You're watching TBPN. Today is Wednesday, October 14th, 2026. We are live from the TBPN Ultratome, the temple of technology, the fortress of finance, the capital capital.
That's right. Let me tell you about ramp.com. Time is money. Save both. Easy to use corporate cards, bill pay, accounting, and a whole lot more all in one place. Ramp also donated a thou uh maybe more. They donated to $100,000. $100,000. Very generous for them. Uh Jordi, can you get us up to speed on what's going on with Ben Wilson, the creator of How to Take Over the World, the podcast? He's
Yeah. So, Ben Wilson uh is on David Senra by David Senra today. Uh Ben uh very unfortunately has stage four cancer and four kids under the age of five. Senra says, "I want to help him as much as possible." So, I invited him on the podcast to talk about his work, studying history's greatest leaders and what it's like getting told he's going to die at 38. He's a good friend. He's a good guy, a close friend, and one of my favorite podcasters. His work has benefited millions of people all across the world. Please watch this episode and see if you can help with medicine, introductions, or donations. So, uh we just want us to share this at the top of our show. Um and, uh I've only met Ben once. Um but uh really really amazing thinker and and uh incredible show and and um I I recommend checking out the show as well.
Yeah. Uh well moving on. Thank you to RAMP for uh supporting and uh you should as well. Uh let me tell you about Figma agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. Um the we covered at the end of the show yesterday, but uh I mean uh pretty huge news in the world of corporate espionage. OpenAI caught someone planting a bugging device by having a hidden camera behind one of its TVs. Uh and so this was all over the timeline. We discussed it at the end of yesterday's show, but uh Abdul Rahman al-Asiri, the alleged OpenAI spy, used an AI generated image of himself speaking at Stanford University as his LinkedIn and X profile despite having no documented connection to the school. So, uh but there's a community note on this. There there's a lot of people going back and forth. Um, apparently his actual profiles now show uh the real uh information, but uh there's a whole bunch of back and forth, but it seems like it was a pretty simple device. Uh I I saw some reports that uh it was a cheap Chinese-made uh recording device wrapped in toilet paper and inserted in the back of television in an executive conference room. Um and um uh folks are saying that it cost maybe 15 bucks, something like that. Uh, and so there's also debate over, you know, uh, is he is he an American citizen? Is he a Saudi national? There's a picture of him alongside uh, Saudi Prince, Crown Prince Mohammed bin Salman in 2018, but you know, anyone can stand in line for a photo for a photo op. Um, but, uh, this story is developing. The FBI is truly investigating this. Um, and so uh, it'll be interesting to see what comes of this, what the motivation was. Kylie Robinson called it amateur hour. A chatbot account associated with the engineer's spouse which shared identifiers with his own account submitted prompts about building and concealing a continuous audio recorder, adding Wi-Fi connectivity, listening remotely, and encrypting its memory card. According to the complaint, the account also submitted questions containing details specific to the recovered device, including its unique network identifier.
Yeah, pretty simple, like how do I commit a crime? Like typing that into the computer and so uh not discovered preemptively oddly enough but uh seems like a pretty smoking gun if you're searching how do I spy, how do I create a recording. Yeah, the whole thing the whole thing is just very confusing like this would this would make it seem like he's a lone wolf, right? If there was any type of like sophisticated operation, you would think they'd be like, don't worry about learning how to spy, little bro, we got you.
Yeah. Yeah, totally. That is weird for sure. And then the other thing that's odd is that uh the AI safety world, the general AI companies will be spying on each other. It's usually around or nation states, it's usually around like stealing the weights or and and using the weights for the frontier model for bad purposes or stealing the intellectual property. There's been a lot of back and forth and lawsuits around intellectual property, but you don't get that from eavesdropping on an executive conference, right? An executive like there's no there's no meeting between like Sam Altman and Greg Brockman where where they're just like let's read off the weights to GPT-7 starting at the beginning zero seven five.
They're doing a table reading.
They're doing a table reading. Seven nine. No, like they don't that that's you're not going to get anything. You're going to get like strategy like corporate strategy which is maybe valuable if you're like trading the stock market but it's not it's not like you're going to listen in on a conversation and be like okay I know how I I just yeah I can just reverse engineer the next model which is very odd. So, the motivations here are complicated. Like, it could be purely financial, could be something more nefarious. Uh, we'll let the FBI investigate. I think that's the photo of David Senra that just slammed down. We got a new one in the Ultratome.
There we go. Looking good. Always with us. Um, anyway, the uh the OpenAI spying spy listening device uh story. I mean, it's all over the timeline. People are having fun with it. People are worried about it. I'm sure the FBI will investigate and we'll have more information. But, uh, I don't really have a strong take other than like it's bad. Don't spy. Um, and it and it reinforces the stakes like security is really important. We know this. We've been talking about this. Um, but, uh, it was weird because LA yesterday I was talking to somebody and they were uh, and they were saying, "Oh yeah, the Instagram meta ads are so good." Uh you know because they you know obviously because like they listen to my...
It's so funny and covering up covering it up with toilet paper.
Would that not if you're looking behind a TV and you're like what's that electronic device covered up with toilet paper like that to me is much more interesting and concerning.
If it was just a USB stick I would oh somebody left a USB stick because they were looking at uh photos on the on the or if they just put like a fire an Amazon fire stick back there. You wouldn't know. You wouldn't be You wouldn't notice it. You would only notice it if you were actually sweeping.
You just like go back there and it's like glue and tongue depressors and and Lincoln logs and some Legos back there. It's like what? Yeah. It's going to draw your eye cuz you're like toilet paper should never be in an electronics cabinet period. Like there's no reason for it to be there. As opposed to like USB USB cables are they belong back there.
Yeah. Or something that looks like an HDMI.
Yeah. Exactly. Yeah. Anything. Put put a put an Xbox back there. Put I mean, you could literally put like a something in the shell of an Apple TV or in the shell of a of a Nintendo Switch and somebody would just be, "Oh, it's a Nintendo Switch." And you could put something inside of the device. Sorry, we're giving spies like ideas now. This is bad. Forget what I said. Don't do this. Don't spy. You're going to go to jail. It's really, really bad. Um anyway, um yesterday I I I was just laughing because somebody was like, um oh yeah, like you know the Instagram ads are like so good now, but and like you know obviously like they're listening to uh they're listening to the audio around my phone like ambiently. Uh and that's why it's so good. And they weren't like alleging this as like a conspiracy theory that needs needed to be uncovered. It was just like a given. It was just like, oh yeah, that's like one of the strategies and one of the features. Like it's like of course they like listen to everything you say uh and then they target ads and the ads are better and it was just like it wasn't it wasn't like and I'm mad about it. It was just like and it it obviously happens with...
Um this has been debunked many times. Uh it was investigated by Wired in 2017. Antonio Garcia Martinez uh talked about it on Joe Rogan in 2022. His his reaction is actually funny. We should pull up uh the video that I put uh in the timeline of uh of Antonio Garcia Martinez on Joe Rogan. Uh I think it starts uh a couple minutes into this clip, but at around like 1 minute 20 seconds, something like that, because he like just sort of laughs and then explains like his position on like do they need to actually listen to you? But let's play this because it's a fun clip from uh history.
Let me ask you about this because we've talked about this multiple times on the podcast. Sometimes you're having a conversation about God. The microphone thing. The...
No, it's not real. No. No. I mean, I don't believe him. Do you believe the other day? I haven't searched for it at all. Okay. And I got an ad for it. Something me and you were talking about. What was it? I I if I remember right, I couldn't remember, but it was something we were talking about after the show. Six hours later, I'm getting an ad for it. Here's what I'd bet on. One of you two either searched or went to some website. Not only that, one of us. What? So, if I do, he gets an ad. Yeah. That potentially. Yeah. How it has your geolocation, which is also kind of crazy, but it if it has your geolocation and your friend's geolocation, there's so many times when someone will recommend a product to me and then I'll see an ad for it and I'll be like, "It was listening" and it's like, "No, it has the receipt from the person that I'm connected with on Instagram and then it saw that we were both in the same place. So clearly we talked about that." Like it just inferred that. And then it shows you like 10,000 ads a day and so five of them are going to be like creepily accurate. Are you gonna put on the tinfoil hat? Are you are you a truther on this or are you are you a plan truster?
Plan truster. Okay. Okay. Um well um uh uh Facebook like straight up has on their like about page like we don't use your microphone unless you've given us permission and are actively using a feature that requires the microphone. So sometimes like if you are in a meta product and you turn on the microphone like yes it is listening then and so there are instances where people have like accidentally left that open and then obviously it does have that data and like if you if you upload a bunch of video of you talking about all the products you love.
Yeah. If you turn on the microphone for a split second there's an alert that goes off in Meta HQ. 10 people run into a room and they just listen and then they sort of brainstorm ads that they could that they could uh you know deliver based on that that...
I would like a social network that was like handcrafted ads like there's a guy who's like you know a Don Draper he like sips a couple martinis smokes a cigar and then really thinks about like okay what would be the perfect ad for this person to see and they pick it curation that's the future um but uh I I was wondering like How far are we from this actually happening? Because I know Meta will hold the line on it and they're not just going to like go in the background of the phone because it would be such a scandal and like after seeing the social reckoning like the in the uh like the opportunity to whistleblow is just so huge that you could be just like a a rank and file meta employee. If you find out that they're actually doing the the ambient voice recording uh and using that for ad targeting, it's just quit your job immediately. Get the whistleblower status Netflix doc book tour like you're gonna make way more money like the like the incentive to whistleblow on that is just so high I think that it's capitalism. Yeah I I I think it's probably uh like that's a that's a huge push back but I was wondering like is it possible that ambient voice recording does wind up influencing your meta ads somehow and I found a chain that actually can make this happen so there is a company that handles uh that handles business phone calls. So if you're on the call with a with a particular company and they use a particular AI AI system, they will actually transcribe that and then they put that data I think through LiveRamp which can actually get into meta ads manager as an audience. But this is a little bit it's not quite what you think because it would be like if you're on the phone with BGA Vanetta and you're talking about products that you like then that could wind up getting retargeted which you normally wouldn't think it would be retargeted because you're like there's no pixel on the phone but they are transcribing that but it's it's direct to that particular uh that particular brand and so it wouldn't be the really like whoa like I wasn't talking I wasn't even talking to a company. It's like you are talking to a company. But do you remember the LG drama that happened like uh last month?
Do you remember this? Okay. So, uh Palmer came on our show, I think last year, and was like talking about how terrible smart TVs are. And I think everyone sort of agrees that at the very least they're like clunky and they have too many features and they want to be like updated every every like five days when you use the TV. It's like we need a software update and they have so many different like things and they want to show you ads and it's all very annoying even though the TVs like look nice these days. Um, but last month, Gamers Nexus, they put out this two-hour YouTube video showing that LG TVs are like aggressively using spyware effectively. That's the allegation. So, uh, they scan the local network for third party phones and other devices. Um, the LG G5, uh, crawled the entire network and found dozens of unrelated devices, including smartwatches and phones, of the staff who didn't even know we were working on the this investigation. Uh, even when the TV wasn't online, the LG TV they tested was able to record sound around it. Uh, quote, "We were even able to capture microphone audio while the TV was unplugged from the network." Uh, this is because there's enough Wi-Fi hotspots in most neighborhoods now that are just like uh public basically through like a Comcast or a Spectrum like uh network sharing that they can like hop on something and just say, "Oh, okay. I I got access to the internet." It's It's crazy. Like um and so uh um...
I don't even think we need to go down the whole like you you can see through walls with Wi-Fi.
That's crazy, too. Yeah. So, uh Burke said the audio was reportedly stored locally via plain text, which could potentially allow the data to be sent to LG if the TV connects online again. And so uh like hard drives in memory have gotten so so cheap that you can basically be recording the recording the audio transcribing to text using like basically like a local transcription model. It's not like running a big GPU. It's just like transcribing text pretty easy and then it's just storing that as plain text and it can store like years and years of ambient text on like you know like one gig drive basically like it's it's just so small. Um, and so, uh, LG responded and said like, "Look, we like we're not really doing all of that, but, uh, they said we don't do continuous conversation recording." Uh, now if you push the button, don't worry, we take a break when you're not talking. Uh, if you're if you do active voice session, which is where you like press the button to talk to the TV, so you so you're actively want to do it, it will pick up conversations that are happening in the background. So, you know, the the the the privacy implications are like your, you know, your roommate is pushing the button and saying like put on Red Bull TV or something or the X Games and and in the background you're talking about, you know, um your plans for the weekend and then that that gets saved in the in the data. Um but that seems kind of obvious like you've turned on the microphone. Um, they did deny supplying ambient audio.
TR in the chat, by the way, says, uh, Xfinity has a feature that turns your home Wi-Fi router into a motion sensor.
That's interesting. They actually productized it. That's kind of I don't know. Yeah, if you're away, why not just have your Wi-Fi see if there's motion in your in your uh in your vicinity? Can it detect aura, too, or just motion? Yeah, that I mean that's the most important question. So, um uh so LG has this ad solutions product which can potentially feed into meta ads and make your Instagram ads scarily accurate, but they say they're not doing the full chain yet. But um so there's still like confirmation bias where you see a bunch of ads, but you see one ad for the thing that you were talking about and you're like, "Oh, it's so scarily accurate."
Wait, rewind. Yeah. Saying that your LG TV might be listening and then they might be passing that.
They say they're not, but they are listening. They have an ads product and it can connect to meta. So like we're we're like the technology exists but they haven't turned it on. I think is like the claim or they could have stopped doing it while they responded to that article saying we are not currently doing this and then potentially. Personally, I don't really mind it that much. I kind of just don't care if the ads are scarily accurate. I'm used to it, but um but it is it is odd. And also, it's just like TV, stay in your lane. Just show me the thing. I don't I don't want uh I don't want a bunch of other junk. Just charge me what it costs to make the TV. Um the dumb TV that Palmer has has kind of gestured towards I think will be really successful. Um, and uh, but uh, what what's interesting is that amid all this like privacy concerns around LG and it potentially listening to you and some backlash there, I think they fire I I think they did the Crisis PR effectively. I think it is like pretty clear that they're not actually just full open channel all the time piping it everywhere.
Yeah. So, on that note, how likely are you to purchase an LG TV going forward?
I already did. They're the best. Like I I just don't want to mind it. It's just going to know that. It's just going to listen to my my, you know, voice recordings and be like, "Wow, this is sick." Like, "This guy's awesome."
Motion detected. Exactly. No. Uh yeah, LG uh the LG G5 that they that they tried is actually like the best looking TV, I think. So, yeah. Um but I would love a dumb one. I would love one without all those annoying features. It's really It's really annoying. Like the software is the worst part. Uh I actually think that uh pretty soon I'll be able to jailbreak it and then I'll just have the panel and I'll and I'll take off all the software. And so I think that will be the great trade is that I bought the version that they think they're subsidizing with all their spyware.
There's no way they could make a TV that good for that cheap. You are the product. I mean truth you're flipping it on its own.
This is this is the Amazon model, right? Uh half of the half of the profit comes from ads. And so like if there's a world where you can get the product and rip out all the spyware and junkware and and adware, uh you're getting it for basically half off or like you're you're taking half their margin, which they will hate. But um I don't know. I'm I'm bullish. I need to figure out how to actually go and uh and reverse. I need I need a million agents. I need a million dollars of compute to to get this $3,000 TV to perform the way I want to not listen to every conversation. Yeah. Yeah. I need I need to marshal a million dollars of compute. Um but uh what's interesting is that LG has this drama and then like last week we touched on it briefly. Apple partnered with LG and Apple has this like you know really solid brand. Um and yesterday on the show I had it wrong. We were talking about how Google has Nest, Amazon has Ring, Apple doesn't really have enough smart home stuff. They finally solved that. So, they did this really deep partnership with LG and like two other manufacturers where the products I mean uh let me see if we can actually pull up the images because the products look sort of um Apple-esque like they they fit within the Apple ecosystem I think.
Let's see. Let's see about that.
Jordi's going to judge. Uh, I think they look nice and I think if you are an iPhone user, there's probably a benefit to going all in on one on one system. And I think if you went with these devices, the integration into HomeKit would be solid. Um, I don't know if I can. There we go. What do you think? What tier are you putting it in?
C tier. Okay. But compare that to the home view.
Why don't we compare to this ad of this new ad for the Apple home view?
Yeah, the ad was was a little rough. We can pull it up and play it. Um, but the home view is less exciting as a product and more just exciting about like it feels like Apple has had a bunch of irons in the fire around home and internet of things and like they finally have a strategy. But let's play the ad and see if it's if it's attractive.
So, I didn't realize this, but you can just this version. We need audio. Yeah. What was that was? Was that like that was a shot or is that a shot? Well, yeah. I'm the guy that does food. You're the guy that what? You you uh you start 100 different businesses and have zero followers. Carmen, I need you to check the frenzy. I feel like that was a shot. Huh? I'm saying this is why this is why I didn't want to come home. THIS IS WHY. YOU. WHAT THE WHAT? WHAT? You have the sensor button. That was so annoying. The bear is such a good such a good remarkably annoying, but great edit by whoever put that together. Very very funny. Uh, no, but uh I mean the critique and a lot of people have been saying this is like uh if you're if you're trying to get the family out the door in the morning, like do you really want an extra screen in the mix that's following you around? Uh you were saying that like around kids like this is just going to be a complete disaster. They're going to be either like fingers all over it or like toppling it over. You can get a wall-mounted version, which I think actually makes more sense in terms of like you might already have like a home security thing mounted or a thermostat mounted just mounting that and then at every point you can and then it's like an iPad that's attached. It's basically an iPad that's attached to the wall. Yes. Yes. Insane. But it's cheaper and it's smaller and so maybe that's good. I don't know. And it's designed to be like hardwired in like it's it it it it thinks of itself as like more of an IoT device as opposed to like it needs to go on the plane and perform on the plane too. So it needs a battery and it needs all this and that. So like you're probably getting something of potentially better value. But I think that like home view aside, whether you want that product or not, I agree it's probably the least exciting Apple launch in recent memory for me in decades in a while. Um, but I like the strategy. Like I think I think they're actually starting to crack like okay, we have a doorbell, a thermostat, uh, a camera, and a few other...
Partnering with LG does not count as having a...
It does. If it works as well as an Apple product, if it works like Beats where like it's actually...
But what are they what are they like either either take the category seriously and deliver an amazing product, buy Sonos, buy a bunch of...
You're telling me Apple can't make like a doorbell.
They don't know how. They literally...
They don't know how. We They don't know how anymore.
I don't know. Is it intellectual property? Why don't they just buy a doorbell or build one?
Who knows? But I like I would be the biggest fan of them actually taking the category seriously and going all in and making something that would was amazing enough that you would want to rip out whatever you had in your home.
Okay. So, but it doesn't seem like they let me give you four options for a theoretical smart home. You can put them in a tier tier list. Everything must be a tier list. Okay. So the first option is going the the the cornerstone of your the the first option is just chaos. The first option is just you get whatever. Somebody gives you an Amazon Echo, it goes on the countertop, you got an Amazon Echo. Then you buy a Nest thermostat, you got Google over there. Then you got an iPhone in your pocket, you got an iPad over here. It's just chaos. It's just random. Uh where does that sit for you tier tier-wise? That that's life. That's B tier.
B tier. That's not so bad. You like the obviously uh whatever is below F.
Below. Okay. F tier is the chaos mode. Random chaos. Okay. Now, let's let's do you're going all in on Google. You get the Google Nest thermostat and then you have to go get whatever their their Google Nest home thing is. And you you can't have a Home View. You can't have a an Apple HomePod speaker system. You're you're buying from Google when you want an IoT thing in your house. You got the Google lock.
A tier. Okay. Even though you carry an iPhone, you like the all Google products. Now, Amazon, you get the Ring camera. You can get the little drone that flies around your house. You know that one.
They have a drone that is like for home defense inside. That's a plus.
You get Amazon Echo, though. So, you're talking to Rufus a lot. How are you feeling about the Amazon ecosystem? Where does that go? We're getting the dog sound effect.
S tier for Amazon. Okay. And then the last one is Apple. Apple. You already carry an iPhone, but you're going all in on Apple. And that means an LG lock. You don't get a Ring camera. You get an LG. You get a thermostat. You're not getting Nest. You're getting the LG. But it all connects to home home.
I'm not signing up for global spy services.
It's all global spy services. It's all global. They're all global spy services. The Apple is maybe the least.
We just spent 20 minutes talking about how LG is absolutely the worst.
LG is the worst, but Apple's the best. And so it averages out to like Google and Amazon quality in my opinion.
That's actually a good point.
And the world Apple Apple came, they brought their sterling reputation, crystal clear messaging, and they said data is encrypted end to end in Apple Home. So your your your voice your your secretly recorded voice is encrypted and then it's transferred to the data broker who unencrypts it for him. No, no, it is encrypted. I I have faith in Apple security. But but how do you feel? I don't want to influence you too much.
Trey says Apple LG is Hublot tier.
Apple LG is shots fired. Oh no. Xiaomi is the real spy service. Yeah.
All right. So Amazon actually pull Amazon down into a tier.
A tier. And I can't believe you'd be an echo guy.
A fully analog home is S is S tier.
Okay. Fully analog. No devices. The Wi-Fi goes off at bedtime.
Yeah. Okay. Light switches. Light switches.
Yeah. Light switches. Actual doorbells.
A cuckoo clock to tell you what time it is. Yes. The I completely agree with you. A grandfather clock. Maybe a cuckoo clock and a grandfather clock. Yeah.
Yes. This is the actual correct thing. I think the fact that that's S tier, every Google and Amazon need to move down to B tier. They cannot be that close to fully analog, right?
Doesn't that feel more accurate? But now the final question, Apple, LG, spyware meets privacy company. The best of both worlds. Where are you putting it? Is it better than Google and Amazon? You would go Google or Amazon over Apple and LG.
I I like I want to buy American here, even if it's made overseas.
Which what does that mean?
Wait, they're all made in China. Literally, every company makes everything in China. What are you talking about?
Life's good. LG, I think that's fake news, actually. LG, they're all They're all made abroad.
Yeah, LG is a South Korean multinational that manufactures in China, of course. I'm pretty sure they sold the TV panel.
They sold the windshield to China.
I'm going I'm going I I'll give them one up from random chaos.
You You would go Google Home Nest thermostat Amazon Echo and Rufus over the thing that's on your phone that you carry everywhere.
I just don't see the It's like the the the most mid collab of all time.
Apple and LG. Apple Home products and LG.
I'd rather stay I'd rather keep it in the Schneider Electric or keep it in the Google family in the mix. So, you got that too. I don't know.
And fully analog, you also have cans with string attached to them. Fine. Instead of an intercom system that you electricity, like if you have if somebody's like at at like if you have a a gate outside your house and someone's at the gate like to deliver something and you can just talk to them through through the the can and it'll run through the string. Yeah. The audio is crisp. Yeah. Okay. I I have the A tier suggestion. I think A tier is is somewhat random chaos but puppeteered by your agent your AI agent because I do think that there are specific products that are better but if you bring them all together in one interface that you control I think that that will be within time people will be like yeah I just talked to ChatGPT and it goes and writes a API binding to Google.
You know what Apple could do to win me over? What Dirt says, a laundry chute. If Apple came out with the Apple Home View smart laundry chute.
Okay. What What is smart about it?
Uh it use it has a Palantir integration to track your laundry.
It could do biosecurity and see if you've been infected with a bioweapon.
Could scan your clothes on the way down. It could also it could also be running a constant inventory of your clothing and the value of your clothing on the secondary market to see if you've lost money or gained money on the rare pieces of Chrome Hearts that you've been collecting. Yeah. So, as you take off your Chrome Heart, your head-to-toe Rick Owens and Chrome Hearts outfit at the end of the day, you throw it down your smart laundry chute and it looks on Vestiaire for what the value is. Is that what Vestiaire does? I don't know. I think so.
Okay. Yeah. It goes on Vestiaire and says, "You you just gained $500 in market value on this outfit today."
Yeah. What would be the ideal home product collab? Could it be like a Monster Energy GoPro collaboration? Like once you're talking about Apple and LG, I think you got to expand into other other consumer electronic brands and just imagine what what a GoPro Monster Energy. So, it's like a fridge that has a GoPro inside and if you're out of Monster Energy, it orders more.
So, you're always in stock.
That seems completely reasonable.
Anyway, um, very, very fun. Let me tell you about public.com. Investing for those who take it seriously. Invest across all asset classes. Automate anything with AI agents. Run trading strategies, risk management, money movements, and monitor markets with AI agents for investing on public. Uh, I got a fun business idea, a way to make a little extra money this Halloween. So, um, with the power of artificial intelligence, it's easier than ever to file a lawsuit. So, here's what you're going to do. You're going to go to popular places where trick-or-treaters are. You're going to find the kids that have handmade costumes from characters that are not in the public domain yet. So Iron Man, that's still Disney intellectual property. So you show up and you act like you're doing one of those TikTok like man on the street. Oh, I love your costume. Is it homemade? And they're like, yeah, I did make it myself. I didn't buy this. I didn't pay the royalty. And you get their name and then you generate a lawsuit and you say like I'm I'm I'm here uh to serve you with intellectual property theft uh small claims lawsuit.
So John, LG actually makes a pocket photo printer.
And so why not generate the lawsuit on the fly and print it there? Exactly. Serve them.
Serve them. Right. And so then they're going to be, "Oh no, I don't I don't want to get sued. Uh you know, do you work for Disney?" and you have to be like, "Oh, don't worry about that." Um and then so then you you you offer to settle the lawsuit um on the street over Venmo or something. Wildly illegal. Uh but then there's a second step. So once you have all of these uh you know, adorable kids with their homemade but intellectual property infringing Yeah. costumes, you go to the studios. You take the meeting with Disney and you say, "Look what I've done. I've found so many instances of intellectual property infringement. We can clean up here. And they're going to look at you like, are you insane? You're going to ruin our brand. Uh, homemade costumes are the lifeblood of our fandom. If this gets out, it will destroy our brand. We will look like an evil corporation. And then you'll say, "Yeah, it'd be a shame if this got out. Let's settle over Venmo." So, you can Venmo me to make this go away. I won't release the footage of the lawsuits for the kids who are wearing intellectually like this like you got you got them pinned over here. You got exactly easy money this Halloween.
Couple extra bucks for you if you're trying to be entrepreneurial. Anyway, let me tell you about beautiful mind. Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. Um, there was something else that I wanted to talk about, but uh, we can run through some other stuff. Let's see. Um, oh yeah, the Oh, the other thing with the IoT discussion is just like Anthropic is warning that rogue AI agents may self-replicate and hijack every everyday devices. Like they did some studies that show that like inference can run on commodity hardware. Think like a PlayStation, an Xbox, even a doorbell. It'll be really slow, but it could potentially self-replicate. And so it's another vector of like you might not think security is important. You might only think like the Neo cloud, the the GPU cluster is uh is uh important, but uh the the Financial Times um put it in a very funny way, very different language from what Anthropic said. They said self-replicating AI worms will be able to hijack smart homes, Anthropic says. So yeah, maybe maybe the analog home is the future. Maybe you do need to have no smart doorbells because it'll just be ringing doorbells constantly trying to communicate with the other agents in the swarm or something. Who knows? Uh the other funny thing today is that KKR bought the front of the Wall Street Journal.
They stole they stole the windshield. I go to open up the Wall Street Journal today and the entire front page is just a full page ad for KKR's 50th anniversary. Uh it's a beautiful ad. Says, "People are counting on us. We say it every day at KKR because behind every investment are people counting on what comes next, a teacher counting on her pension, an investor building for the future, a portfolio company employee sharing in the value they create, a business shaping its next chapter for nearly 50 years. That responsibility has shaped how we invest." Uh, and they go on to talk about the what they do at KKR. So, happy birthday to KKR. Very exciting. What a better what a great way to celebrate 50 years in business, the business of private equity, than with a full-page spread in the in the Wall Street Journal. Of course, there is a real full first page that uh that appears be behind the the front page ad, but I thought that was a funny ad unit underutilized. More people should be running uh the full page Wall Street Journal ad. Um but there's a whole bunch of other stories. Anyway, um I thought that was just a funny funny way to advertise your 50th.
Also crazy that they also have another ad. They still have the normal ad on the back of Oh, you inside. Yeah. I mean, it's a full wrappering ad.
It's the It's the front of the journal and it looks like the front of the journal. So, when you go and you pick this up from a newsstand, it will look like this. And then the back is a KKR ad and then on the inside you get the full grade spread. Very cool. Um, so yeah, uh, is somebody in your in your in your life turning 50? What a better way to celebrate than this, you know? I can't think of something.
What's going on over Xbox?
Xbox, they started a lab to lean into Vibe coding and decompiled games. They recognize that it's good for players, but it might challenge the business model. But they're in a unique position being owned by Microsoft to potentially change their business model and not be so reliant on quarterly earnings. And so, uh, Asha Sharma over at Xbox is, uh, winning accolades. A lot of love on the timeline for her. Um, so she said, "Today we're standing up Xbox Labs, labs.xbox.com." And you should pull up the website because it's very very cool design showing all the different Xbox intellectual property in some fun things that you can like click buttons to change the the style. Uh but she sent this note to the team. Yeah, look at this. Uh Jordi. So uh and then click the different not the email sign up, but at the bottom there's like keys that you can click. You can click like Yeah, you can make it dark mode, light mode, color, black and white, green, and you can cycle through all these things. It's it's a pretty cool design and it looks like you can like draw on it and stuff. It was fun. Um, the first video games emerged some 75 years ago. In the time since, there have been booms and busts, but every year there are more great games to play, more devices to play them, and best of all, more people playing than ever. That growth has made Xbox what it is today. In recent weeks, we've seen games rapidly decompiled and rebuilt to run on hardware they were never originally intended to support. Windows PC builds have been translated to run on Apple Silicon, ported to run inside of a web browser using web assembly. Um uh but perhaps more surprisingly, we've seen many of the biggest games in the world have been remixed into the source code of another. We've saw this with Call of Duty and Minecraft, right? Um these experiments challenge long-held assumptions about our industry. The tether between software and hardware, the boundary between creation and play, and how people discover and experience games. While it's hard to predict the future, it's easy to see the possibilities in making great games easier to access. So these are unmistakably good outcomes for players even when they challenge our existing business models. To explore these possibilities, they stood up Xbox Labs, a small group of game makers, engineers, and scientists whose job it is to turn emerging ideas into things our players and developers can experience. We'll build in the open, learn what from what people can do. And so people are excited. John Palmer said, "If Xbox launched an official version of decompiled Halo with a forge mode and a marketplace discovery of mods akin to how Roblox works, they would make $1 trillion." Okay, maybe a little hyperbolic since uh you can do a lot of these mods for free, but um it is it is very interesting that they're at this threshold of uh do you want to completely burn down the old business model in favor of something new? Uh or do you want to try and fight it out and squeeze the the last egg out of the golden goose that is the traditional model? I don't know. Well, there's a deep dive on uh on GTA 6 in Bloomberg. It's pretty fun. Should we go through read the highlights? Let's read the highlights. GTA 6 has been in development for eight years. I thought it was longer. I thought they started it like right after GTA 5, but I guess it's only been eight years, which is still a really long time. The original version included large areas of North and South America, but the scope was eventually reduced to Vice City, Miami, and its surrounding regions. Uh Rockstar initially planned to develop GTA 6 alongside Red Dead Redemption 2, but RDR2 required most of the company's resources, delaying GTA 6's development. Rockstar shifted from developing multiple games simultaneously to focusing most of its workforce on one major game. Rockstar's workforce nearly doubled, growing from 2441 employees in 2018 to 4711 in 2026, spread across 12 offices. Rockstar's three heads of development has three heads of development. The game's basic story uh was established by 2019. Wow, they locked the story seven years ago. That's crazy. Uh, I mean, they probably iterated a bunch, but uh, pretty pretty cool how much they worked on this. Uh, the developers experienced a difficult early development phase described as a dark period when the game's overall vision remained unclear. By 2022, though, enough of the game system had come together for developers to begin seeing the complete vision. Uh, GTA 6 features Rockstar's most realistic and detailed open world yet. Building heavily on systems introduced in Red Dead Redemption 2. They invested heavily in making NPCs feel believable rather than simply populating the world with generic characters. The developers struggled to balance realism and
entertainment, debating how interactive everyday activity should be, such as purchasing drinks or preparing food. Jason and Lucia can spend time together throughout the open world rather than interacting only during scripted missions. Um, very fun. There's a whole bunch more. Wow, there are so many takeaways. This synth potato thread is really, really long. Um, anyway, I'm excited to play when it comes out. Uh, also, Xbox introduced a new controller, the Xbox Nano controller for $49.99. The controller works on Xbox consoles, Windows PCs, mobile devices, and TVs.
This looks like it's for casuals.
It is for casuals, and I'm a casual. I'm potentially the most casual player, and even I look at this and I think that's not—I don't know if that's for me.
Okay. Well, uh, I'm sure people will hack this to work with everything and probably run everything as well. Uh, I saw some people vibe coding different controllers. Uh, there's a Star Wars pod racing game and someone had really sweet controls that mimicked the actual movie pretty effectively. Uh, whatever you're vibe coding, do it with Codex. Codex is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from start to finish. Um, a Brooklyn store employee prevented Kelly Clarkson from buying an animatronic bird, and the post hit the timeline like a thermonuclear explosion. Did you follow this? You said you were getting a lot of fake news. We got a truth nuke coming in. Uh-oh. I have no idea what happened here other than what you've already told me.
It's pretty aggressive. That's still not fast enough. Still not my tempo.
Um, so Pablo Torre actually went and did a deep dive on this. Um, I don't know where we should start, but uh, it's a pretty wild story. So, um, Kelly Clarkson started with a post on October 10th that kind of put this on the timeline. So, she said, 'Just drove all the way to Brooklyn to check out this store I thought looked really rad and had a few things in mind to buy and literally was looked at as if I couldn't afford it and was told he could find something comparable for me.' Wow, dude, you're an idiot and just lost a huge sale. But y'all should go check out Art of Play in Brooklyn. And she name-drops them. Uh, if you enjoy being treated like Julia Roberts' character in Pretty Woman, for sure. Check it out. Thumbs down.
And El Enano from Palantir says, 'Kelly, you would never be treated this way in the Palantir pop-up shop in Seoul, South Korea.' That's very funny. Uh, and so Art of Play fired back. They said, 'Yesterday, Kelly Clarkson visited us in Brooklyn and inquired about buying Molly, a one-of-a-kind singing and dancing bird automaton who plays an important role in the magic shows we host here. Molly is permanently attached to the wall and isn't for sale. However, the negative experience Kelly described on Twitter would resonate with anyone who has felt judged in a shop. At Art of Play, whether someone comes in to make a purchase or simply look around for a while, they are equally welcome. We greet everyone who walks in the door with the invitation to pick things up and play. And they do. Many stay for hours enjoying our puzzles, games, and toys.'
'Imagine our surprise when our small local business was suddenly attacked by 8 million people who have never visited our store.' Yeah, they're getting review bombed and a lot of negative messages. Uh, it's been a surreal experience to be the focus of such widespread outrage after just one mention by a celebrity. Thanks to all our friends for their support and welcome to all the curious folks who have discovered us amidst the drama. We're going to keep our heads down and hopefully we can clear things up with Kelly someday. As a talented popular singer once said, 'What doesn't kill you makes you stronger.' Uh, clever response. Um, hot take. I think if you go in a store, everything should be for sale. I think you should be able to buy the point-of-sale system. If I want that Square reader, you got to sell it to me.
Now, it might cost me a pretty penny because what happens if I buy your Toast device? You're going to be out of business for that day. It might take you a couple days. That's lost revenue. That's lost profit. I want you to build a discounted cash flow analysis. Think about all the different inputs. It's not just that you're going to be offline not taking any revenue in, not earning that margin over the days while you're waiting for your next Toast reader to come in the mail. You also might suffer brand damage. You might be closed on a day that you're not, and your vast customers might be upset. All of that is quantifiable. Put it in the spreadsheet, discount it with a cost of capital, and get me a number. I want to be able to buy it. If I want to buy the chairs, the countertops, the ceiling tiles, I should be able to buy anything when I go in a store, whether or not it's something that people normally buy. Let me tell you a story.
More simple solution from Alexander in the X chat: Just don't go to Brooklyn.
That works, too. Let me tell you a story. I had a buddy from the old country. He was from Eastern Europe, Middle Eastern area. And he said, 'Oh man, clubs are different.'
Very general area, opposite side of the world.
Okay. Uh, and he said, 'Oh man, like clubs where I come from are very different. You can do anything in the clubs.' And I'm like, 'Okay, what?' And he's like, 'Uh, like bottle service.' Yeah. Yeah. They'll bring out bottle service with the sparklers. And he's like, 'But they go further. There's one club that will allow you to burn the club down.' And I was like, 'Oh, what does that mean? Like you can just go crazy and have the bottles spraying everywhere?' He's like, 'No, you can literally burn the club down.' They have figured out how much it costs to rebuild the club from the ground up. So, if you have the money at the end of the night, they will evacuate the building and you can start a fire that burns the club to the ground, and it's going to cost you a ton of money because the club's going to be out of business for six months while they rebuild. But they have thought of that and they have priced it, and it's an option.
And this is the way business should be done.
Let me tell you about Cisco critical infrastructure for the AI era. Unlock seamless real-time experiences and new value with Cisco. Uh, Pablo Torre has gotten to the bottom of the Kelly Clarkson bird story. He got the camera footage, the security camera footage, uh, for the bird encounter. Um, it's a pretty busy...
Large journalistic moment.
It's a pretty busy story at the moment. Uh, it's actually sort of hard to tell. I didn't come away being like, this is really bad on one side or another. I don't know if I just didn't watch the video closely enough. Uh, do you have a take on this or are you okay?
Yeah, I don't understand why this is a story at all.
Well, it's a story fundamentally about humanoid robotics and robotics because she's buying a bird automaton. This is AI demand. This is demand for artificial intelligence. Uh, I insist that animatronics should be included in the artificial intelligence boom. You go to Walt Disney World and you see It's a Small World. You're looking at AI.
You're welcome. You're welcome.
Agreed.
Yeah. No. Uh, I think people just like it because she's such a big celebrity and she's, you know, sort of having this, you know, minor conflict with this local store and they're going back and forth and, you know, trading shots across the internet. Um, I thought the bird was $5,000. Now it's allegedly $15,000.
But it's a pretty cool bird. Have you actually seen the video?
No, no, I haven't. I still am not.
It has a bunch of wires. It has a bunch of wires and it actually dances around. It looks incredibly accurate and it sings. It's fun. And you crank it. It's the original IoT. It's the solution. This is for your bird song. You're not going to get a little speaker that plays a cute little noise. You need an animatronic bird. She said she literally just put Apple. She was trying to go analog.
You think she was trying to build an analog cuckoo clock?
Maybe. It's basically that. Yeah, it's basically that. But I guess you have to crank it so it doesn't wind up. But anyway, have you gotten any cold emails lately?
Powerful. I've been getting a lot of cold emails. AI cold emails. Ryan Hoover describes one that he received.
'Hi Ryan, I saw your podcast interview from 2016. You talked about your morning routine at Phil's Coffee and investments in Deel, Mindbloom, and Passport. Well, we're building Instinct for cats.'
No, I've actually been getting emails that are formatted like this. The format is basically like, um, show the recipient that you've done your research on them, and then it just states a bunch of random facts, like clearly pulling from LinkedIn and, you know, media and all these things, and then just serves up something completely, effectively completely unrelated. But it's like, okay,
Should we become physical mail guys? Just get PO boxes and just give people that if they ask.
And then just send me a letter.
Yeah. Send a calendar invite to my physical address.
No, just write me a letter and I'll see if the wax stamp is legit. If it's not, I'm not really opening it. I want it to be embossed with your seal. And then I will open it at a time that's convenient for me, perhaps on a Sunday evening with a cup of hot cocoa by the fire, by the hearth. Um, this is the way to communicate in the future. You can't be getting cold email slop. That's going to make me churn from email. I'm just going to turn off email if this is what's happening. So back to letters. Back to letters. Anyway, we have...
It's time to bring in our first guest from Fragment of the show, co-founder. Welcome to the show.
What's up, dude? It's only been a few years. It's great to see your face.
You too. Looking good, Jordi.
Looking good. So, you two know each other, but I don't know if the audience does. So, why don't you kick it off with an introduction?
Yes, you, the guest. Tell the audience.
Honestly, Jordi and I go back. Jordi ran a company called Party Round back in the day, and I had a company called Cove. Cove was kind of like an automated fund admin for private investments, and we took on the task of administrating Party Round's deals.
Cool. Um, along the way, we actually—so Party Round was one of them, but we administrated like a bunch of real estate deals and private equity deals, and doing that with two people was a pain, a super big pain, and that is the catalyst for building Fragment.
All right. So, catch us up to speed. You go from Cove, it evolves into Fragment. You raise, if I remember correctly, a seed round from Stripe. Was this in 2022 or maybe 2021?
We raised a pre-seed from Box Group and seed from Stripe. Yep.
There you go. Uh, and then yeah, catch us up to speed on the last couple years.
We built a ledger API, which is basically a system of record for fintech companies. Um, and fintech companies built all of the products that run those companies on this system of record. So companies like Ramp and Bill.com run on that infrastructure. And over the course of the last six months or so, we saw that those folks were really pushing the system with different types of transactions and these agentic transactions. So they were using agents to actually run a lot of the back-office work for these fintech companies. Um, and so we started following that track very closely and have built now a financial system that's purpose-built for agents and just announced a funding round with FirstMark.
John, why don't you hit the gong as hard as you possibly can? And I have some follow-up questions.
Bang. Whoa. Kind of shook the room. Um, all right. So I would love if you could get more specific around how this actually works today and how you think it'll work in the future because we've been getting agentic payments pitches for a while now and none of them have been that compelling, at least to me. What I'm not hearing you say is like, we're going to replace Stripe because Stripe couldn't possibly be good at moving money. It's more like a different layer of the stack. Is that...
I mean, all the sustaining innovation pitches that I've heard have been like 100% I'm on board. Like Stripe saying like, yeah, agents are going to be moving money over Stripe rails. I'm like, I'm in. Uh, Plaid. I've used Plaid in ChatGPT to authenticate a bunch of bank accounts. It's great.
Or even with personal agents, the most compelling pitch on how they're going to make money, at least in the short term, is like, yeah, interchange fees.
But you're talking about working with these enterprise companies that are using agents to basically run processes on the back end and then update a ledger, trigger payments, things like that.
Yeah. So, we want to automate commerce, and we're going to do that by outsourcing the work of finance to agents. And agents can't really do that work by operating all of these human-operated financial systems. Why? Well, to automate commerce, you kind of need to know what commerce is. Commerce is a set of promises. It's like these instructions for who owes what to whom, when, and money is the system that settles them.
And so where do these instructions exist? Well, in B2B, they're like contract terms. They're buried in PDFs and docs and whatnot. And what do those terms include? Well, they're like invoicing terms and SLAs and payment terms and refunding and return rules and billing and accounting rules. And in traditional commerce, those instructions for settling them are distributed across all these different systems. And that makes it really hard if you're an agent to go across all these systems and settle. Each system sort of has a portion of the story and each system plays its own part, and humans sort of carry the context across them. And it's that human bit where the humans are part of that story that, once transactions exponentiate, creates economic strain as that creates a problem.
Is that true? I'm so confused about like agents can't go across different systems because it feels like the narrative over the last couple months has been like the agents are in too many systems. Like it's like the opposite. It's like they're reading PDFs they shouldn't read and they're in the system that they weren't even supposed to be in. It feels like agents are really good at reading rules and then interacting with different systems, like writing API code on the fly using MCP, using computer use. I understand that there's a lot of problems with that, but it feels like it's firmly in the path. But I still think there's a lot of value here. But I'm wondering, how does the company interface with the model capabilities getting better?
So the model capabilities are going to get better at intelligence and reasoning. The model capabilities are less likely to get better at the deterministic stuff that are the rules of money invariance and the instructions that exist in these contracts.
Uh, so let's just take an example. If you're an agent and you are trying to disperse a claim, for example, an insurance claim. Well, one system is going to have the balance for the claim. Another system will have what's already been paid. Another system will have what you've accounted for. All these rules exist in different systems.
And in order for the agent to know what to disperse or what to account for, it doesn't have all the context. It doesn't have a clean view of the instructions across all these different systems.
So you're basically telling an agent to go into each of these systems and operate the flow that the application prescribes.
What we want to do is let the agent go nuts. Let them actually be intelligent. We're going to constrain them from doing anything stupid, but we want them to be intelligent so that they can refund what they need to. When you're solving a problem, you need to refund what you need. You want to account for the way the deal is supposed to be accounted for. You want to pay maybe a little bit now and a little later on. Uh, you might want to use credits. There's all these different ways that you're going to actually solve the problem.
Very cool. And to put it more simply, like there's a lot of stuff with money that you want to be deterministic. Is that another way to think about it? And like, you don't want the model reasoning through—you want it to be reasoning through like maybe certain parts of the process, but not—and probably not every time. Like you don't necessarily want, every time you get a transaction on your e-commerce site, you don't want like, you know, GPT-5 Pro to figure out if it's the right amount of money. That's like, just use a calculator, right?
Well, you want the agent to take the rules out of all these contracts. The rules in these contracts are what programs the money.
So you take the rules from all these contracts, you put it next to the balances that those rules need to update, and now you have programmable money, and the agent will execute those rules and update those balances accordingly.
That's the system we're building.
Yeah. You know, that's very cool. Awesome. Well, thank you. Uh, you hiring anybody?
Oh yeah. Got a bunch of new—got a bunch of money.
Where are you guys building the team these days?
Uh, we're in New York. Uh, we are hiring like crazy—go-to-market folks, engineers.
Yeah, New York is crushing it. It's been awesome to watch.
Well, thank you so much for coming on. Great to get the update, dude. Have a great rest of the progress and we'll talk to you soon. Goodbye.
Let me tell you about Railway. Railway is the all-in-one intelligent cloud provider. Use your favorite agent to deploy web apps, servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security. Our next guest joined us here in person in studio. When you spend as much money as Jordi does, they send down the chief growth officer to check in in person. Is that what's going on?
I brought you guys some personal gifts too.
There we go. There we go. Nice hat. This is nice material. Uh, but yes, introduce yourself and explain.
Good to meet you guys. I'm pulling up my app right now.
I already looked you up before coming in here. Don't worry.
Yeah. Yeah. Yeah. I've never met anyone that can pull up—yeah.
I imagine there's a whole slide on him in the board meeting.
It's like, let's project out Jordi. What does that do for—
I also thought of the whole conversation where everyone thinks they're the top spender at Air One and no one's ever even remotely close to being the top spender at Air One.
I'm just saying I've never gone app for app with anyone.
That's hilarious. Um, but yeah, uh, introduce yourself, talk about the day-to-day, talk about the challenges and—
Chief growth officer of Air One. Uh, if you don't know, if you're not from LA, you might not know what it is. Some people probably do. We're a chain of grocery stores at its core. Uh, we've got 14 stores across the Los Angeles market today. Yeah, we are premium in everything we do. Um, we're top of the market in terms of the brand, the food, the store buildouts, the retail experience, and we just try to push the bounds in everything retail and food and beverage. I've been there eight years. Uh, it's been a ride. I worked in the back of a grocery store when I started.
I went from the Beverly Hills private equity world to going in the back of the dairy cooler at the Grove to my office.
And we've grown up downtown.
Did you like get in a bunch—how did that series of events happen? You were just going in for lunch every day, seeing the guys?
No, the truth of it is I was in the private world for a long time and wanted to transition and learn how to run a business and wanted to be a GM one day, and I met everyone. So—
You wanted like true operations.
Yeah. I met people I knew in LA and I got very lucky to meet our owner and CEO Tony, who was looking to bring someone on to help him grow.
And we're still a family-owned business, but we were a much more mom-and-pop business back then. We only had four stores, no corporate offices, and we've just grown since then.
Yeah. Yeah. What is the overarching thesis on 14 stores in one region? I guess the 15th store opened in Thousand Oaks.
That might have been 14. Palisades closed. It's reopening. So—
So anyway, uh, all the stores right in one locality. What's the benefit? What's the thesis around expansion?
We run out of a commissary model. That's the reason. So we have a commissary kitchen in downtown LA.
We call it Air One Disneyland. It supports all of our stores. So any normal cafe without the support of a central kitchen—that allows us to do sort of this hub-and-spoke model and grow, and it lets us do what we do.
So you got to be really, really big until you can do the second hub, because you can't just jump one store—because there's a world where it's like, oh yeah, there's one in San Francisco, one in Manhattan, but that wouldn't work.
Doesn't work. It works for grocery stores. It doesn't work for food.
And the prepared food is what makes everyone—everyone. At least we think.
Yeah. No, 100%. We think about growth in terms of everywhere we can drive from our commissary kitchen. So further south's in play, the Bay Area is in play, but as soon as everyone talks about Air One New York City, which would be a smashing hit, we know that you got to have the supply chain to support it.
Got it. Okay. Uh, what is the model for platforming or accelerating new and upstart brands? Like there was a while ago, where I believe maybe a decade ago or two decades ago before the Amazon acquisition, Whole Foods had like regional buying. So like if you could get in one Whole Foods, you could use that as a toe-hold as a CPG company. And I'm interested in like what role do you see Air One playing in being a curator, a tastemaker, an important pillar in the growth story of modern CPG companies.
Yeah, I mean it's been organic, but we are the top of funnel for every CPG brand—or we try to be, right? Whole Foods was it at some point. Um, I have a background in CPG before this and every brand wants to be in Air One.
We like to remind people you can't make a business on 15 stores.
Yeah. You have to grow from there.
But you can get the volume, the velocities that you can take in Air One and prove that to other retailers, other investors, etc.
And it's happened organically. We just have a cache of bringing in the best and the newest and knock on wood, everyone wants to be in Air One without us having to go out and forge all those brands today.
Yep. Uh, and it seems to work. What's the—
Yeah. And the other thing that's notable is like I know, and I'm sure there's multiple, but I know of one SKU at Air One that's the number one SKU at Air One and the number one SKU in its category on Amazon as well.
So like, uh, I think Salt and Stone.
Okay. The other company. Yeah. Um, just got bought.
Oh, interesting. Yeah. Uh, what is the life cycle for a brand from first meeting to actually being on the shelf? Like how quick is that? Is that years of building a relationship?
So we try to operate very differently from the traditional grocery store and that allows us to be fast. So Whole Foods, you know, Sprouts, six-month category reviews. They cut in new products. We're reviewing products every Thursday in the office and we're reviewing categories on the go.
And we can self-distribute and bring them into our distribution center. We can go through distributors we already have.
And it allows a brand to get on shelf really quickly.
Yeah. And how quickly do you know if something's going to work?
And it's hard. I mean, getting into Air One is not the hard part. Selling at Air One is the hard part. You guys have been there. Look at the beverage wall.
Yeah. There's a ton of stuff.
No. Every time somebody pitches me a beverage brand, I say like go to Air One and be honest with yourself when you are on this wall. And Air One is I think a place where people are probably more inclined than ever to try something new because of that curation element and because people are novelty seeking when they're in an Air One, right? They might go in and get their favorites, but they also want to try. I'm going to get five things I've never had before. But be honest with yourself. Are you actually going to win on that wall? Because it's like the most competitive market probably.
I take that beyond beverage. I mean, I'll take my Air One hat off. If someone wants to start a CPG brand, I say don't do it. Like it's incredibly competitive. It's really hard. I see it from the inside angle.
No, it's really hard. Um, what have you learned about retention curves in Air One? Like we see with software, you know, you get somebody in, they might churn for a little bit, but then they become a weekly active user, then a daily active user, and this curve kind of smiles. What does success look like for a launch? Is it like really high conversion as soon as they're in and then some reasonable churn? Or how do you even think about it from a brand perspective? Like you're putting a new brand on the shelf. You know it's been a couple weeks, you're moving quickly, but then you need over three months or six months to see good churn data. But what is the shape of that churn data? What other metrics are you looking at?
Yeah. The reality is the brands control the brand's performance at Air One. We can't—you're on the shelf and it is what it is. And brands will invest or not invest. They might be local, they might not be. Um, retention groups we think about from the member perspective. Um, there is—everyone's a fascinating business for a lot of reasons. There is everything the customer sees and there's everything the customer doesn't see. And where me and my team focus are all the things the customer doesn't see.
And talk about retention like membership drives Air One.
Yeah. Um, sales from members are well over half of our business.
And that drives our entire business. We might try to be Costco one day where we're not 100%, but we're close to 100% member sales. Um, the evolution of a customer at Air One is they will come with a friend. Part of that it's like if you live near an Air One and you're going even a couple times a month, it's hard to justify not getting a membership because it's actually a really good deal. But it starts way before that. You will have never heard of it and someone will say let's go get breakfast at a grocery store and you'll say why are we doing that? And you'll come get a breakfast burrito and it tastes good and you might come back and get a smoothie and it tastes good and you might come back the next time by yourself and get a couple things and on your third or fourth or fifth visit you've bought the membership. Once you're a member, unless you leave LA, you are not leaving the membership program because like you said, you come once every week or two and it pays itself off.
So, that's our evolution and we just launched the tiers program. You got it on your app where we're just getting people further and further into the cycle to keep them as long as we can.
What's the thesis on celebrity collabs? Very unique, very interesting. Are you ramping that up? How do they work?
Yeah. So they—I would say the thesis is it's top of funnel. They don't make or break the business from like a dollar perspective at all, but you get a lot of eyeballs and you can leverage audiences that we may not have already.
Yeah, it feels like the Hailey Bieber smoothie was like globally relevant. It was like global news or at least national news.
I mean that SKU in particular was a broke anomaly. Like they'll do HBS case studies on that individual item. You could run businesses off of that item alone.
Um, but we run them every month. Um, they're successful. They usually last 30 days. We leverage another audience. Then we've kind of built a system and a process we can just keep kind of going with them.
Yeah. Yeah. How do you think about balancing the in-store experience for people that live in the area and are like DAUs or weekly active users versus the only—the most frustrating times I've had in store are like a summer...
Think it's a tourist attraction. Yeah. Yeah. Yeah. Beverly Hills is crazy. Venice can get crazy. And it ends up, you know, I might rage quit, you know, I might just walk out. Um, and I feel like that's the champagne problem, right? Like there's people traveling from around the world that are like—
Yeah. Yeah. Yeah. Local, but also like I'm in LA, I got to go, this is like part of my stop, right?
Yeah. Uh, champagne problems for sure.
Uh, cannibalization is good for our stores. Like I will not go to Beverly Hills on the weekend and I won't go to Venice on the weekend and I work there. It's a terrible customer experience from my personal perspective. And so our stores have theoretical limits of capacity and a good customer experience we believe. And so we have lately infilled—the West Hollywood store opened. It pulled away from Beverly Hills.
Um, believe it or not, Calabasas was our best store. We opened Thousand Oaks to pull away from there a little bit, and it helps the overall experience to offset that because you know whether you're a member or you're not or you're local or you're not, if you go into Beverly Hills and it's—
And it's just another spoke.
And it helps fill out that capacity.
Yeah. Uh, how have you guys thought about technology and like the consumer app experience over the years? Uh, I felt like it actually took me a while to even use the app just because like my association with a grocery store making an app—this is so bad. Right. It's like sorry, I'm not going to download the Vans app. I'm just never going to do it. Right. So I eventually downloaded it and you guys ship a lot of updates. Uh, it feels like a startup is shipping it in an interesting way. In a good way. Yeah. Yeah. Yeah. In the sense that like some stuff will break but it'll get fixed quickly. Um, and it's constantly improving and things like that.
I appreciate that. We—I mean it feels like a fraud coming on a tech show working at a grocery store but it's all built in-house. So we operate a team of 10 folks and every piece of software you see we built ourselves from the ground up.
We didn't have it before. We had a third-party app and if you had it at the time you'd probably agree.
Dude, the app when I moved to LA—
