"In this episode of The Newcomer Podcast, Eric Newcomer and Madeline Renbarger unpack how tech elites are reacting to the early days of the Trump presidency. They discuss Sam Altman and Masayoshi Son’s new venture to build AI data centers dubbed “Project Stargate” and make the case for business leaders to abide by important ethical norms. They also break down fresh performance data from UTIMCO, calling out Thrive Capital’s standout returns and examining the broader struggles for many funds amid the post-2021 downturn. They close by discussing Brookfield’s billion-dollar acquisition of Divvy Homes—once valued at over $2 billion—and unpack the implications for proptech employees left empty-handed."

In this jam-packed episode, Eric and Madeline break down Biden’s surprise crackdown on the “Tech Industrial Complex,” explore Trump’s tight ties with Silicon Valley oligarchs, and unpack the behind-the-scenes drama of a Canadian startup that ousted its visionary founder. They also spotlight a mega funding deal in AI-powered coding tools, rounding out a sweeping look at how politics, big tech, and startup intrigue collide in today’s tech landscape.

We’re in the home stretch. Silicon Valley’s political nightmare could hopefully soon be over. In the latest episode of the Newcomer podcast, we dig into all of the tech industry’s burning political takes.

There was Josh Wolfe’s endorsement waffling. Jeff Bezos’ editorial intervention. And the general sense that everyone is losing their minds leading up to what should be Trump’s last run at the presidency.

Later in the episode, we break down General Catalyst’s massive fundraise haul and its transition into a “company.” We also discuss Stripe’s billion-dollar acquisition of Bridge.

Episode produced by Christopher Gates

Timestamps: 

00:00 — Intro

04:13 — The VC political divide

09:27 — The Washington Post’s editorial debacle

12:25 — General Catalyst raises $8B

15:38 — Stripe acquires Bridge

Note for our listeners: We’ll be back with a couple episodes of the Cerebral Valley Podcast starting next week, so stay tuned.

As much as insiders might bristle over their portrayals, television and movies shape how the world sees Silicon Valley.

Aaron Sorkin’s The Social Network defined how people thought about Mark Zuckerberg. Movies like The Wolf of Wall Street and The Big Short sold arcane financial stories to the masses.

So Tom Dotan, Katie Benner, and I were interested to see how New York Times reporter Mike Isaac’s propulsive book about Uber from 2019 — Super Pumped — would be translated to our television screens.

Since we can’t watch the show yet (the first episode airs Feb. 27), we spoke to Isaac — who has played an integral role in making sure that the show’s writers know the true story behind what went down in the Uber saga. We’ll soon see how closely they hewed to reality.

But ears will be burning. Despite only running seven episodes, the show features a long list of tech characters. They might not be famous outside of Silicon Valley but they are the stuff of legend to Silicon Valley obsessives. That includes people like David Drummond, Larry Page, Arianna Huffington, Emil Michael, Rachel Whetstone, and Jill Hazelbaker. That’s not to mention the headline conflict between Travis Kalanick and Bill Gurley.

Isaac gave us a spoiler-free behind the scenes look at the making of the show. We talked about Hollywood’s obsession with tech. Isaac gave us a preview of the questions he’s asking going into his in-the-works book on Facebook — which is already slated to become the sequel to the Uber series. And we concluded our conversation with a brief discussion of Isaac and his colleagues’ latest reporting on Spotify, which revealed that Spotify had committed to paying Joe Rogan a stunning $200 million-plus.

Our regular special guest, Katie Benner, recently sunk her teeth into the intersection of an old passion and a new one: technology industry ignominy and, her current beat at the New York Times, the U.S. Justice Department. Benner talks me through the arrest of Ilya Lichtenstein and Heather Morgan. The duo were accused by the Justice Department of laundering money from the 2016 Bitfinex robbery.

The arrest shows the federal government’s increasing sophistication when it comes to crypto currencies. But there are plenty of open questions about whether Lichtenstein and Morgan had the knowhow to pull off this historic heist. Morgan was a Forbes contributor who once wrote a column about protecting businesses from cybercriminals. She raps under the moniker Razzlekahn.

Benner and I also talk about the apparent Chinese hack of the Wall Street Journal, Katie Notopoulos reporting on the identities of the creators of Bored Ape Yacht Club, and the latest technology meme — Wordcels and shape rotators.

Last March, Alex Heath interviewed Mark Zuckerberg about Facebook’s virtual reality ambitions. Then in October, Heath broke the news for The Verge that Facebook planned to change its name and interviewed Zuckerberg again. This month, he wrote that both Facebook and Snapchat’s visions are colliding. They’re both hoping to look a lot like another app: TikTok.

With newly rebranded Meta’s stock plummeting and Snap’s shares spiking, we thought it would be a good time to have Heath come on Dead Cat and explain what exactly is going on.

Heath is a close watcher of social media companies — a reporter who takes these companies’ visionary pronouncements seriously. He’s far more bullish about the prospect of virtual reality and augmented reality revolutionizing our digital worlds than we have been.

Tom Dotan and I talked with Heath about Apple’s crackdown on advertising tracking and why that’s hurting Meta more than Snap. We talked about Snap CEO Evan Spiegel’s ambitions for his company, which is suddenly looking relevant again. We chuckled about Heath’s recent interview with Matrix stars Keanu Reeves and Carrie-Anne Moss where Reeves made fun of NFTs. And we concluded our conversation with a frank discussion about how reporters should think about interviewing someone like Zuckerberg.

You can listen here on Apple and Spotify.

Neil Young and Joni Mitchell are pulling their music from Spotify over the company’s more than $100 million exclusive deal with popular podcaster Joe Rogan. The UFC commentator likes to host vaccine skeptics and has voiced his own apprehensions about the necessity of the vaccine for young people.

Meanwhile, Substack — the home to this newsletter — apparently generates more than $2.5 million a year from anti-vax newsletters. The company recently published a blog post titled, “Society has a trust problem. More censorship will only make it worse.” It reads:

We will continue to take a strong stance in defense of free speech because we believe the alternatives are so much worse. We believe that when you use censorship to silence certain voices or push them to another place, you don’t make the misinformation problem disappear but you do make the mistrust problem worse.

Tom Dotan, Katie Benner, and I discuss the two latest controversies in Covid content moderation. We also talk about the market downturn and the broader risks for the economy. I argue that I’m more worried about the effects of Tesla’s stock falling than a crypto winter.

Download the episode.

Wall Street Journal reporter Kirsten Grind helped expose Activision Blizzard’s troubled corporate culture in a bombshell article in November, co-written with her colleagues Ben Fritz and Sarah Needleman. The article revealed that Activision CEO Bobby Kotick knew about the company’s sexual misconduct problems, including an alleged rape, and, in some cases, did not report the incidents to Activision’s board of directors.

Then in January Microsoft moved to pay $75 billion in cash to buy the video games company — a 45% premium over Activision depressed share price.

The acquisition could help Activision respond to a slew of investigations and legal challenges over its corporate culture. The deal gives Kotick a graceful exit from the gaming giant that he helped build.

Tom Dotan, Katie Benner, and I talked to Grind about her investigation into Activision for this week’s Dead Cat podcast. Then we weigh the merits of Microsoft’s bid. Spoiler: We think it’s a steal for Microsoft.

Give it a listen.

Ophelia Brown’s Blossom Capital announced Tuesday that it has raised $432 million for its third venture fund. (I told paying subscribers back in April 2021 to watch out for Blossom’s next fund.)

The European Series A firm is taking a big leap from its $85 million first fund in 2019 and its $185 million second fund in 2020.

Tom Dotan and I talk with Brown about her crypto investing — including Blossom’s recent investment in juggernaut MoonPay, which raised a $555 million Series A at $3.4 billion.

Brown tells us that she’s buying NFTs with her venture capital fund. She appears to have purchased CryptoPunk #985 on Christmas Eve for about $400,000 (98 ETH). Now, with the falling price of Ethereum, it’s worth a little over $300,000, according to Etherscan.

MoonPay isn’t the only Series A in name only that Blossom has participated in. The firm invested in Checkout.com’s $230 million Series A round that valued the company at about $2 billion. Thankfully for Blossom’s limited partners, Checkout.com just raised at a $40 billion valuation.

We also talk about Brown’s early investment, with Jan Hammer, in Robinhood back when she worked at Index.

And Brown tells us why she doesn’t like her friends to know her current whereabouts.

Phil Libin is as deeply rooted in the Silicon Valley ethos as you can find. He immigrated to the United States as a child from the Soviet Union and went on to found the once trendy tech word-processing software company Evernote. He took a detour as a venture capitalist at General Catalyst. Now he’s a founder again. He’s the CEO of Mmhmm, a video conferencing company that’s backed by Sequoia Capital, and runs a product studio called All Turtles.

Even though he has virtual reality headsets spilling out of his closet at his new home in Bentonville, Arkansas, he thinks the metaverse is “obvious b******t.”

“It is a gloss that uncreative people and companies put over — fundamentally a lack of good ideas,” he says. “There’s a part of me that hates it and a part of me that fears it. But since I think it’s so spectacularly stupid, there’s actually not that much to fear.”

Tom Dotan, Katie Benner, and I discuss the metaverse and reminisce about the days when people used to throw eggs at tech buses. Libin explains why he was quick to tell his employees that they would never be coming back to the office and tells us how he got it wrong at Evernote by trying to build his life around work.

Deepa Seetharaman is a longtime friend, Wall Street Journal tech reporter, and — most importantly — a committed Dead Cat podcast listener. Her ears have been burning as we’ve talked about her and her colleagues reporting with former Facebook Chief Security Officer Alex Stamos and as we’ve dissected her reporting on Instagram’s influence on teenage girls in our episode “The Facebook Philes.” And given the fact that we named this podcast after Mark Zuckerberg’s strange text messages with board member Marc Andreessen, we thought it was about time we brought on someone who actually regularly writes about Facebook to talk about the state of the company as it is under siege from whistleblower Frances Haugen and the media.

Katie Benner, Tom Dotan, and I talk to Seetharaman about the Journal’s Facebook Files series, Mark Zuckerberg’s ever increasing control over the company he co-founded, and what Seetharaman knows about Zuckerberg’s relationship these days with Sheryl Sandberg and Peter Thiel.

Katie Benner, Tom Dotan, and Eric Newcomer look back on 2021 in Techmeme headlines for our final episode of Dead Cat for the year.

We discuss some of the biggest stories of the year:

* In January, Microsoft said Russian hackers accessed some of its source code and the U.S. government pinned the SolarWinds hack on Russians.

* In February, Elon Musk drove Clubhouse listeners (and journalists blocked by Marc Andreessen) to YouTube as they tried to listen to the live interview on the platform. It would represent a peak moment of cultural relevance for Clubhouse.

* In March, Stripe’s valuation climbed to $95 billion. (And we talked about Stripe’s critics on Y Combinator-owned Hacker News and the coverage of Stripe’s hiring practices in Protocol.)

* In May, Antonio García Martínez declared that Apple had fired him over the culture war backlash to his book Chaos Monkeys.

* In June, the New York Times wrote about tough working conditions at Amazon. Later this year, a tornado would rip through an Amazon facility, killing six and raising further questions about how Amazon protects its workers.

* Also in June, Andreessen Horowitz launched its much-discussed Future — a publication that hasn’t yet taken Silicon Valley by storm but has put every venture firm on notice that they need to think about getting in the content business.

* We talked about Robinhood’s IPO in July and the rise of meme stocks.

* And we discussed how big tech executives don’t seem to want to worry about the present. Jeff Bezos stepped down as Amazon CEO in July as he spends more time on Blue Origin; Facebook CEO Mark Zuckerberg rebranded his company to Meta in October; and Jack Dorsey left behind moderation challenges at Twitter in late November and then renamed his financial services company Square to Block, hoping to emphasize the company’s crypto ambitions.

Finally, Tom, Katie, and Eric offer some predictions for what 2022 holds, though no one seems quite sure after this strange year.

Techmeme!

My favorite tech headline aggregator, tweet tracker, and conversation setter — Techmeme — has been generously featuring me on their home page as part of a round-up of interesting tech newsletters. So I wanted to return the favor.

I check Techmeme literally every couple of hours and rely on it to do my job. And in a genuine coincidence, Techmeme served as an easy-to-navigate archive for this week’s podcast.

It’s a free news aggregator for tech industry folks that’s updated constantly to show the most important tech stories of the moment and the commentary surrounding those stories. They also publish a daily newsletter with stories from the past day, which is useful if you forget to visit the site.

Hosts Tom Dotan and Eric Newcomer speak with longtime Hollywood reporter Richard Rushfield, who launched his newsletter The Ankler in 2017. Rushfield told readers he would be “giving Hollywood the business,” describing his unsparing newsletter as “the newsletter Hollywood loves to hate and hates to love.”

Now, Rushfield has broader ambitions. A splashy New York Times piece announced that he’d teamed up with Janice Min, the media executive responsible for reinventing both The Hollywood Reporter and Us Weekly. Substack is helping to fund their growth as The Ankler joins Y Combinator.

Almost immediately drama ensued. Variety, the Hollywood trade publication and Ankler rival, ran a headline on Dec. 16: Janice Min Loses First Hire at Ankler Newsletter to Rolling Stone (EXCLUSIVE).

It just so happened that Jay Penske, who was desperately trying to keep star reporter Tatiana Siegel in his media ecosystem, is the owner of Variety, Rolling Stone and Siegel’s employer The Hollywood Reporter. Meanwhile, Min insisted on Twitter that Siegel intended to join The Ankler.

The blowup only seemed to firm up The Ankler’s insurgent posture and the threat it posed to Penske’s Hollywood media empire. We spoke to Rushfield about the contentious launch. We also talked about some of the biggest stories in Hollywood right now, including Netflix employees protesting Dave Chappelle and the backlash to the Golden Globes.

Newcomer turns four this week. On the podcast, Madeline talked with me about how it all began.

When I made the decision to start Newcomer, the venture capital industry was in the beginnings of a record-breaking bull run. A lot has changed since then, for both venture and the media industry, but I’m excited about our growth at Newcomer and wanted to share a bit more about what’s next.

Description

Eric and Madeline discuss Newcomer’s revenue milestones, the growth of Newcomer over the past four years, and what’s next for the publication. They also focus on the downturn in the venture industry and how this will affect first-time fund managers.

Produced by Christopher Gates

Chapters

00:00 — Introduction

02:08 — Newcomer’s 4 Year Anniversary

08:22 — Building out a media company in 2024 and what’s next

15:46 — The venture downturn vs. new emerging funds

22:02 — X-energy's $500 million raise

22:42 — $100 million for Path Robotics

New York Times reporter Erin Griffith returns to the show to catch us up on what’s been going on with the Elizabeth Holmes trial. To the surprise of many, Holmes took the stand to defend herself. Griffith updates us on her lunch, the politics of queuing outside of the courthouse, and Holmes’ legal strategy.

At the 33:40 mark Katie Benner joins hosts Tom Dotan and Eric Newcomer. We talk about Andreessen Horowitz crypto partner Chris Dixon’s anti-media tweets and Bloomberg Businessweek’s story on Marc Andreessen and Ben Horowitz purportedly slowly stepping back from their eponymous firm. We touch on leadership drama at Instacart and talk about fancy restaurants, including the viral review of Bros., Lecce.

Tom Dotan grills me on my trip to Miami during Art Basel. We talk about 500 Global in the shadow of 2017 exposé Dave McClure. We cover a potpourri of topics. I play my best Steven Pinker while Tom harkens back to his days as a digital media reporter. We talk about Max Read’s piece “Is web3 b******t?” and discuss the BuzzFeed public listing. (Ben Smith can finally sell his shares!) There’s even a brief discussion of the latest episode of Succession **spoilers** toward the end of the episode.

We talked to former Facebook Chief Security Officer Alex Stamos about what the media got right and wrong about its coverage of Facebook’s influence on the 2016 election. Stamos — who played a key role in bringing information to Robert Mueller about Russian election interference — is someone who is willing to criticize his former employer without letting the media off the hook.

Stamos argues that Facebook inadequately addressed misinformation posted onto Facebook’s platform and downplayed its discovery of Russian election interference on its platform. BUT, Stamos argues that the media played a far larger role in helping Russian election interference by gleefully publishing stolen Democratic National Committee emails.

We decided to check in with Stamos as the credibility of the Steele dossier has continued to unravel.

We talk about the media’s failure to soul search over its own role in the hacked election. We also discuss the Facebook Files and Stamos’ objections to some of the latest reporting on Facebook.

Background reading:

Opinion: Indictment of Steele dossier source is more bad news for multiple media outlets

How Did So Much of the Media Get the Steele Dossier So Wrong?

Collusion? Who needs it when Facebook was allowing Russians to help Trump?

A quick announcement:

I’m integrating the Dead Cat podcast a little more closely with this newsletter. We’ve brought on an audio editor with Substack’s support to professionalize the podcast. Now, you’ll be able to get Dead Cat right in your email. (But you can still listen to the latest episodes on Apple and Spotify.) If you don’t want to receive Dead Cat podcast episodes, you can go to Newcomer.co/account and deselect “Dead Cat.”

I hope you’ll listen along.

What’s the pitch?

It’s a show that gets behind the tech industry headlines. It’s hosted by me and Insider reporter Tom Dotan.

Our good friend Katie Benner, a reporter at the New York Times, is a regular special guest. So far guests have included Rippling CEO Parker Conrad, Doordash VP and Obama administration alum Liz Jarvis-Shean, and Dispo CEO Daniel Liss.

The podcast is meant to be a fun way to listen in on what reporters really think about the big tech stories of the day. Tom, Katie, and I have had a gossipy Signal thread for years. Dead Cat is that thread in podcast form.

What’s with the name?

Listen, Newcomer wasn’t the most creative name and I needed to make up lost ground. I also wanted a cute cat avatar.

But we do have a rationalization for the name “Dead Cat.”

Here’s the story:

Thanks to a shareholder lawsuit several years ago, the public got a peek inside Marc Andreessen and Mark Zuckerberg’s text messages. Andreessen was coaching Zuckerberg on how to convince the Facebook board to support Zuckerberg’s efforts to solidify his control over Facebook even if he sold shares.

Andreessen texted Zuckerberg: “The cat’s in the bag and the bag’s in the river.”

Zuckerberg didn’t seem to understand the language of spy craft.

Zuckerberg replied: “Does that mean the cat’s dead?”

Thus, the name for our podcast was born. To over intellectualize it, to me, it’s a statement about how the tech industry is already ascendant. The deed is done. The cat’s dead. We’re stuck with a culturally dominant Silicon Valley — the good and the bad. Now we’re just left making sense of it.

What’s on the docket this week?

Tom, Katie, and I talk about employee union organizing at tech companies and beyond. Tom argues that tech unions haven’t caught on like you might have expected from the cheerleading media coverage. We reflect on our conversation last week with Dispo CEO Daniel Liss and talk about reporter skepticism around cryptocurrencies. Finally, we touch on The Verge’s decision to resist background sourcing from corporate public relations.

We break the seal on crypto in this podcast in a long chat with Dispo CEO Daniel Liss about how the technology could transform social media products. He attended the big NFT conference in New York this past week and explained why the optimism in tech has been directed here. The conversation goes into what the crowd was like at the conference, how the consumer companies could embrace crypto as an alternative business model to advertising and whether it makes sense for services to jump aboard the trend even when its users don't care much about it yet.

Yes, we talk about Facebook's metaverse announcement. And yes, Eric takes the techno-optimist point of view while Katie and Tom are completely befuddled why anyone would want to spend their time there. But also, we discuss whether the announcement actually buried all the Facebook paper scandals, why Frances Haugen's turn to release her documents to multiple outlets was a jolting move for any reporter, and how whistleblowers are now just another version of influencer culture.

We dive into the wacky, wild and wildly inconsistent world of Peter Thiel with Bloomberg Businessweek editor Max Chafkin. He recently published a book, "The Contrarian: Peter Thiel and Silicon Valley's Pursuit of Power" that goes through Thiel's origins in the industry, how he influenced other founders and how his right wing political project is shaping up. Max also makes the case for why Thiel is one of the most influential characters in the formation of the current culture in tech. And Eric, Tom and Max mull over why Thiel's worldview is at odds with itself and whether maybe that's the point.

Max's book: https://www.penguinrandomhouse.com/books/609711/the-contrarian-by-max-chafkin/

We're joined by New York Times tech reporter Erin Griffith. She's been on the scene in San Jose covering the fraud trial against Elizabeth Holmes—tech's trial of the century, or at least the decade, or maybe of a generation. We talk about the surprisingly plodding pace of such a high profile trial, what kind of a case the prosecution appears to be building and what will be the broader reckoning for the tech industry. If there will be one at all.

We discuss Coinbase CEO Brian Armstrong's tweets about how the tech press' harsh coverage of CEOs is driving away talent and whether the increasingly critical stories about tech companies is the natural maturity of the industry. We also dive into last year's controversies when national politics spilled into company Slack rooms and whether banning it actually helped improve morale (as Armstrong also claimed). Finally, as top Facebook officials make the media rounds after the whistleblower's testimony in Congress, we disagree on whether getting an interview with a high ranking exec is all that valuable to a beat reporter.

Katie and Tom interview New York Times media columnist Ben Smith about his piece on the deception at Ozy. This was recorded a few hours before the digital media company announced it was shutting down, following his reporting. We discuss Ozy's appeal to investors, the courting of billionaires, the nature of the fraud, and what to make of the entire cohort of digital media companies the sprang up at the same time.

Ben's initial column on Ozy

https://www.nytimes.com/2021/09/26/business/media/ozy-media-goldman-sachs.html

Description

In this episode, Eric Newcomer is joined by guest host Jon McNeill, a seasoned executive with experience at Lyft and Tesla who is now leading DVx Ventures. They discuss the bear case for OpenAI. The OpenAI discussion then leads into a closer look at the contrast between founder and manager modes before concluding with a discussion on Tesla’s advancements, or lack thereof, in self-driving technology. 

Produced by Christopher Gates

Chapters: 

00:00 — Introduction

03:27 — Bear case for OpenAI

13:07 — Founder mode management

17:20 — Tesla promises, but SpaceX delivers

With Eric on vacation, Katie and Tom take on hosting duties without adult supervision. We go over the rise of tech employees griping to reporters about company inner workings (aka "leaking") and what it says about the state of employee happiness in the industry. Also why CEOs won't be able to control it unless they address what's ailing company morale. Then we touch on the pervasiveness of gig workers around the world and what happens with a significant portion of the world's workers relies on that model. Also, the mortifying text messages between Elizabeth Holmes and Sunny Balwani. 

Stories we discuss in this episode:

Elizabeth Holme's Texts:

https://www.thedailybeast.com/theranos-elizabeth-holmes-called-business-partner-boyfriend-her-tiger-in-lovey-texts-as-company-tanked

Tim Cook's Memo:

https://www.theverge.com/2021/9/22/22687747/tim-cook-employee-leak-memos-do-not-belong-at-apple

Global Gig Workers

https://restofworld.org/2021/gig-workers-around-the-world-are-finally-organizing/

Eric, Katie and Tom talk about why the Wall Street Journal's epic series about Facebook's internal failings is so powerful. And why Facebook continues to be aggressively covered by the media in a way it didn't use to be—well into the Biden presidency. That turns into a discussion about whether comparing the company to big tobacco makes sense. We also briefly debate if Peter Thiel is as powerful as the media makes him out to be. This will not be the last time we discuss Thiel on the podcast.

In a hosts-only episode, Katie, Eric, and Tom talk about whether the media has overplayed the Theranos story and argue about whether the public is still interested or what lessons can be learned from the verdict. That turns into a debate about other media-driven tech spectacles, like Facebook's camera glasses, and why reporters gladly play up the hype about hardware. 

Liz has handled communications with the media from the crucibles of both the tech and political worlds. We talked about her time with Tesla just as Elon Musk was finding his voice and going through and around the press. She reflected on her time with the Obama presidential campaigns, feeding opposition research to media about Sarah Palin and Mitt Romney. And we debated whether the media has become too critical of tech, particularly from the vantage point of her current role as the VP of comms and policy at DoorDash.

CEO and founder of security startup Vanta, Christina Cacioppo, joins to talk about how she was able to raise a huge Series A ($50m at $500m valuation). We also talk about her jump from being a VC to a founder, why Zoom-based fundraising is here to stay and whether female founders get a fair shake from the tech press.

Our show begins with our first ever guest, Rippling CEO Parker Conrad. He talks about why the tech press spends too much time listening to VCs who don't have nearly as much power as reporters think. He also looks back at the way he was infamously pushed out of his previous company, Zenefits, and the role A16Z played in that saga.

Our thanks to @yungchomsky for our theme music.

Description: 

In this episode of the Newcomer Podcast, Eric Newcomer and Madeline Renbarger discuss two major funding rounds, the ongoing downturn in VC funding, and the growing imbalance between public relations professionals and reporters. Eric and Madeline highlight Poolside’s $500M round and Impulse Space’s $150M raise, while pointing out that even the AI mega rounds cant hide the downturn in VC funding.

Produced by Christopher Gates

Audio Chapters: 

00:00:18 — Poolside’s $500M round 

00:02:24 — Impulse Space’s $150M raise

00:05:17 — Downturn in VC

00:11:03 — The imbalance between PR and journalism

In this episode of the Newcomer Podcast, hosts Eric Newcomer and Madeline Renbarger delve into the world of venture capital deals, starting with Ujet’s $76M Series D for its AI-powered call center software. Next up is the drama surrounding PearAI, whose growth-hacker tweet set the tech world buzzing. From there, they navigate through OpenAI’s own “Game of Thrones,” exploring internal power plays and high-stakes exits, before turning to California’s latest AI regulatory battles. To wrap things up, they call for some balance in Silicon Valley’s escalating discourse around drugs and psychedelics.

Chapters:

00:22 Ujet

01:40 PearAI

05:49 Open AI

11:45 AI Regulation

16:34 Drugs + SV

Episode 1: AI + Robots, YC Preview, and Why the Cool Kids Keep Picking on Tech

In this week’s episode of the Newcomer Podcast, hosts Eric Newcomer and Madeline Renbarger discuss three top venture capital deals, including World Labs and delivery startup Flink. They also wade into Y Combinator’s upcoming Demo Day, highlighting trends in defense tech and the implications of AI’s power consumption.

The conversation touches on Runway’s licensing deal with Lionsgate and concludes with an examination of John Mulaney’s performance at Dreamforce.

Chapters

* 00:00 World Labs: A New Era in AI Robotics

* 05:10 The Rise and Fall of Delivery Startups

* 09:19 Y Combinator’s Demo Day

* 11:46 Defense Tech

* 20:09 Powering AI: The Nuclear Debate

* 24:24 Runway’s Licensing Deal

* 28:02 John Mulaney’s Roast

Today we’re highlighting two fireside chats from the Newcomer Banking Summit on March 14.

First up is Mercury CEO Immad Akhund. He talked about how the Silicon Valley Bank crisis sent customers rushing to his digital banking service.

He pitched a world where software — not human bankers — solve most of customers’ problems. Akhund told me, “My experience with relationship banking was I need to send a wire and I literally cannot figure out to do it, please help me. Which to me never felt like a relationship, it felt very transactional and painful — and with Mercury you don’t have to do that.”

Mercury is limited by the fact that it is not a bank — it’s a software company on top of banking partners — at a time when regulators are looking closely at how banks work with fintech partners.

We concluded our summit with Jackie Reses — who was a top executive at Square before leaving to buy a bank. Reses is the CEO of Lead Bank, a regional Kansas City bank that still serves local customers but has built an onramp for financial technology companies to connect with the banking system.

“The thing I saw at Square — which I consider to be a very strong, innovative fintech — is that owning a bank and operating a bank is a 10X delta in understanding compliance to working in a tech company,” Reses said. At Square, Reses said, she learned to “appreciate the complexity of what it takes to do this, so that we could learn how to serve our clients better and help them scale — but make sure we never put ourselves in the position to risk the relationship that we have operating with our regulators.”

You can give the episodes a listen or watch them on YouTube.

Also: The Future of Banking with Rho, Jiko, and Ripple

In case you missed it, we’ve posted another panel with three fintech/banking leaders.

Rho CEO Everett Cook, Jiko CEO Stephane Lintner, and Ripple President Monica Long are all trying to solve shortcomings in the legacy banking system, with different approaches. Check it out to see their takes on the major problems with banking today.

We’ve got two great sessions from the Newcomer Banking Summit for you:

* First up, WestCap Group founder Laurence Tosi and Lux Capital co-founder Peter Hébert. They give an unvarnished account of the collapse of Silicon Valley Bank with the benefit of hindsight. “It was like the banking equivalent of the U.S. withdrawal from Afghanistan,” Hébert said. “It was absolute sheer terror.”

* We follow that up with Silicon Valley Bank President Marc Cadieux, who talks about where SVB is today and fields questions about all the new competition his reconstituted bank, now owned by First Citizens, is facing.

I thought Tosi and Hébert’s talk was the spiciest of the day. And Cadieux was the man of the hour. I wanted to know where his head was at one year after the crisis.

You can give the episodes a listen or watch them on YouTube.

Breaking the Bank: BCV’s Matt Harris

If you missed it, yesterday I published a talk from Bain Capital Ventures’ Matt Harris.

In the headline, I made a mortifying error and used the acronym of another VC firm. Harris is Bain Capital Ventures’ fintech guru; he gave a great presentation and I had nightmares last night about my mixup. Apologies!

Here’s that talk:

Today, we have a double episode for you — two conversations from the Cerebral Valley AI Summit.

Reid Hoffman was fresh off a meeting with President Joe Biden when Hoffman and I sat down on stage at the Cerebral Valley AI Summit Nov. 15. On stage, he told us that working to get Biden elected next year is one of his top priorities.

Then, I sat down with the ever-feisty Vinod Khosla. The investor called for a TikTok ban and more welcoming immigration policies while warning against open-source artificial intelligence projects.

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Talk with Oracle about accelerating your GPU workloads.

Hoffman Plans to Go Big for Biden

Hoffman, fresh off a meeting with President Biden, kicked off the afternoon with a strong endorsement of the President’s record. Hoffman praised Biden for his recent executive order on artificial intelligence.

Reid called himself “a 95%-98% supporter” of the executive order, endorsing provisions on reporting and monitoring, “red team” testing, and voluntary commitments by companies that might eventually be enforced via the Defense Production Act. But he pushed back on the idea that the FTC should be monitoring the AI industry for anti-competitive conduct.

“Startups are not being impeded right now,” he asserted, despite the apparent dominance of OpenAI and the mega-cap tech companies. Reid sits on the board of Microsoft, and offered that he was in fact “first money in” on OpenAI, through his personal foundation, but he’s not concerned about, er, his own companies having too much power. “I don’t think it constrains competition on any level.”

Hoffman is always happy to engage on policy, and I asked him what he thought about Marc Andreessen’s recent “techno-optimist” manifesto, which denigrates the very idea of government oversight. Reid said he was a techno-optimist too, and half-joked that Andreessen “quoted kind of liberally from things I’ve written and said” without any attribution. But Hoffman said that he’s not on board with Andreessen’s approach. “It’s kind of dumb to think that when you have major technologies there can’t be negative side effects,” he said, noting that all his AI projects have safety teams. “Tech can be amazing. Let’s be intentional about building.”

Khosla Wins Cheers from the Cerebral Valley Audience

Venture capitalist Vinod Khosla confirmed that his firm, boosted by an early stake in OpenAI, was about to close on $3 billion in commitments for a new fund. Valuations are high, he said, “but just because valuations are high doesn’t mean it isn’t a good time to invest.”

He’s not buying existential risk, calling it “nonsensical” talk from academics who had nothing better to do. But he’s long on China risk, saying the U.S. is in a “techno-economic war” with China and needs to fight hard. “I would ban TikTok in a nano-second,” he said, unlike his predecessor on stage, Hoffman, who Khosla said he very much admired. Khosla is firmly against open-source AI models as well due to the China risk.

Bio-risk and cyber risk are real concerns too, he noted.

But if China or rogue viruses don’t kill us, Khosla thinks the near-future is very bright: “I do think in 10 years we’ll have free doctors, free tutors, free lawyers” all powered by AI. 

Khosla also gave a grudging endorsement of the Biden Executive Order, saying it was “okay.” 

But like most Silicon Valley moguls, he has no time for antitrust issues. “We have to get people like Khan out of there,” he said, referring to the chair of the FTC (though misstating her name), calling her “crazy, left-wing.”   

Khosla said he’s long believed that AI would force us to “redefine what it is to me human.”

Meantime he himself plans another 25 years of VC investing, and if all goes well, maybe more. 

Give it a listen

We were delighted to kick off the 2nd Cerebral Valley AI Summit with Ali Ghodsi, CEO of Databricks, and Naveen Rao, co-founder of MosaicML.

Their encounter at our debut event in March led to Ghodsi buying Rao’s company, which had little revenue, for $1.3 billion. At our event on Nov. 15, the two discussed how the deal came together quickly after meeting at the conference dinner.

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NVIDIA DGX Cloud on OCI is an AI training-as-a-service platform for customers to train complex AI models like generative AI applications. Included with DGX Cloud, NVIDIA AI Enterprise brings the software layer of the NVIDIA AI platform to OCI.

Talk with Oracle about accelerating your GPU workloads.

Ghodsi recounted how he started spending some time with Rao and thought, “these guys are pretty good,” and then by chance noticed an employee he respected poking around with MosaicML and offering a strong endorsement. Soon Ghodsi was on the phone with the head of his deals team, who told him “if you want to buy these guys you have to do it this weekend.” Rao said by that point “you kind of know he’s going to pop the question,” and once they worked out the money, the deal was done.

The two executives certainly seemed to be in harmony as they touted the potential benefits from their combination, which in simple terms will bring MosaicML’s expertise in building specialized generative AI models to Databricks’ corporate data platform products, essentially super-charging Databricks for the generative AI era.

They were eager to defend the idea of open-source foundation models that are specific to certain tasks, rejecting the notion that general-purpose models like ChatGPT-4 will eventually swallow everything. (This conversation took place before OpenAI was thrown into chaos by its board of directors.)

Ghodsi said calls to limit open-source models on the grounds that they’ll be too easily exploited by bad actors a “horrible, horrendous” idea that would “put a stop to all innovation.” 

“It’s essential that we have an open-source ecosystem,” he said, noting that even now it’s unclear how a lot of AI models work, and open-source research will be critical to answering those questions.

Rao added that many of the people making predictions about how AI would develop are “full of s**t.” On the safety question, he noted that cost alone would stand in the way of any existential risks for a long time, and in the meantime the focus should be on real threats like disinformation and robot safety.

Give it a listen

Waymo’s milestone — surpassing Lyft’s ride numbers in San Francisco — takes center stage in our first podcast of the new year.

Still, it’s not obvious that this translates into guaranteed scale across the country. We consider the operational headaches that come with scaling driverless fleets. One way forward for Waymo could be further collaborations with legacy rideshare giants like Uber.

We also break down Whatnot’s latest round of funding and debate whether a potential TikTok ban could give the live shopping startup a competitive advantage.

Give it a listen.

Chapters:

00:00 Introduction

01:35 Waymo's Progress and Challenges

10:21 Whatnot's big fundraise

Episode produced by Christopher Gates

If you could amass any five artificial intelligence startup bets right now, which companies would you pick?

My Cerebral Valley co-hosts and I took a stab at answering that question with an artificial intelligence startup draft.

Our startup draft starts at 27:35 after a discussion of some of the biggest themes going into this week’s Cerebral Valley AI Summit.

The draft gave us a chance to dissect some of the most promising startups in artificial intelligence right now.

The goal was to amass five companies with the biggest valuation five years from now. We restricted ourselves to AI startups that had raised more than $100 million.

I encourage you to make your own prediction in the comments.

Give it a listen

For this week’s episode, I spoke with Chris Miller, the author of Chip War, about the rise of Nvidia.

While OpenAI gets the lion’s share of the public adulation for the sudden excitement about generative intelligence, Nvidia’s H100 chips are powering much of the generative AI frenzy. Nvidia’s stock has climbed over 200% over the past 12 months. And the company has become a key investor in generative AI startups.

Miller (who comes on the show around the 41-minute mark) talks through Nvidia’s history and the geopolitical war raging over the production of chips.

In the first part of the episode, Cerebral Valley AI Summit co-hosts Max Child, James Wilsterman, and I discuss how big technology companies are working to fend off this new generation of AI startups.

Give it a listen

I’m back from my honeymoon in Japan. Thanks for sticking with the newsletter as I celebrated my wedding this year. Expect more of my newsletter writing soon.

If you have tips or story ideas for me, you can always reach out at eric@newcomer.co.

I hope you’ve been enjoying the Cerebral Valley podcast series while I’ve been gone. If you missed the first three episodes, you can check them out in the links below:

* The Cerebral Valley Podcast: Artificial Intelligence Becomes Reality

* AI Kills Us All (with Daniel H. Wilson)

* Someday That NPC Could Be More Alive Than You Are (w/ Amy Wu & Keith Kawahata)

On this week’s episode of our Cerebral Valley podcast, co-hosts Max Child, James Wilsterman, and I talk about how artificial intelligence is actually affecting our lives today.

Then at the 34:40 mark, I talk with DoNotPay CEO Joshua Browder. His company is helping consumers cancel their gym memberships, dispute charges, and otherwise stand up to big corporations.

Browder got some heat for planning to have an artificial intelligence-powered lawyer argue in court. Ultimately, he reversed course under pressure from the legal world.

Browder envisions a world where AI is fighting other AIs. Companies use artificial intelligence to power their chatbots and to handle customer support. Consumers need to be armed with similarly powerful AI-powered tools to resist those companies.

Give it a listen

Video games often represent the frontier of any new technology. Many of the most popular applications in the initial iPhone app store were games. Today’s virtual reality devices are dominated by video games.

Artificial intelligence seems poised to upend the video game business and entertainment more broadly.

On the third episode of our six-part Cerebral Valley podcast series, Max Child, James Wilsterman, and I game out how artificial intelligence could reshape the media we consume.

It helps that Max and James are the co-founders of Volley, which builds AI-enabled games. They develop many of the most popular voice games on the Amazon Alexa and smart TV platforms like Roku.

Max and James have been deep in the trenches of conversational-style gaming and have spent a lot of time thinking about how humans interact with ever smarter computers.

In the second half of the episode, I talk with Menlo Ventures partner Amy Wu, who focuses on gaming and consumer investments, and Keith Kawahata, a former executive at Wargaming, AppLovin, and Kabam, who now has a stealth artificial intelligence gaming startup.

Wu helps to articulate a three-part thesis on how artificial intelligence might change the gaming business. (1) artificial intelligence will help with the creation of the game art and graphics, (2) AI can create more sophisticated non-player characters, and (3) AI can help write the code of the game itself.

One of the things that I was struck by from the conversation is that games may have a big leg up in implementing artificial intelligence over movies — because people interact so much more with a gaming, giving it tons of data to react to. While TikToks can learn what small populations of people like and what an individual likes over a long time, a game could learn a lot about a user in a single play session.

Of course, there are real hurdles left standing. Most notably, text-to-image generation so far is mostly two-dimensional. Despite everything that’s happened, image generation models aren’t just whipping out 3-D levels that are ready to play.

And it could be a while until non-player characters are as smart as humans. But imagine playing a game of Grand Theft Auto or Red Dead Redemption and the characters roaming around the game are self-aware agents with their own thoughts and drives.

Give it a listen

P.S. I’m on my honeymoon right now in Japan. I was working frantically to record these episodes before I left. My chief of staff Riley Konsella is sending the episodes out for me while I’m gone. If you need anything while I’m away, you should email Riley.

Thanks in advance for being understanding that this newsletter is slowing down for my honeymoon. I’m going to dedicate myself to relaxing over the next two weeks so that I come back hungrier than ever.

What’s so crazy about this moment in artificial intelligence is that many of the most credible voices in AI think there’s a real chance that this all turns out really, really badly.

Anthropic CEO Dario Amodei recently pegged his “chance that something goes really quite catastrophically wrong on the scale of human civilization” between 10% and 25%.

That’s comforting.

Applications to attend the Cerebral Valley AI Summit close TODAY October 17.

Apply right now to be considered for an invitation!

On the series’ first episode we reflect on how generative artificial intelligence and large language models took Silicon Valley by storm.

So in our second episode of the six-part Cerebral Valley podcast, Max Child, James Wilsterman, and I played out the doomsday scenarios. We talked a lot about science fiction and how writers have imagined artificial intelligence turning dystopian.

In the second half of the episode, I talked with science fiction author Daniel H. Wilson. He wrote the books How to Survive a Robot Uprising, Where’s My Jetpack?, and How to Build a Robot Army. Wilson has also consulted with the military to help them game out how dystopian technologies might unfold.

Of course, even in the Anthropic CEO’s estimation, the most likely scenario is probably a more boring one: artificial intelligence doesn’t try to secretly destroy us as we sleep in our beds.

But the fact that there’s a chance is certainly worth considering.

I open our conversation with the parable “The unfinished fable of the sparrows” from Nick Bostrom’s Superintelligence.

It was the nest-building season, but after days of long hard work, the sparrows sat in the evening glow, relaxing and chirping away.

“We are all so small and weak. Imagine how easy life would be if we had an owl who could help us build our nests!”

“Yes!” said another. “And we could use it to look after our elderly and our young.”

“It could give us advice and keep an eye out for the neighborhood cat,” added a third.

Then Pastus, the elder-bird, spoke: “Let us send out scouts in all directions and try to find an abandoned owlet somewhere, or maybe an egg. A crow chick might also do, or a baby weasel. This could be the best thing that ever happened to us, at least since the opening of the Pavilion of Unlimited Grain in yonder backyard.”

The flock was exhilarated, and sparrows everywhere started chirping at the top of their lungs.

Only Scronkfinkle, a one-eyed sparrow with a fretful temperament, was unconvinced of the wisdom of the endeavor. Quoth he: “This will surely be our undoing. Should we not give some thought to the art of owl-domestication and owl-taming first, before we bring such a creature into our midst?”

Replied Pastus: “Taming an owl sounds like an exceedingly difficult thing to do. It will be difficult enough to find an owl egg. So let us start there. After we have succeeded in raising an owl, then we can think about taking on this other challenge.”

“There is a flaw in that plan!” squeaked Scronkfinkle; but his protests were in vain as the flock had already lifted off to start implementing the directives set out by Pastus.

Just two or three sparrows remained behind. Together they began to try to work out how owls might be tamed or domesticated. They soon realized that Pastus had been right: this was an exceedingly difficult challenge, especially in the absence of an actual owl to practice on. Nevertheless they pressed on as best they could, constantly fearing that the flock might return with an owl egg before a solution to the control problem had been found.

Give it a listen.

P.S. I’m on my honeymoon right now in Japan. I was working frantically to record these episodes before I left. My chief of staff Riley Konsella is sending the episodes out for me while I’m gone. If you need anything while I’m away, you should email Riley.

Thanks in advance for being understanding that this newsletter is slowing down for my honeymoon. I’m going to dedicate myself to relaxing over the next two weeks so that I come back hungrier than ever.

In the past 12 months, it has felt like “AI” transformed from a pair of letters that companies affixed to their latest product announcements to get some extra marketing luster to the shorthand for a genuine technology revolution.

ChatGPT, Dall-E, Midjourney, and more showed the world what artificial intelligence is now capable of doing.

Then, the funding started pouring in for every startup that had anything to do with those two letters. Every venture firm needed to bet on their own foundational model and every startup needed to get its hands on Nvidia’s H100s to train their own foundation models.

Ahead of the 2nd Cerebral Valley AI Summit on Nov. 15, I wanted to really take stock of how we got here. So I teamed up with my conference co-hosts Max Child and James Wilsterman to bring you a six-part podcast series on the rise of generative artificial intelligence.

You can apply to attend the Cerebral Valley AI Summit here. Applications close Oct. 16.

On the series’ first episode we reflect on how generative artificial intelligence and large language models took Silicon Valley by storm.

With the help of ChatGPT, we consider the top research papers that brought us here, the most important historic milestones along the journey, the key artificial intelligence products on the market today, and how artificial intelligence is already impacting our lives.

The show is fun and and lighthearted. I hope it’s a little more accessible than the usual fodder on the Newcomer podcast. For instance, on a future Cerebral Valley episode, we’re going to do a draft pick of what we think will be the most valuable AI startups. On upcoming episodes, I interview guests like Daniel H. Wilson — author of How to Survive a Robot Uprising, Where's My Jetpack? and How to Build a Robot Army — and DoNotPay CEO Joshua Browder.

If you’ve never listened to the Newcomer podcast before, this is a good time to give it a shot. Die-hard podcast listeners will remember Max and James, who are the founders of the AI voice games company Volley, from my January episode on augmented reality.

Whether you can make it to Cerebral Valley in person or not, my hope is that this series is a solid primer as to what exactly has been going on in the business of artificial intelligence. I follow this stuff super closely and until we got organized for this podcast series there was so much that I hadn’t learned.

I know most of you won’t be able to come to the conference in person, but there will be a virtual conference in this newsletter. We will publish recordings from the summit on our YouTube channel and send out some of our favorites over the podcast feed. So this is your lively refresher on all the crazy stuff that happened in Silicon Valley artificial intelligence startups this year.

Give it a listen.

Apply to attend the Cerebral Valley AI Summit here. Applications close Oct. 16.

P.S. I’m on my honeymoon right now in Japan. I was working frantically to record these episodes before I left. My chief of staff Riley Konsella is sending the episodes out for me while I’m gone. If you need anything while I’m away, you should email Riley.

Thanks in advance for being understanding that this newsletter is slowing down for my honeymoon. I’m going to dedicate myself to relaxing over the next two weeks so that I come back hungrier than ever.

I brought two top Silicon Valley entrepreneurs working on extending lifespans on the Newcomer podcast this week.

One of them is trying to help people live longer. The other, their dogs.

James Peyer, the CEO of Cambrian Bio, is acquiring majority stakes in drugs that could combat a particular illness while showing promise for broader use among healthy humans. Meanwhile, Celine Halioua, the CEO of Loyal, is developing drugs to make dogs live longer.

Fundamentally life extension, or longevity, is about finding drugs and treatments that can be given to healthy humans to help them live longer, healthier lives. Instead of just treating illnesses, entrepreneurs in the space want to find ways to stave off aging in already healthy people.

The space has long been a fascination of mine. In February 2022, I profiled Elad Gil’s investments in an array of companies looking to make healthy humans live longer, healthier lives.

The HBO show Silicon Valley helped popularize the idea that Silicon Valley elites were pumping their veins with younger people’s blood. (I’ve yet to get anyone to confess to me that they’re buying plasma.)

To the chagrin of this week’s guests, one tech mogul desperate to avoid death has received a lot of the attention recently. That’s Braintree founder Bryan Johnson.

Time magazine just profiled Johnson under the headline “The Man Who Thinks He Can Live Forever.”

Johnson, 46, is a centimillionaire tech entrepreneur who has spent most of the last three years in pursuit of a singular goal: don’t die. During that time, he’s spent more than $4 million developing a life-extension system called Blueprint, in which he outsources every decision involving his body to a team of doctors, who use data to develop a strict health regimen to reduce what Johnson calls his “biological age.” That system includes downing 111 pills every day, wearing a baseball cap that shoots red light into his scalp, collecting his own stool samples, and sleeping with a tiny jet pack attached to his penis to monitor his nighttime erections. Johnson thinks of any act that accelerates aging—like eating a cookie, or getting less than eight hours of sleep—as an “act of violence.” 

Even as Johnson is getting a lot of attention for his self-experimentation, there’s a growing view that there could be something credible behind Silicon Valley’s interest in life extension. The Economist just wrote that “slowing human ageing is now the subject of serious research.”

Many in mainstream science and medicine look at all this slightly askance. That is understandable. It is an area which attracts chancers and charlatans as well as those with more decent motives, and its history is littered with “breakthroughs” that have led more or less nowhere. America’s Food and Drug Administration does not recognise “old age” as a disease state, and thus as a suitable target for therapy. Nevertheless, evidence has been accumulating that such research might have something to offer.

Some established drugs really do seem to extend life, at least in mice. That offers both the possibility that they might do so in people and some insight into the processes involved. The ever-greater ease with which genes can be edited helps such investigations, as does access to large amounts of gene-sequence data. The ability to produce personalised stem cells, which stay forever young, has opened up new therapeutic options. And new diagnostic tools are now offering scientists means to calculate the “biological ages” of bodies and organs and compare them with actual calendar ages. In principle this allows longevity studies to achieve convincing results in less than a lifetime.

I dug in with Halioua and Peyer about where they saw the most opportunities, how their own companies were progressing, and why they thought Johnson’s publicity campaign was doing a disservice to companies working on longevity.

The duo helped break down the space, discussing which types of companies they think are innovators, which efforts are more speculative moonshots, and which ones are simply snake oil.

Give it a listen.

Chris Lehane was once the consummate Democratic spin man and campaign wonk. He introduced the world to the vast right-wing conspiracy against the Clintons.

In 2015, Lehane dove into the high-growth startup world. He joined Airbnb to run policy and communications. He taught the home sharing company how to fight nicely with cities, dishing out data and tax cooperation in exchange for favorable local regulations. Unlike Uber’s confrontational approach that had it going to war with Bill de Blasio in New York City, Airbnb tried to foster a cozy relationship with urban policymakers.Airbnb CEO Brian Chesky and President Barack Obama built a tight relationship.

A year ago, just as the crypto winter was starting, Lehane joined Katie Haun’s self-named venture fund, which had raised $1.5 billion. Haun Ventures positioned itself as a leader in regulation, policy, and communications. Haun is a former assistant U.S. attorney. Rachael Horwitz, the firm’s chief marketing officer, once ran communications for Coinbase. And Lehane brought the political experience, especially with Democrats.

But there’s only so much one firm can do to change crypto’s reputation in Washington, especially with Democrats. Sam Bankman-Fried, the former CEO of FTX, had become the crypto world’s standard bearer with Democrats, donating to their campaigns and speaking to their values. Then when Bankman-Fried’s empire unraveled and he headed to jail, many Democrats grew disillusioned with crypto.

This year, two Republican-led House committees moved forward crypto-friendly legislation that would clarify the regulation of crypto currencies and give the Commodities Futures Trading Commission more power to regulate crypto (denying the SEC some of that power). Meanwhile, the Biden appointed SEC chair Gary Gensler has sued crypto exchange Coinbase and Binance for failing to register their exchanges with the SEC.

I invited Lehane on the Newcomer podcast to take stock of crypto’s status in Washington. We talked about the bills working their way through Congress, the SEC lawsuits, and the crypto winter. Lehane and I also talked about how he believed that America needed to embrace a “common sector” that served as a hybrid between government regulation and corporate self-regulation. Think Airbnb data sharing with cities or Facebook’s oversight board. We also commiserated over co-existing with Silicon Valley Republicans in the MAGA era.

I spend most of my time here talking about how people earn their money.

Rey Flemings, the chief executive of the YC-backed startup Myria, is an expert at helping people spend it.

For several years, Flemings ran a luxury services consultancy for family offices. In other words, he threw parties in Las Vegas, introduced billionaires to celebrities, rented out private mansions, and helped people acquire things money can’t usually buy.

These days, Flemings is building a startup around the same concept. Letting rich people buy what isn’t on the market. He’s building a marketplace for off-market travel and accommodations. On top of that, he’s spinning up a social network for the ultra wealthy.

Flemings says his average member’s net worth is about $600 million.

I sat down with Flemings to talk about his startup and to understand how Silicon Valley’s most successful people are spending the fantastical sums that they’ve earned in the past few years.

He warned about the unhappiness that sudden fortune can bring, calling it “the success condition.”

We’re all humans. We’re all chasing the American Dream. We’re all chasing success. And when you achieve it, one of the first discoveries that people are shocked by is that you have to pump the brakes. Money doesn’t buy happiness. I was talking with a new client the other day and he said, “Ray, I can’t talk about this publicly, the world would play the world’s smallest violin, but the day I exited triggered the deepest and greatest period of depression in my life.”

Give it a listen.

Highlighted Excerpts

The transcript has been edited for clarity.

There is a phenomenon in Silicon Valley where someone suddenly becomes rich, especially when their entire net worth is tied up in a startup. Finally, they sell the company and now have all this money, but don't really know how to be wealthy or what to buy. What typically happens when somebody sells their company for a billion dollars and gets 300 million of it?

Rey Flemings: First of all, there’s no one-size-fits-all answer, right? We’re different. Significant, sudden, great wealth does come with a particular set of challenges. Zooming out across 15-17 years in this space and looking at all of the folks that work here, zoom all the way out. Let’s just focus on first-generation people who are operating a business and/or they’re doing something presently to amass that wealth. I’ve worked with probably 100-125 folks in that category. I hear the same things over and over, so often that we have even coined a name for it — we call it the Success Condition.

It goes something like this: We’re all humans. We’re all chasing the American Dream. We’re all chasing success. And when you achieve it, one of the first discoveries that people are shocked by is that you have to pump the brakes. Money doesn’t buy happiness. I was talking with a new client the other day and he said, “Ray, I can’t talk about this publicly, the world would play the world’s smallest violin, but the day I exited triggered the deepest and greatest period of depression in my life.”

What ends up happening is we chase the American Dream only to realize it and then we’re like “Wait, why am I not happy? What’s missing here?”

Rich people get sad, depressed and commit suicide just like anyone else. Studies show that beyond about $100,000 a year, any more money doesn’t actually contribute to human happiness. The wealthier and more successful you become, the harder it is to form close interpersonal relationships with people that aren’t in your network.

Break down what was the motivation to do Y Combinator and build more of a tech platform for Myria?

Rey: Fantastic question, Eric. I’d love to sound like I had this all planned out and was so smart with so much foresight. I knew I wanted to build a scalable business with my background. But when I started The Blue, I ran it for 5-6 years before we could start Myria. It was complicated. How do you scale services? Many say you can’t scale services. If so, what do you scale and how? How do you keep customers happy who want white glove service and personalization? How do you provide that special touch at scale? These are really hard problems to solve.

I grew that business bootstrapped to about $60 million GMV annually. If you do that, you stay busy. I didn’t know my kids, family, or myself. I was always on a plane, just work, work, work. That’s not sustainable.

At least you get to go to parties sometimes?

Rey: Yeah, almost always in that business. I just celebrated my 50th birthday. I don’t have to tell you I didn’t want to spend the rest of my life on a plane in a suit. That’s no way to live.

It turns out that when we started Myria, we asked clients what they wanted. Ninety-two percent of requests fell into just three categories.

People wanted our global travel product — not just booking a flight or kayak to Toledo. Really crazy, experiential travel beyond a private jet. When you get off the private jet, what happens? The best things in the world you can’t find on Google. If you can’t search for them, how do you know what’s on the menu? There’s a whole universe of off-market awesomeness in every category, but no one tells you about them because they aren’t online.

Travel experiences, people, and assets. When you’re running a big company, you have an amazing team. When you hit $300 million net worth, you probably move to a single family office with teams managing your wealth. But for your personal life, even with household employees, you want to relax at home. A person worth $3 billion wouldn’t run their company with one person, but their personal life becomes a multi-billion dollar enterprise with homes, kids, divorce, assets everywhere. Assistants work hard but can’t be experts in everything billionaires need help in.

We asked clients what they wanted and 92% of requests were in three categories. Also, there are about 20 markets ultra wealthy care about. If we have great coverage in those categories in those markets, we’ve covered nearly all use cases.

I’ve always wondered — if I’m at Bezos’ level of wealth, do I try to get everybody who interacts with me to sign an NDA? Especially if I’m out partying on a yacht, is everybody at that party signing something to keep things confidential?

Rey: On the Myria platform, everyone who sells to our members is automatically under binding arbitration. The wealthy are targets for frivolous litigation. We try to prevent that.

In real life, if you’re hosting a party, many will request or demand NDAs and lock up phones, like Dave Chappelle style with magnetically locked bags. I think that’s good considering phone addiction. You’ve thrown a million dollar party for people’s enjoyment but they just look at their phones. But there are gaps. I can share a horror story.

We did an expensive, innocent party at an incredible estate with famous people relaxing and having fun — nothing unprintable. But no one wanted cameras in their face while relaxing Someone who signed the NDA went to the press implying we discriminated by only having women sign NDAs, not the men. The men were dear friends of the client, so they didn't have to sign. Sometimes NDAs can backfire.

Do you require NDAs for everything?

Rey: We try to on the platform but nothing substitutes for having a good group of trustworthy people, which is harder as you become more successful. It’s become a sport to vilify the rich, making it harder to form close relationships outside your network.

Jane Poynter spent two years and 20 minutes in a biosphere back in the early 1990s. (There’s a documentary about it.)

Later, Poynter set her sights on a mission to Mars. Wired wrote in 2014, “Meet the Couple Who Could Be the First Humans to Travel to Mars.” The story was about Poynter and her husband, Taber MacCallum.

These days, the duo is working together on building a hydrogen balloon that will take tourists to space for $125,000. Poytner came on the podcast to talk about her startup, Space Perspective. We also discussed SpaceX, Elon Musk, Virgin Galactic, and the state of the adventure tourism industry in light of the deep sea deaths on a OceanGate submersible headed to the Titanic.

On the show, Poynter said that Space Perspective, which has about 130 employees, has raised almost $70 million. Prime Movers Lab and LightShed Ventures are major investors, Poynter said. She told us that she hopes to commercial operations “around the end of 2024.”

Venture capitalist, chief of staff newsletter author, and AI event host Ali Rohde joined me as a guest co-host for the episode. (She’s a friend of the show and I’m exploring different podcast episode formats. I always welcome your feedback and advice. In that spirit, I’ll mention that I’m still looking for a podcast producer.)

Think of the episode as part two in my exploration of space startups. Last week, I talked with Delian Asparouhov, the co-founder of Varda Space Industries.

This week, we interrogate space tourism. Give it a listen.

Highlighted Excerpts

The transcript has been edited for clarity.

What if anything did you take away from the OceanGate situation?

Jane: What’s fascinating is we got almost no customer questions or refund requests due to the OceanGate accident. It’s incredibly different from what we do. Also, in the 60+ years of deep ocean submersible operations there had never been a fatal accident until that incident. You have to ask why. I don’t want to focus on OceanGate specifically, but the big takeaway for us was that we embrace regulatory oversight. We want the FAA and Coast Guard to work with us since we also operate at sea. We go so far beyond any standards they would set that it’s good for us and the industry to have that accountability and transparency. That was the main takeaway: We welcome reasonable regulations and oversight.

Space tourism more akin to safaris than Virgin Galactic

Jane: It’s interesting that you talk about Blue Origin and Virgin not being competition because the experience is so differentiated from what we offer. Our experience is more akin to incredible safaris, trips to Antarctica, and other wonder travel that deeply transforms people. That’s why we priced our tickets at $125,000. It’s in line with those kinds of life-changing experiences. When Antarctica tourism opened up, there was a huge demand from people willing to pay high prices for a once-in-a-lifetime trip. We’re seeing incredible excitement and demand from customers wanting to go to space with us. We have an event coming up soon with over 100 of our explorers gathering here, and they all want to connect with each other too. We’re building a real community around spaceflight and this experience. It’s going to be such an extraordinary, bonding experience for people. I truly believe it will bring people together in a deep way.

You mentioned Blue Origin, Virgin, and SpaceX — obviously some of the first names people think of when space is mentioned like Elon Musk and Jeff Bezos. They are controversial figures, likely quite different from our target customer base. But I'm curious. What do you think about them? Are you grateful for how they've helped popularize and mainstream space travel?

Jane: Taber and I worked with Elon before he started SpaceX, so we have an interesting perspective. In the early days of SpaceX, space tourism was considered a joke and the idea that commercial companies could enable space travel or moon/Mars missions was insane. It was assumed that only governments could do that. Elon deserves a lot of credit; Gwynne Shotwell too. She's done an incredible job revolutionizing the space industry by lowering costs, improving efficiency and effectiveness, and showing us what's possible. SpaceX paved the way for the over 100 small rocket companies operating now, which never would have happened without that trailblazing. So while there are likely narrative or cultural elements we wouldn't fully align with, overall we are absolutely grateful for the pivotal role SpaceX played in advancing commercial space and making it seem achievable.

What excites you about exploring space?

Jane: When I think about space exploration, I don’t view it as leaving Earth never to return. I actually quite like this planet! To me, space exploration is more of an extension of the perspective-broadening we do now. When people look down on Planet Earth from space, it’s a mind-blowing experience. Now imagine yourself standing on the moon or Mars and seeing Earth. It’s that exponentially more impactful. It will give people a wildly different perspective on what it means for all of us to live together. We should think of ourselves as one human family living on Spaceship Earth. As we venture farther out, it will become increasingly clear that we’re holding up a mirror to humanity, seeing ourselves somewhere other than Earth for the first time. It’s a wild concept. So that’s how I view space, not as leaving the planet but expanding our perspective to appreciate that we’re all in this together.

How do you prevent accidents in the air?

Jane: A common question we get is what happens if something goes wrong with the balloon? The balloon technology is incredibly well understood with a long legacy. Hundreds have been flown in the last 20 years without a single in-flight incident. However, we obviously need backup systems. We have a series of parachutes, similar to those used on SpaceX’s Dragon capsules or other space vehicles. They are robust, proven parachutes. We have four total, with only two needed for a safe landing. The parachutes are only used in an emergency scenario because normally the ship ascends under the balloon and descends back onto the balloon, keeping the flight system consistent. This is a very safe approach, never transitioning between flight systems. We’ve focused on simplicity everywhere possible because simpler systems tend to be safer overall.

The ServiceTitan IPO has been an unexpected bright spot as 2024 comes to a close.

On this year’s final episode of the Newcomer Podcast, we discuss what other startups might follow in ServiceTitan’s footsteps next year. Eric defends the controversial ratchet provision in its last funding round. And we dig into Alphabet’s big week.

We focus on startups on this show, but this week was a good reminder that the big tech firms like Alphabet and Meta can still turn out impressive moonshot technology from their research labs.

We’re bullish on a couple emerging venture capital firms — Laude Ventures and Dimension — who just closed big new funds. The megafunds may be sucking up the majority of LP dollars, but firms with a clear thesis and a standout team of high performers can still shine in this market.

Give it a listen.

Chapters:

00:00 — Reflections ahead of the new year

05:02 — ServiceTitan’s IPO and Market Sentiment

10:00 — Alphabet’s Wins and the AI landscape

15:08 — The State of Quantum Computing

19:58 — Emerging Venture Capital Trends and Final Thoughts

Episode produced by Christopher Gates