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52... founder.
You're watching TV. Today's Wednesday, April 15th, 2026. It's tax day. I hope you paid your taxes. Uh, we have a great show for you today, folks. Bunch of crazy stories going on. Allbirds is now an AI company. Uh, Snap is restructuring the entire company. Uh, Amazon's buying Global Star. There's new info on Apple's new AI glasses. We're going to take you through it all. We also have a bunch of guests joining. One, two, three, four, five, six, seven guests joining. Kiva Dickinson, Aron D'Souza, Michael Mignano is now at Union Square Ventures.
Yeah, we're very excited for that. Uh, Wade Foster from Zapier is coming on. Uh, and just got acquired by AngelList. Uh, weird split acquisition.
Split acquisition. I'm not exactly... Oh, so half the company's going to AngelList, half the company's going to Lattice. That's right.
Got it. I wasn't sure what that meant. I'm excited to talk to him.
And, uh, Ankur himself will be over at AngelList. Very excited about that.
Great pickup. Uh, but fun show today. S&P 500 rises to a new record.
Yes. So, why am I not wearing a white suit? It's because although the market is at all-time highs, I don't understand why. Uh, it feels like there's never been more chaos in the markets. And, uh, I'm seeing a lot of companies that are under pressure, a lot of software companies that are under pressure, a lot of companies I know and love under pressure. Uh, but it does feel like the Mag 7 is doing well and some of the bigger companies are doing well. AI is still a mega cycle and there are exciting pockets of opportunity in the market, but we will be digging in.
Certainly Allbirds is doing quite well.
Yes. How much is it up today?
So we talked about this maybe last week. That's an insane gain for a single day. Uh, but they're completely changing the business model. Uh, the Financial Times has a hilarious article, uh, in Alphaville. Alphaville has great headlines. Uh, Allbirds is turning into an AI compute provider because of course it is. And, uh, it goes through what's happened over the last, uh, few years, few months. There's been a lot of twists and turns with this story, but we'll take you through it. So they start by saying, ah, zeitgeist. Allbirds is a San Francisco maker of wool trainers that was once valued at more than $4 billion. That's pretty big for a direct-to-consumer shoe company. Uh, at the same time, darling, when it was growing and selling a lot of shoes, you know, Nike is a big company. It makes sense that if you could get a piece of that, maybe you could be a multi-billion dollar company. But...
Yeah, and they were selling a lot of shoes. They were very on trend.
Yeah. I think they got the revenues into the hundreds of millions of dollars and, uh, you would see them everywhere.
Yeah. Yeah. They definitely had some owned retail stores and were pursuing the hybrid online-offline sales model. Uh, it was working. Like, it was never just like some completely hypothetical vaporware company. Like, they were real shoes. You could buy them and wear them. It was fine. Um, but, um, it was sold last month for $39 million to American Exchange Group. The stock having slumped more than 99% since its flotation on the NASDAQ in 2021. And so look at this chart, Jordi. Uh, very, very rough for Allbirds.
But maybe the next plan is better. We'll figure it out. So, the plan for the shell listing is, quote, to pivot its business to AI compute infrastructure with a long-term vision to become a fully integrated GPU-as-a-service and AI cloud solutions provider. In connection with this pivot, the company anticipates changing its name to New Bird AI. And so this was very unexpected. We can talk about where we are.
With shareholder approval, Allbirds will raise $50 million via convertible notes from an institutional investor it does not identify. So, uh, they're going to be able to get at least...
For that, maybe they'll be able to plug them in. Maybe a whole rack. They can plug in a rack.
Um, but yeah, big questions around where are they going to get the compute? Where are they going to get the energy? Uh, will anyone be willing to rely on them?
Tons and tons of questions.
This feels like an institutional investor who says, I want to participate in this idea that, uh, even older GPUs are trading above par and so GPUs are sort of gaining value and they want in on that in some meaningful way, but they also want to wrap it in a public company that can sort of become a meme stock essentially. And then basically everything else about the business will be different because the entire shoe business will be sold off and, uh, this is basically just a use of the ticker and the listing and the shell and then probably an entirely different team, entirely different strategy, entirely different, uh, everything basically, uh, new name. So here's the Schedule 14A that explains the pivot ahead of a shareholder vote on May 18th. It adds, with respect to the renamed corporate entity, we are investigating potential opportunities in the computing infrastructure market including the acquisition and monetization of graphics processing units, related high-performance computing infrastructure capable to support high workloads, whether from artificial intelligence and machine learning or other needs of potential future customers and other related assets. Also, uh, because the anticipated electronics infrastructure business would be less focused on the public benefit of environmental conservation, which is stated in the company's certificate of incorporation. I guess Allbirds was a public benefit corporation because the wool was supposed to be more environmentally friendly and it was, uh, almost like an REI-type brand. Uh, they are doing away with that and so the stockholders are being asked to approve the charter amendment proposal, uh, to remove references to the company being operated for the environmental conservation public benefit. Uh, that is not going to be popular with, uh, the Allbirds fans.
The announcement was enough to establish Allbirds as a meme stock at print time when this went to print. Uh, the shares are up 774% at $1.76 a share, uh, to give the soon-to-be shell a market cap of slightly more than $184.5 million. And so I guess the question you have to ask is if this $50 million comes in, they're able to buy GPUs, rack them, get some value out of it, is that worth anywhere near $184 million? It's a tough sell, but the market will figure it out over the next few days. I'm sure the value is Dave Portnoy.
Hold on. Let's hear from...
It's interesting. I mean, $50 million is like not enough to like lease from a NeoCloud, right? Because you just like can't buy enough capacity.
So, it is interesting. I don't know who the actual consumer of these GPUs will be.
Maybe you can just like resell them on OpenRouter or something.
Yeah. Yeah, you can resell on OpenRouter.
I mean, George Hotz was talking about, remember he was talking about like he found a building that had cheap power and he was going to just buy a bunch of GPUs and I think he was raising like $10 million or $20 million to do that and he was going to sell the tokens on OpenRouter profitably. And so there's a potential business model there. Uh, also, yes, so you probably couldn't sell to a NeoCloud that's doing some huge foundation model training run, but, uh, there might be some company that's doing like fine-tuning on some small model or doing some niche model. I mean, again, to go back to George Hotz, like he had a, you know, a couple racks of GPUs that he was training self-driving cars on, and you have to imagine that there's lots of like long-tail applications for custom models that need to be trained that aren't as big, maybe. I don't know.
Yeah. I mean, so is this like essentially just a SPAC?
Because you're just... Yes. Everything is different. Yes, it was already a public company and they're just adapting. They're doing like a massive pivot. Uh, I don't think they will make any progress at all. No.
I think that it is entirely a meme. Uh, I woke up this morning, I was like, that is really funny, you know, taking Allbirds became a meme, right? The company was basically dying but the meme remained strong.
And, uh, it's kind of making, uh, Allbirds in some way just like became such a part of the uniform of Silicon Valley. Uh, it was something that Silicon Valley was mocked for and to take that corporate shell and, uh, make a mockery of our industry again, uh, feels quite fitting. And, uh, so anyways, I'm incredibly...
Uh, even Dave Portnoy said, I don't get it.
And he loves a meme stock. So...
I have no idea how the actual stock will perform. Are you pulling it up? No, I don't have it here. I think you had it. Um, but allbirds.com still resolves to the full e-commerce website. They have an extra 25% off sale, discount applied in cart. You can get all the different shoes that they sell. I think they sell other stuff too now. Um, and so it'll be interesting to see. I mean, how quickly can they disentangle the new compute infrastructure division from the actual apparel and shoe division because, uh...
Well, my understanding is like they sold off all of the Allbirds assets.
So for $39 million they sold it to American Exchange Group. They got the domain.
And so they're just kind of using the... they got all the IP as a quicker way to get...
But the ticker remained public and it was just sitting there.
And I think a lot of people are sitting there talking to their friends being like, why did I not think to turn Allbirds into a NeoCloud?
Yeah. Why am I... we had a buddy who's a very, very smart investor who you could just tell wanted to slam his head into the table because he's, you know, spending all this time trying to pick real winners, invest in fantastic durable businesses and all, you know, right in front of him was, um...
Uh, what in hindsight is like a very, very obvious play. Yeah. Um, but again, you know, looking back at the history of, uh, the last time this happened was Long Island Iced Tea.
Uh, in 2017, December 21st, 2017. The company announced that it was changing its name from Long Island Iced Tea to Long Blockchain Corp. and said it would shift its strategy toward exploration of and investment in opportunities that leverage the benefits of blockchain technology while keeping its beverage subsidiary. Uh, the stock surged immediately after the announcement amid crypto mania. Again, this was the 2017 cycle. Uh, coverage reported jumps of roughly 200% and some reports said it rose as much as, uh, 380% midday. And it basically then just started to chop for a few weeks and ultimately faced various... had a little run-in with the SEC.
And they brought insider trading charges.
Uh, ahead, you know, because of activity that happened ahead of the pivot announcement. So, I wouldn't be surprised to see, um...
I wouldn't be surprised to see, uh, something similar here.
The Long Island Iced Tea Company was doing $4 million in sales in 2017, something like that. Uh, 25 employees, like pretty small company back then, and then just sort of wound down. Um, there... the people are not very optimistic that this would work. Uh, Ben says, hopefully everyone understands whatever the Allbirds pivot is, they won't likely secure any power, any GPUs at reasonable scale and need a lot more money than this to even have a prayer. And you certainly see that with all the other NeoClouds that show up on ClusterMax. Um, every NeoCloud that we talk to on the show is, you know, raising hundreds of millions of dollars and then debt on top of it and usually has a lineage that traces back years if not a decade and has a whole bunch of interesting, you know, unique value props to actually... whether it's on the software side, on the deployment side, on the infrastructure side, on the energy side, actually going and finding power is very, very difficult and continues to be. Uh, but yes, a lot of people are saying this is dot-com vibes. It is crazy. Catrini says, can we please wait until we are at least 5% above previous all-time highs to start doing this? And it does seem like this. Uh, if you sell shoes, pivot to a GPU cloud, I guess. And negligible capital. Has the meme from Wolf of Wall Street. The name of the company, New Bird AI. It's a cutting-edge AI-native cloud infrastructure firm out of... well, they used to be out of San Francisco making sneakers, but forget that, John. They are now awaiting imminent deployment of next-generation GPU compute clusters that have both massive enterprise and consumer applications. Now, right now, John, the stock trades on the NASDAQ at about the price of a cup of coffee. And by the way, John, our analysts indicate it could go a heck of a lot higher than that. And John, one more thing, they're up just 160% today. Yeah, what a wild time. Well, stay safe out there, do your own research and avoid all the froth. Uh, Mike Isaac says, this is just going to be the default for any failing entity that owns a significant amount of real estate, uh, able to be converted into data centers. I'm waiting for the Allbirds server farms. I don't know if that's what's happening here with real estate. I think it's more about the shell entity, the brand. No, not even the brand. I mean, the brand.
No, the brand. The brand. Like, there has to be a goofiness to it. Yes. For it to have the meme potential. Yeah.
Because I don't think anybody who's investing in this company actually thinks they will build a great NeoCloud.
Um, we just have, you know, talked to so many of these companies and there are a number of established players. In fact, they're already...
Um, you know, everyone expects the market for inference to be one of the biggest markets of all time.
Yeah. But that doesn't mean that anyone that attempts to build a business here will be successful.
Yeah. Well, let's move over to Snap. Evan Spiegel, former guest of the show, two-time in-person guest.
You're saying he went to Coachella and came back and was like, right, restructure the company. So, he's laying off a thousand full-time employees, which is roughly 16% of the global workforce as part of an effort to reduce cost and achieve profitability. Uh, in a memo to employees Wednesday, Spiegel said the cuts are necessary for Snap to boost efficiency as it pursues profitable growth. He cited improvements in artificial intelligence technology that let Snap employees move more quickly. The company is also closing more than 300 open roles. Spiegel told staffers, many of whom were told to work from home on Wednesday, that the job cuts and pullback on hiring will reduce Snap's annualized cost base by more than $500 million by the second half of this year. Snap estimated that total revenue rose 12% to $1.53 billion in the first quarter. So $6 billion in total revenue run rate. Uh, adjusted earnings before interest, basically EBITDA, is $233 million during the period. Snap shares jumped as much as 9% after markets opened in New York. Uh, Spiegel wrote a memo. He said, last fall, I described Snap as facing a crucible moment, requiring a new way of working that is faster and more efficient while pivoting towards profitable growth. Over the past several months, we have carefully reviewed the work required to best serve our community and partners and made tough choices to prioritize the investments we believe are most likely to create long-term value. Uh, the stock is down 31% so far this year. And what's interesting is that it is not really this SaaS apocalypse narrative because even if you vibe code a Snapchat clone, you won't have the actual usage data, the network effect that exists. Um, but the market has definitely turned on stock-based comp and just is in the hunt for profitability broadly. So, um...
Uh, which of course Snap has never generated a single dollar of net income.
When you include stock-based comp, right?
I think that always includes stock-based comp. Uh, and so EBITDA is positive but they issue a lot of stock to comp the employees and that has weighed down on the share price because there's a lot of dilution. Um, and while Spiegel is also working to sell a vision for augmented reality glasses which the company plans to debut later this year, it has leaned heavily on outside firms to power its AI offerings. Larger rivals are spending aggressively to build and develop their own state-of-the-art AI products and infrastructure. The job cuts arrived just weeks after activist investor Arriane Capital Management took a stake in the company and called for swift changes in that memo that we reviewed on the show a couple weeks ago. Um, including a recommendation that Snap cut its workforce in hopes of boosting the stock price. Like many of your peers, you overhired, the investor wrote in a letter to Spiegel last month. Unlike your peers, you haven't course corrected. Spiegel's note to employees didn't mention whether the job cuts were related to Arriane's recent demands. Uh, other major tech companies have slashed their workforces, including Snap rival Meta Platforms. Meta eliminated hundreds of jobs globally in March and shed roughly 1,000 workers from its Reality Labs group back in January. All while ramping up investments in AI. Spiegel suggested AI was one part of his decision for the cuts. Uh, while these changes are necessary to realize Snap's long-term potential, Spiegel said of the cuts, we believe that rapid advancements in AI enable our teams to reduce repetitive work, increase velocity, and better support our community partners and advertisers. And so the big question that I have generally is like, what is the actual replacement rate? Like, how much are they spending on AI? We saw that report from Uber that they blew through a year of budget on AI tools in just a couple months. And, um, a lot of people were sort of reacting to that saying like, well, I've used the Uber app for years. It doesn't feel like it's changing dramatically. Of course there's manual workflows that internally might need to be done and AI might speed that up. But, uh, in terms of getting like net new applications, net new apps that people actually use and enjoy, uh, that seems to be like the next opportunity for real growth as opposed to just cost optimization. Um, and so the $400 million deal with Perplexity is no longer happening. I guess that's been pulled back on. And, uh...
Yeah, I wonder, I really wonder why.
Uh, Perplexity is seeing seemingly some very real growth from their new product, Comet. They've been sharing some of the increased revenue that they're seeing from that. Um, but yeah, that was I think one of the things that, uh, yeah, what did, uh, in the Save Snap Now campaign...
Uh, that was one of these suggestions was to pull out of that.
Is to concentrate AI partnerships on clear winners like Gemini, OpenAI, and Anthropic.
Um, so they were not in favor and again it seemed like Perplexity would be in a position where they would pay the most potentially for that distribution. Um, and we'll see if they actually backfill that slot or just focus on their own tooling.
So, uh, the full presentation is up now which you can read through. After nine years of being a public company, 15 years since being founded, Evan Spiegel finally decided to put a business plan together for how to reach profitability. And so you can go click through all of that. Um, and, uh, what else is going on? Oh, you wanted to talk about Anthony Pompliano's new agentic podcast on Wall Street. The show is called Best Stocks, and it's 100% AI generated. Each episode is based off the agentic research articles. Synthetic AI content will be more popular than human-created content, he says. Uh, and he had it covered in Axios. I could see a date for...
Yeah. So, a lot of people... Best Stocks is kind of a funny name because it's just like the most generic possible name for a finance podcast. What's your finance podcast called? Best Stocks. Uh, but I think that historically, you know, one of the main downsides of podcasts was that they always had this lag, right? They were recorded, edited, and then eventually published. But people... and so like in some ways TV remained competitive as a place where if you wanted to understand what was happening in the markets you turn on CNBC, right? It's always on, uh, you can always kind of get an update there. And so I think that like real-time podcast, that was part of what I think helped us get some traction early with the show was that we were publishing every single day so it was like kind of a real-time look into the markets. I think that this show, I haven't listened to an episode yet, I'll try it on the way home. But, um, I wouldn't be... uh, given the popularity of, I think there's like a real-time politics one, uh, that has done very well on Apple Podcasts. Um, I think that this show could find an audience, right? It's basically NotebookLM but a little bit more curated, probably a little bit more opinionated. You don't have to like do prompting yourself. And, um, I would expect this to get some level of traction of people just wanting to turn something on, understand in real time what's happening. Um, and it uses obviously the existing distribution. So, uh, we'll see. But, um, not as bearish as some of the other people.
Well, let's switch over to Amazon. Why is Amazon buying Starlink rival Global Star in an $11 billion deal? Uh, the race is heating up between Amazon and SpaceX. Uh, so Amazon's buying satellite operator Global Star in a deal that the company's estimated at about $10.8 billion, seeking to build a business connecting consumer smartphones with satellite internet connections. Uh, the deal would give Amazon's LEO satellite ventures a boost as it vies with SpaceX's dominant Starlink network. The Elon Musk-controlled satellite business has been launching satellites designed to connect to consumer devices and signing agreements with mobile carriers. Here's what's at stake. Amazon plans to launch new satellite-to-cell phone service in 2028. That feels far away, but I guess it's only two years away. Uh, a big factor in the deal is Global Star's control over spectrum resources, which we've seen trade hands a few times now. Uh, which Amazon could use to provide satellite links to smartphones. Those wireless assets would enable a plan for Amazon to deploy its own.
AST SpaceMobile's down 10.5% in five days.
Selling off on this news. Yeah.
Yeah. I mean, maybe people are worried about like a duopoly here. Uh, I don't know. Ben Thompson was talking about AST. Uh, where is it? AST...
He's joining the AST SpaceMobile retail army.
SpaceMobile. Uh, yeah, he said, uh, this isn't the only example of leaning companies wanting to avoid being at the mercy of SpaceX. Verizon is at it again, uh, in terms of their own satellite service, doubling down on their investment in AST SpaceMobile instead of coming to a deal with Starlink for not just better service but service that actually exists. So AST SpaceMobile is years behind. They don't have a constellation actually up and active yet, but they have plans to, uh, and to that end...
They have concepts of a plan.
What other company is the clear leader in that space? Well, it's the one that Ben Thompson expressed hope last year would lean into a SpaceX partnership, and that was Apple. And so he says the problem he noted is that it was hard to see Apple and SpaceX ever resolving who would actually be in charge. Apple clearly agrees because they are not only declining to work with SpaceX, I actually think they were the driving force in this Global Star deal. And so the battles between all the different tech companies continue to rage.
Yeah, and AST SpaceMobile now has a heavily, heavily funded competitor in the same general category.
Yeah. There was a moment where...
Like, Amazon's not spending $11.5 billion and then just going to be like, all right, we're going to try to run this super efficiently. They're going to invest heavily, have the insane distribution of the core Amazon business.
Uh, as they get to scale.
Yeah. They don't have devices and so they won't be fully vertically integrated. But what Ben Thompson's pointing out is that Apple might not want to have a single point of leverage there with SpaceX. And so they're balancing the two out. Uh, overall, SpaceX's overall Starlink fleet numbers around 10,000 operational satellites. Elon had this cool chart of 10 to the 0, 10 to the 1, 10 to the 2, 10 to the 3, like the exponential every 10x number of satellites, and they check them off at Starlink HQ when they get to the next order of magnitude. Um, the company plans to launch thousands more in the years ahead. Starlink has deployed more than 650 satellites dedicated to providing connections to cell phones as of the end of last year, connecting more than 12 million people. According to the company, Global Star operates a network of satellites and in recent years has provided Apple with satellite links to support features for iPhones. Apple's service allows users to send text messages, call emergency assistance, and seek roadside help in areas where cell phone service isn't available. And the Global Star service has always been slower than... it's high Earth orbit, so it's a lot slower than a Starlink connection, but they are already working with Amazon to figure out the next iteration of that. So, Amazon said Tuesday that it had agreed to a deal with Apple to power satellite services for its iPhone and Apple Watch and to work together on future satellite services using LEO's growing network. Global Star has separately been working with Canadian satellite maker MDA Space to develop new satellites that Global Star would own with capacity dedicated to Apple. So, Global Star's global spectrum rights became more valuable as SpaceX and Apple began more aggressively using satellite links to connect phones. So connecting cell phones through satellites is still a nascent market. Most consumers who live in urban areas get links through traditional telecom providers. Carriers that have struck satellite-to-smartphone deals have promoted them as ways for consumers to always have some degree of internet connectivity in remote areas. T-Satellite connects you where towers can't, T-Mobile says of its offerings through Starlink. Uh, SpaceX of course has a rocket advantage. They have a fleet of Falcon 9 rockets to build the biggest satellite fleet in history. Amazon has been splashing out billions of dollars to other launch providers including ULA and Blue Origin to build up the LEO network, but delays have slowed Amazon's effort. You have a take?
Yeah, I mean, I wonder how smoothly this will lead into space data centers because I know Blue Origin has talked a little bit about doing that.
Yeah, I think they got some permission from, I think, the FCC, but, um...
Yeah, like, it seems like this is the natural endpoint. Uh, you're basically just doing similar things to Elon.
Yeah, I was reading, I think Ben Thompson mentioned it about Global Star's original... what was it? The... is it processing? So, uh, so, uh, Global Star's assets are all things considered pretty middling. Uh, 24 satellites nearing the end of their 15-year lifespan. So, they only have 24 satellites up there, and they use a bent-pipe architecture, which is signal relaying only, no onboard processing. So, I think it's actually just a reflector dish. I'm not sure exactly how this works, but that's what it seems like. Maybe there's... I mean, he's saying there's no onboard processing. I'm not exactly sure how detailed that is. I want to do a little bit of a deep dive on what the bent-pipe architecture implies. Uh, because it sounds like mostly just a reflector dish up there, but it works because you can bounce, you know, you have ground stations, you can bounce stuff up and still...
This is reminding me, why did Allbirds not kind of rally their pivot around space data centers?
They should have. Yeah. Huge.
Why are they doing data centers when, you know, compute on the ground?
Yeah, the new meta for sure. Maybe. Yeah, who knows? Maybe next week they'll be looking for another story and that'll be it. Uh, they have 24 ground gateway stations across six continents. There are some new satellites on the way to keep the constellation going, but it seems likely that still on the drawing board, higher capability satellites will be scrapped. Approximately 8 megahertz of the L-band satellite uplink and approximately 16.5 megahertz of the S-band satellite downlink and N53 terrestrial spectrum for private cellular networks, not phone-to-satellite communication that is licensed out. So those assets by and large serve one customer, Apple. Apple owned a 20% stake in Global Star and had rights to 85% of Global Star's network capacity for the satellite service it provides to iPhones and Apple Watches. So that's certainly a valuable relationship, but it also meant that Apple had a de facto veto on any Global Star acquisition. And so what he's arguing is that Apple is very happy that Global Star and Amazon are teaming up in this way to provide them with another option.
Apple's like, hey, we love all capex that is not our capex.
They really do. They are the master of that. Uh, we'll have to come back to the story of the Apple new Ray-Ban competitors, the smart glasses, uh, because we have our first guest in the waiting room, Kiva Dickinson from...
Groos Pea, how are you doing?
Doing great, guys. What's going on?
Uh, it is great to see you. I was looking in your background trying to see if we could maybe see...
Our own office in the distance. You're...
Yeah, we're looking northwest. Where are you guys? Okay.
Okay. We are more east. Okay.
Um, so not quite, but great to see you on here. How's your last week been? Was that your first, like, billion-dollar exit?
First billion, yeah, for sure. And, um, that definitely, definitely the biggest exit that we've been a part of. And, um, yeah, it's been fantastic. It's exciting to share the good news and really incredibly thrilled for the company. Um, spent a lot of time with them this week.
And fantastic for the category overall. Uh, you guys have been through it. Uh, obviously you never lost faith, otherwise you wouldn't have invested in Goons, but certainly it's been funny today watching Allbirds have new life. Hopefully your portfolio isn't getting any ideas, you know, hey, you know, the supplements category is running away from us, but we can pivot to AI compute. But, um, but yeah, walk... give us... I wanted to have you on just to kind of get an update on, like, consumer investing broadly.
Can we start with, like, some background and...
How the fund was set up, how you got into investing, all of that.
Yeah, totally. Um, I started my career in investment banking, uh, joined TPG about 12 years ago, uh, in the consumer group. And, you know, I think it was an incredibly formative time of learning what private investing was and, you know, learning about consumer businesses. But what I was thematically excited about was really uninvestable for us. I was seeing these incredible companies lining the shelves of Whole Foods and Target that were getting more and more exciting every year, taking share from the companies that I had grown up with. Uh, and, you know, when we talked about them internally in our investment committee, the problem that we faced was they didn't consume enough capital for us to get our kind of $200 to $300 million minimum check in on the way up.
And we couldn't outbid Unilever or Mars on the way out.
And so my takeaway was like, I'm in the wrong seat. Like, I got to be doing something in the earlier stage, some part of the early journey of these companies. So...
So wait, double-clicking on that trend that you see. I think everyone's familiar with the boom of... I mean, there were a bunch of different factors and I want to know your take on all of them. Like, Whole Foods at one point had, like, local buying. So if you could go in and, like, talk to the local Whole Foods in your town, they could actually stock you. They didn't have centralized buying. There was also the DTC boom, uh, online advertising, the influencer boom, celebrities getting into the space. Like, what were you identifying as the undercurrents of that broader trend of, like, new products taking shelf space on the shelf?
Yeah, I mean, this was definitely, like, height of the DTC boom. And so what was being talked about in the technology industry and in the press were companies, frankly, like Allbirds and Casper.
And I think that was distracting a lot of attention and capital away from what I thought was the most interesting thing, which was when you walk through the aisles of a grocery store, you see completely different things than you did 10 years ago.
You saw companies like Kind Bar taking enormous share and transacting with Mars. You saw companies like Bai selling to Dr Pepper Snapple for like $1.7 billion. These were not grabbing tech headlines. These were not grabbing traditional venture capital. Um, but they were taking share of an absolutely enormous industry. I mean, consumer packaged goods, depending on where you get the info from, is like 7 to 10% of GDP.
Yeah. Yeah. Bai is such a funny story because, uh, I mean, it has a traditional startup founder in his basement making the product, grinding unique insight, but, uh, during the DTC boom they didn't have a DTC website. Their website was just links to Amazon. They never set up a first-party e-commerce site because they just didn't need to. They went... which can make sense for...
Oh, it makes a ton of sense. Beverage specifically.
Yeah, exactly. Beverage is really expensive. Amazon has the logistics for it. Um, so yeah, what... so walk me through the decision and how you actually positioned yourself to get in at the earlier stages.
Yeah, I mean, I made a stop at a company called CircleUp. They had pivoted from helping emerging CPG companies raise capital to actually raising a fund. And, um, TPG invested in the fund. I kind of put my hand up and said, hey, this sounds awesome. I want to be part of this.
Um...
Did we lose you? We lost you. Oh no. It's called NutPods. That we eventually... Did I lose you guys? Yeah, just for a second.
Yes. We invested in a company called NutPods that we eventually sold to VMG, and then invested in a company called Liquid IV that we pretty quickly turned around and sold to Unilever in about two and a half years. And it showed me what the risk-reward can look like. It showed me also that the early-stage companies had a real pain point at Seed and Series A. They needed not just like specific specialized capital from firms who understood their journey, but also resources and common challenges for these companies look different from early technology companies. It's like, how do we do online growth marketing? How do we launch in retail? How do we scale a supply chain? How do we deal with not having all our eggs in the basket of one contract manufacturer? Traditional venture capital firms were not built to solve these problems. And so in 2019, I broke off and basically tried to build a proof of concept of what a modern venture capital firm built to serve these companies could look like. That's what Selva Ventures is today. We're now investing out of our second fund, and that fund has been a part of, like you see, I said Grüns, but also businesses like OLIPOP, Javy, Midday Squares, Array, to name a few. What's the, sorry...
Yeah, what does best-in-class look like today? One of your portfolio companies, which I won't name because I don't think that it's public, I was able to watch them go from basically zero to hundreds of millions of revenue in the span of like, I think like roughly four years, something like that. Very, very short period of time. Very small team. Is that like, is that kind of what you expect out of a good investment, or are there still some like, you know, kind of like slow burn kind of, you know, companies that kind of like find that takeoff moment quite a bit later?
Yeah, there are longer journeys, there are shorter journeys. Grüns is probably the shortest one I've ever seen. I mean that business is like 32 months old now since launching to consumers. I think what we do find is that the combination of online subscription, which for a great habitual personal care or supplement business can be really, really sticky, like software-like retention, plus the scale of the best retailers out there — I'm talking Walmart, Target, Costco, Sephora — you can build a very, very large business that doesn't consume a lot of capital in a pretty short period of time. And so when we talk short, like we underwrite our investments to five to eight years, you know, the exits can certainly be shorter than what we've started to see in the technology markets of like longer-dated IPOs. But you know, the off-ramp for these companies is traditionally, you know, like Grüns in the best-in-class way, an exit to a strategic once you're somewhere between one and three hundred million dollars in revenue. And that's something if the flywheel online and offline is going, you don't have to wait too long for.
Yeah, it seems like a, I mean, it's a great outcome whenever you see one of these unfold. I mean, Grüns is particularly fast, but there's a lot of examples of, you know, raising money carefully, deploying it, growing steadily, figuring out the product, the supply chain, and then exiting to a strategic. We've seen that over and over and over again. Do you ever run into founders who are like, I'm going to take on Unilever, I'm going to become the next Unilever, I'm never selling, and I'm going all...
I think everyone says that until they get an offer from Unilever at over a billion and then...
But I'm just wondering like...
We have it. It's funny actually, when I started this firm, I'd have a bunch of traditional VCs send me pitch decks to be like, what do you think? And the subject line was like, the next P&G or the next Unilever. These are incredibly sophisticated organizations. They are so good at manufacturing, marketing, sales, distribution, regulatory. What they're not good at is innovating. And so the idea of like building a new one from scratch is kind of like... it's like you need to do the hard scale. Yeah, you need to do the innovative thing and do that really well while simultaneously doing it multiple times and getting the scale and the systems and the distribution dialed, which... I mean, the one in our space that people naturally talk about is Harry's. They're now called Mammoth Brands, but you know, they had a definitive agreement to be acquired by Edgewell, who owns Schick, like six years ago, and it was blocked by the FTC. And yeah, you know, now their only path is going public. And in order to go public, they need to basically build the modern P&G. And so, you know, they bought Cremo, they bought a personal care business called Lume a few years ago, and like they're probably the closest thing to it. But I think these like pure-play fast-growing disruptors are really what we focus on because we feel like, you know, you take share, you cause enough pain for these modern companies, and you fit very well into the machine that they have built.
Yeah. Are you expecting chaos in the supplement category going forward after an exit like this? I'm assuming there's at least a hundred pretty smart entrepreneurs that think, you know what, I've always wanted to build a supplement company and start going after it.
I'd say like 2022, 2023 when the market crashed, there was a period of time where we talked about how all the tourists left CPG investing and it was sort of locals only. And I would say the space was sort of undercapitalized. That's when Grüns and I know a number of your other winners formed, which is fitting. That tends to be a great time to form a company. Also a hard time to raise capital, but you know, the competitive dynamics benefit you. I really hope that we don't have a flood of half-baked ideas backed by, you know, non-traditional investors coming in and doing this the wrong way. I feel like there's still a lot of scar tissue from the industry when traditional venture capital started backing DTC brands in the mid-2010s. And like obviously it's ironic with the Allbirds pivot today, but like I feel like I spend a decent amount of my time explaining to people why we don't invest in businesses like Allbirds and why CPG is fundamentally different than that. That direct-to-consumer is not the purpose. It's the products themselves and how much better they serve the consumer.
Yeah, that makes sense. One thought is that I feel like a lot of VCs are paralyzed right now because they've invested a significant amount of money into the labs, but they want to invest in more companies because they have capital to deploy, but they're afraid to invest in the app layer and traditional software because of just AI disruption broadly. And I think that could lead at least some folks to deciding to, hey, maybe we should take a flyer in this. Let's just throw like five million bucks in this CPG company, you know, Grüns is a good comp for it, you know, why not? It's just, you know, so hopefully you don't...
If I were those folks by the way, I'd be looking at the technology stack of Grüns. I mean, Chad, who you had on last week, was a great interview. Like he publishes a lot on LinkedIn, like all of his vendors, all the technology solutions. I mean, there is a huge opportunity to be the picks and shovels of this type of company that will not stop taking share from large CPG and are willing to, you know, try out new AI tools or new technology tools.
What outcomes have there really been in that? Because again, that was like a wildly popular category during the DTC era too. It was like, I'm going to invest in the brands and then I'm going to invest in the technology stack. And you had like the Klaviyos of the world did well. Obviously Shopify has been incredible, but it's hard to think of a bunch of other examples that got out at actually a venture scale.
Yeah. None obviously come to mind, although there's been some smaller attractive exits. I mean, one of the best like tech-enabled Amazon agencies sold yesterday. And so like, you know, you got to think about entry prices and the value creation to the early investors in these companies. They don't have to sell for billions of dollars to be really interesting investments. But you know, we see companies all the time that are just like changing the way these companies operate and reducing the number of people that you need to run a CPG business that interfaces with the physical world. So you would think naturally would need more people. I think it's really...
Do you guys do any of the infrastructure or are you...
We don't, but we try and be pretty fluent in it. I love the focusing. It's basically like there's two companies a year that you need to find and back and you need to try to... We're hunting for them. Hunting for them. And just focus all your energy on that.
So, I mean, on that hunt, you said you wouldn't back just a DTC company with, you know, decent growth metrics potentially. The product matters. What does that actually look like? Is it all your own taste? Are you doing surveys and panels and trying to understand where the white space is for a particular product? How durable that white space is? Because every once in a while there's like a new co-packer that comes online and unlocks a new stick pack or a new gummy format or something and then there's a boom around that and it feels differentiated, but really what you're looking at is like, oh, there's just a new piece of machinery that's in a bunch of different co-packers. So what's your process for actually understanding whether a company has a great product and will continue to be able to compound on the back of like the quality of the product?
Yeah, I mean, I think you got to be pretty thoughtful about value proposition and a lot of new consumer value propositions for a CPG product are like downstream of changes in how nutritional knowledge and human health plays out in our world. So, you know, GLP-1s have a bunch of downstream effects. We don't just invest in GLP-1 companies. We invest in companies that ultimately take share because of a world where GLP-1s are important. And so the first thing we're trying to understand is like where is the puck going in terms of human understanding and therefore value proposition in the future. We're trying to find signal of great companies with DTC and offline metrics and then most of our job frankly is figuring out what are the false positives, like what are the reasons why a company might be growing really fast and efficiently that ultimately won't translate to successful omni-channel distribution and velocity and a successful acquisition.
That was the thing with Goonies that I think some people maybe like were, you know, drove them to pass is that there had been that company on Amazon that had scaled to like 500 million or something like that in sales. I was doing that. Yeah. Goonies just basically no value creation at all even though they had tons of sales and I think people kind of like wrote off gummies as a category. And clearly that was, you know, wrong.
Yeah, we were grateful for that misunderstanding.
Sure. What about the temperature with LPs right now? I imagine that you have a unique value proposition and LPs are watching, you know, so much like K-shaped winner-take-all dynamic in AI and it's such a complicated industry to allocate towards. What are you hearing from LPs on appetite for consumer packaged goods investing broadly?
Yeah, I think it's a lot of curiosity. You know, naturally these are things that they see in their physical world and you know, when an outcome like Grüns crosses, but Grüns is not the only one, by the way. I mean, Poppi, Dr. Squatch, we've had actually like a slew of billion-plus dollar acquisitions in the past year in our industry. And so, you know, they see that in their news cycle. They see it at the grocery store. I think there's a curiosity moment like what's happening here and how does it work? And I think a little bit of that is trying to square that against what they've heard about the DTC revolution not working over the past 10 years. And so I would say there's a wading into the waters. There's definitely anytime a new cycle of these acquisitions hits, like people start to double-click and try to understand it and spend time. I think what we found in our meetings specifically is folks appreciate the specialization in recognizing that this is different from technology. So if we were a traditional firm that was trying to spend 15% of our time on it, I don't know that we could do a very good job on this. Us spending 100% of our time on it feels like, you know, more comfort in their mind, but a little bit distant from what they usually do.
Yeah, that makes a lot of sense. Yeah. And I think at this point like if somebody starts a consumer brand and they are talented, they will get introduced to you some way or another and so you can kind of like meet every great entrepreneur which I feel like would be basically impossible in like traditional tech investing. So that's the goal.
I mean there's not a lot of people that, I mean there's a few firms that we love and respect that do this but like one of the reasons I started this firm is like there's no Benchmark, Sequoia, a16z. Like if you're an entrepreneur out there like there's not that firm that you've always dreamed of partnering with in getting started and so you know eventually myself and a few of my peers decided like we've got to go create that firm for them.
Amazing. Love it. Well, congratulations all. Thanks for coming on to break it down and have a great rest of your day.
Good to see you. Great to see you guys.
We'll talk to you soon. Up next, we have Aron D'Souza. He is the founder of Objection.AI and the Enhanced Games. He's in the waiting room and we'll bring him in to the TV Ultradome.
I'm great. Thanks for having me on the show.
Of course. Thanks for being here. Do you want to give us a little bit of your background? You've done a lot in your time. I'm super interested in Enhanced Games and then we can go into Objection.AI at some point, but how are you introducing yourself these days as a multi-hyphenate?
Yeah. So I'm a lawyer by training. When I was 24 years old, Peter Thiel hired me to lead his litigation against Gawker Media involving the wrestler Hulk Hogan. We won the largest invasion of privacy judgment in history. It's the subject of the bestselling book Conspiracy by Ryan Holiday, forthcoming movie starring Ben Affleck and Matt Damon. And since then, I've gone on to found nearly 12 companies. You know, most famous for the Enhanced Games, the quote-unquote steroids Olympics, but launched today my new one, Objection AI.
Okay. Do you know who's going to play you in the movie yet?
I don't know. It's, you know, Hollywood is not like Silicon Valley. It takes them a very long time to make a movie and it seems to go through a lot of different iterations.
Yeah, it should be interesting. Well, let's, I would love an update on the Enhanced Games. The first event is happening in late May. Is that correct?
That's correct. In Las Vegas.
Las Vegas. And talk to me about the scale, the potential value, the goal with that project. It certainly got a lot of attention. Everyone has a take on it. Yeah, the timing feels pretty good considering it feels like more people than ever are enhancing themselves. Oh yeah, with GLP-1s and stuff on which, you know, some of them are banned, some are not in traditional sporting events, but yeah. But what led you to the Enhanced Games and give us the update there.
Yeah, I studied philosophy as an undergraduate and I've always been interested in bioethics and I read a paper by Professor Julian Savulescu who's a professor at the University of Oxford and he actually argued back in the 90s for an enhanced Olympic games. And I learned that nearly half the athletes in the Olympics admit to using banned performance-enhancing drugs yet less than 1% get caught. So there's this like real disconnect. And at the same time things like peptides, TRT are becoming increasingly normal. You know, even people like Secretary Kennedy, you know, our health minister in the United States is quite an advocate for human enhancements. And so I thought to myself, you know, why should we be shackled by the ideas of the past and shouldn't we be able to unleash the full level of human potential using the best of science and technology? And that's where the idea of the Enhanced Games came from.
Yeah. How many athletes have actually stepped forward and said that they want to participate? Like how big is the movement at this point? Obviously the first games is happening. Do you want to put it on this similar like every two years cadence? Is there demand for more of a UFC-like schedule? How do you think this all works out?
The aim is for an annual schedule. We're very pleased that the company is going to go public through a SPAC combination on the New York Stock Exchange in the coming weeks. Obviously, I stepped down from being CEO a few months ago to focus on my new venture, so I can't speak to the exacts of the SPAC. But a $1.2 billion valuation we're very happy about. And ultimately, it's not the number of athletes participating, it's the quality of athletes. So we have Olympic gold medalists, we have world record holders. And in fact, we've already set our first world record in the 50 freestyle.
Which was set by Kristian Gkolomeev of Greece in an exhibition event last year. He swam faster than any man in history had up to that point in time. And he had only been enhanced for a couple of weeks. And so to show you how much of a difference that could make, Kristian was 31 years old at the time, which arguably is about 10 years past his prime for a swimmer.
Oh, interesting. Okay. Well take us through Objection AI. What's the thesis? How do you, like what led you to start another company at this moment in time?
I believe that the fundamental problem that we face in our society is truth. There is no sense of an objective arbiter of truth in our society and this is something that has caused great societal decay. If we don't have a shared sense of truth we can't have a functioning civilization. And you know, two decades ago we would have said the New York Times is the arbiter of truth. And today, you know, the social platforms don't seem to care about it very much. AI juggernauts don't seem to care about it very much. And so I said to myself what is the best way to find truth? And truth is not a vibe. Truth is a process. And that process is very well documented in courts. Courts are viewed by Americans as being very trustworthy entities versus the legacy news media in particular has seen a collapse in credibility. 50 years ago, according to the Gallup poll, 70% of Americans trusted the media. Today, that's down to only 30%. And so, the goal of Objection AI is to create a system where anyone can challenge a claim made in the legacy news media. Independent investigators will then investigate it, former CIA and FBI agents, and then all that data is presented to an AI jury to analyze, to figure out if the original claims made by the journalists were true or not.
Interesting. Yeah, something that's, it feels like community notes have been a good innovation for like truth online, but the big flaw is that by the time a post gets like a solid community note, oftentimes like a million people have seen it already. They didn't know that there was... Yeah. So I mean the logical follow-up is, is speed a problem here? Because I imagine that if you have to run a whole jury process and have discovery and argument, like the original claim could be baked into the society's like mind share before you have...
That's the fundamental problem about news media today is that false information spreads six times faster than true information. And so the incentives for generating clickbait content is very pronounced and we've known this for a very long period of time. And so by compressing the legal process which often takes 10 or 20 years and costs $10 million as we learned in the Hulk Hogan lawsuit down to something driven through software and artificial intelligence down to a couple of days, we can adjudicate factual disputes much, much quicker and much cheaper. The whole process on Objection can cost as little as $2,000 and can be done in as little as 24 hours.
So is the business model to sell directly to people that want to contest claims that are made on the internet?
