zoom out today, Mondragon is this gigantic company that employs 90,000 people in Europe, one of Spain's largest companies, makes elevators, and they have a grocery store chain and all kinds. Like if you look at it from the outside, you say, 'Oh, that's like a fully diversified industrial conglomerate.' Makes sense. Like making a lot of money, that's perfectly sensible. But if you zoom in, there's nothing about Mondragon that actually resembles a typical for-profit corporation at all. It is a network of I think 80 or 90 of these independent worker cooperatives that work together. They have like a congress where they send representatives and they self-govern, and any of the cooperatives can leave the network if they don't get benefit from the central services that it provides.
So this is an example of what I call a mission-locked constellation, which is a set of entities that when you zoom out, the customer, the investor, anyone from the outside perceives it as one thing, but it's actually many things. Now be honest. If I pitched you this as my business plan, that I was going to create a 90,000-person network of 80, like if I pitched it to you, wouldn't you say it was impossible?
Well, that's my question.
Yeah, I would say it's not that it could never work. It would just be extremely hard to reproduce. Like I think if you got a really talented group of people and you tried to rebuild something like this, even knowing all of the mistakes and challenges that this last one had, it would still be very difficult and probably end in failure. But...
Right, so it's clearly possible.
Well, the fact that it exists obviously proves that it's possible, but I think most people when they're thinking about how to start a company just have a very narrow view of what can be done.
