California Forever founder Jan Sramek: 200 transactions, 700 sellers, and a plan to break ground on a new city in 2028

Welcome to the stream. " Boom. What's going on? Good to be here. Hi guys. Hi. Uh, how you doing today? I'm pretty good. How are you? We're good. Uh, could you start just by giving us the the high level pitch? Uh, introduce yourself and the company, the project. How do you refer to it? Sure. Um, Yan Shame.

I founded California Forever almost 10 years ago at this point. Uh and we are building the next great American city. Uh and so we own about a 100 square miles of land, grazing land basically just outside of San Francisco, about half an hour east of Napa, halfway between San Francisco and Sacramento.

Uh and what we doing here would have been the least controversial project in California in 1960 when we uh when we still used to build stuff. uh but somehow today it it's become controversial. Um but uh now it's really kind of going full steam in the last few months.

So now we have a couple of local cities moving to approve the new city. And then last week we introduced a proposal to build the Solano shipyard which would be the biggest ship building complex in America to help with uh the ship building crisis that the whole country is trying to solve right now.

I mean that sounds like pretty industrial. Is is that important to have like an industrial plan and really like jobs growth engine? Because when I first heard about this, I was like, "Oh, it's like halfway to Napa.

This will be just luxury mansions for people who have a place in Tahoe and also have a place in uh in San Francisco and they'll go out there on the weekends. Uh but it sounds like you're planning for something much more ambitious than just a retirement community for uh liquid uh liquid tech people. " Oh yeah, 100%.

Um, I mean, I really started the company eight years ago when it became clear that we were going to need basically what Silicon Valley used to be. I mean, you look at you look at what the value used to be all the way through the 80s. It was primarily hardware, right?

Until 1985, the biggest employer in the valley was Loheed Martin. It wasn't Microsoft. It wasn't Oracle.

Um, and so the focus from the beginning was, yeah, bunch of really high quality housing, great walkable neighborhoods, but also how do you how do you go back to what the valley used to do, which was make planes and microchips and uh, and radios all the way back at the day.

Um, and um, I mean that was 8 years ago, but I think if you look at what's happened in the country and in the world over the last eight years, that's kind of just supercharged that whole effort.

And so when we came out here um and introduced the project about a year and a half ago, we said that we would want to bring particularly advanced manufacturing and aerospace and defense to Solano County.

And um it kind of got lost in a lot of the media coverage, but that's been the that's been the focus since the beginning.

Has the controversy, which is a seemingly silly controversy especially for our audience because the idea that we should just build more housing and advanced manufacturing just seems like should be agreeable with every American.

But uh do you feel like the the controversy has actually maybe been you know beneficial at all and the ability to sort of like attract you know you know independent thinkers people that otherwise you know if it was still the 1960s and everybody was just pro building and new cities maybe it would have been harder to recruit you know just like truly exceptional talent to join the team and the sort of movement.

maybe it wouldn't have been in the 60s. Maybe it wouldn't have I think about California Forever as somebody who, you know, grew up in the Bay Area and in Sonoma County and, you know, I think about it as like very exciting, very ambitious and like, you know, something like very worthy of of a ton of investment.

But, um, but back in the 60s, it would have been, you know, okay, a lot of people maybe thought that they should create another city or something like that. Oh, 100%. Um, I mean, it's it's it's a great question.

I think you're the first person who asked it but uh we've definitely seen it uh which is similar thing that I think you've seen with early Andural and early SpaceX where if the whole world is saying hey this is a dumb idea you can't build a new defense company in 2016 and you can't build a rocket company in I don't know 2004 2005 we've definitely seen that the people who want to come and work on it are people who really believe um and it shows right it shows in the in in the quality of the talent that you can get and it it is ironic in that if you if you propose this in 1960, there were a ton of these happening all over the country.

I mean, Irvine is a great example in Southern California, right? Irvine is a city of 300,000 people. There's 250,000 jobs on Irvine. They have more jobs than they have working age residents. Uh it's one of the safest places in America, some of the best schools. Um it is different kind of a place.

It's the best-in-class suburban community if you want, but uh not what we're trying to build, but huge success.

that was started in I think 1962 and there was zero controversy about it in the beginning and same thing happened in other parts of the country but it's kind of an old idea that we used to have and then we forgot it as a country and then everyone is shocked that people can't afford to live anywhere because we stop building stuff.

What is the roadmap for actually building a new city? I mean it sounds like there's a corporation here, you've raised money, there's there's investors and at some point they might want a return on their investment. Uh like What steps do you have to what steps have you done? What steps do you still have to realize?

And then it sounds simple to just go and build a city in some ways because it's you know there are companies that their whole job is building houses or building buildings.

There are companies that need buildings to have to live in or people to live in and like all of that makes sense but then there's something that's still really hard. What is that thing? Yeah. Yeah, I mean it's it's I I describe it as I think someone coined the term complex coordination startup.

There's no breakthrough here, right? There's no we're not trying to make a rocket fly. We're not trying to cure cancer. We know all of the steps. You just have to put them together really really well and finance it correctly and execute on it.

Um and we do build new cities in America, not in California largely, but we build them in Texas and Arizona. We just don't call them new cities. We call them master plant communities. Yeah.

Now the difference is they are largely um they are largely residential and they don't have manufacturing or jobs and so on but we do build them. Um I kind of compare the company to a biotech company. Mhm. Which basically has three distinct stages. The first one is you kind of invent the drug.

The second one is you go through the clinical trials and then you get it approved and then you commercialize it. Right. You sell it. And for us the three distinct stages was um the first one was to buy the land. And so I spent seven years very quietly raising money and buying the land.

And in the end we bought about Sorry, one question. Maybe you're about to say this, but were you piecing together like tons of different properties? Like imagine there's not a 100 square miles just sitting there like, "Hey, you want to buy this for one price? " Yeah. Yeah. I wish I wish that would have been easier.

No, we uh it took seven years, 200 individual transactions, 700 individual sellers. Um and so it was probably it was probably the most successful I think uh land assembly in the history of the country. Um but yeah it took seven years to put it together. U very long process. Um and then so that's kind of phase one.

Phase two is what we going through right now which is the planning and the permitting. Yeah. Uh, and so we're doing both the actual planning of how do you how do you design an incredible new city and and how do you combine the old and the new in the best possible way to create a great quality of life.

Um, and that's going to take us about another two two and a half years and then we are hoping to break ground in 2028. Um, and from there on it's kind of the third pace in a biotech context if you want which is basically build and and sell.

Uh, and you start out slow and the first year will probably build 500 homes and then the second year you build more. Um, and eventually you're building thousands of homes every um every year. Uh, and all of the accompanying uh industrial space and retail and commercial space and so on.

And and really the vision is to build um a city that actually looks pretty old school at least in terms of on the surface. I mean a place that looks very much like some of the most beloved neighborhoods in America like at a smaller scale. Charleston, South Carolina or Savannah, Georgia.

And then as the city grows and becomes bigger, Chicago, Brooklyn, Philadelphia, Georgetown. Yeah, I'm excited to hear that because in in many ways like the the classic thing in in tech is, you know, you know, it's not like you've maybe built like 10 cities before.

And so to come in and say like, oh, we're going to reinvent the city and just completely redesign everything. And I I I've had this theory for a while that like suburbs are like nice in a lot of ways. I live in a I live in a small like gated community. There's like hundred something homes. It's like generally well-run.

I like my neighbors. I I have friends that don't live in suburbs yet and they like tell me like I just want to live somewhere that's like safe and community oriented and why doesn't this exist? Yeah. Why doesn't this exist?

And I'm like, you know, there's the we we were sort of like, you know, I feel like our, you know, as a sub 30-year-old, my generation was like just against this idea of of suburban living.

Yet, the idea to live like just outside of a major industrial area with like-minded people that has like family values and things like that is actually fantastic.

So I guess like how long like did you did you know from the beginning that the sort of like historical concept of a city was like pretty pretty good right like you're talking about like Charleston right like you can it's not like did did Charleston like have it figured out you know whenever they like created the city or did it sort of naturally evolve into that state and how did your thinking shift at all from the beginning of saying oh we need to completely reinvent this or or the right model already exists and we need to sort of emulate that in some way.

Yeah, I was pretty much in the camp of we know how to do this, we just need to do it again. Um so my take is that um there's a tremendous amount of wisdom in how we design cities and I mean we've been building cities for 10,000 years, right? It's not like iPhones.

And so to come in and be like, I'm going to design a better phone. That's pretty reasonable, right? We've been building phones for 20 years. So you can kind of say I I'll I'll do it better.

Also the technology of what you can do has changed and so it opens up new possibilities right same with a car but with a city like you can do some smart things in it but um at the end of the day it's a bunch of buildings and parks and schools and shops and and businesses and we've been doing it for 10,000 years not in this country but elsewhere um and so I think it's pretty arrogant to come in and say we're going to redo all of this and do it from scratch and I think a lot of the backlash against tech coming in and saying we going to invent and how to do cities comes from that.

People just saying what are you talking about? And uh and then particularly you have these images of steel and and and uh glass and everything is a skyscraper. It creates this very alineating human environment where people don't really like living there.

Um and so I was pretty and I also came into this after 10 years of living in the old York and the old Cambridge and London and Zurich and Manhattan and the old parts of San Francisco. And so I was pretty charmed of those places.

Um and so from the beginning that was the idea and I think in particular we are pretty excited about this intermediate people call it now gentle density or missing density where right now what we have in America is you have mostly single family subdivisions and then you have sixtory buildings where you live in a small studio or a onebedroom apartment and if you have kids and you want some space for them to run around in the garden tough luck.

Mhm. And we don't really build anything in the middle. And I kind of think that the magic happens in the middle. And that's why those neighborhoods are so charming, right?

Because you can have a rowhouse and you can have a backyard so your toddlers can run around in the backyard, but then the plot sizes are small enough that if you want to walk to a restaurant or your kids to school or to a coffee shop or you just want to go out at 6 p. m.

and walk over five blocks and see your friend and have dinner with them, you can do it. And that's the sweet spot that we are really excited about. And and so for us, most of the magic is two to five stories, row houses, small apartment buildings, what's called small parcel fabric.

So every house is a little bit different. It has that old charm that you see in the marina or in Noi Valley locally in San Francisco. And we've basically stopped building those neighborhoods. Um and um I think they are really magical and that's what we mostly going to be building.

Can you talk about the potential impact of a single new city with you know specific ideals right you talk about you know when I when I think about you have a 100 square miles you're going to have I don't know how many residents but if you have thousands of homes it's you know be tiny percentage of California's population but could theoretically you know meaningfully you know impact like a bunch of different metrics can you talk about like what you think success is obvious obviously like a new city that's thriving, has a local economy, a bunch of happy residents, families, people that you know, generations that that grow um you know old there, but what does kind of success look like across you know whatever metrics you're you're sort of thinking about?

Yeah, I mean at at a very micro scale, my personal goal, so we have uh we have a couple of young kids and another one on the way and my personal metric, so we'll we'll move in the first house in the in the in the city. Um and my wife has given me the goal of the the first one has to go to school in the new city.

Uh she she said preschool. I think that's going to be a push now, but we we'll we'll try for school. Um I think success is if kids can walk to school alone. Um that's a pretty big one. And I kind of think of kids as they basically indicate the species, right?

Like if you have a city where your kids can walk to school alone, it says a lot about the city. It says a lot about how close things are. It says a lot about safety.

It says a lot about kind of neighborhood relations and you feel enough trust in the system that they're not going to get abducted and police works and all all kinds of stuff works basically. So that's it at the very micro level.

And then at the very macro level, um I think there's a cultural moment in California where the state is kind of waking up from a few decades of not building very much and um I think when the history of the state gets written in 40 years or 50 years and they talk about this kind of turning point in cultural attitudes and and how the state kind of went back to what made it work for a century, I I would like California Forever to be a footnote in it and say, well, one of the things that happened in this moment was this project and it kind of galvanized uh and helped rethink the attitudes towards growth in in California.

Um and um it very much feels that way. It it feels like at least to me it feels like a bunch of people left during co and they went to other places and then um uh they kind of learned the shortcomings of other places. Let's just say that.

And they they they they realized that when uh uh when nature or the almighty or whatever was creating California, it kind of was creating the planet, it kind of got a uh unfair share of all of the advantages. Yeah. Can you prods? Can you you know, so growing up in the Bay Area? Yeah.

I watched as San Francisco basically got worse every single year for like as I became an adult basically. But I but and during COVID I was in Southern California and I had the same thoughts as everyone else you know sort of looking you know they said you can't go to the beach.

So I was like well if I can't you know even go to the beach why am I here and and everything's closed down. I started like everyone else looking at Zillow and things like that and other states. Decided to stay because I just spent my whole life here and I really believe in California and I want to make it better.

But can you talk about the sort of why California is so great? Because obviously like I I can imagine if this if if this model city works then you could do other states but you name the company California Forever.

So I imagine you you you would maybe even uh you know try to pursue this model in other places in California even. But um can you give like can you give the bull case for California at a sort of extremely sort of high level ignoring all the sort of you know last 20 years of politics and anti-growth and and all that.

Yeah. I mean I mean if you're trying to write history, right?

So you you write the history of the world and you write the history of America and then people cross the continent across all of these perilous deserts and most of them die and they get here and they kind of get to this place that just been blessed with geology and climate and all of the all of the stuff.

And um and then obviously the what is it the the the um the weak didn't make it and the the ill we left along the way or something.

So you you get this cer of people who come here who are just basically the the self- selected pioneers and they get to the ocean and then there's nowhere else to go and so they invent Hollywood and then they invent tech and we basically create the two industries that have defined the 20th century and then unlike with Detroit those industries happen in a complete natural paradise where you can be skiing versus on the beach in 4 hours and then the California values and the California ethos defines the 20th century.

And then we screw it up because we can't build stuff. It's ridiculous, right? Like I grew up in posts Soviet Eastern Europe with this vision of California as this place of optimism and opportunity.

And then after 28 years of my life, I get here in 2013 and people are throwing rocks at Google buses because we can't build enough housing, which we've known how to do for 10,000 years. And I'm sitting here like, what the [ __ ] is going on? And then you look at how we designed the housing system.

And if you tried to break up a society and make everyone hate each other, you would design the California housing system. You would have a fixed housing stock in one of the most desirable places to live in the world, which basically means that you make one person fight against another for housing.

And then you have the dumbest industrial policy in the history of America, which is we invent every company worth anything in the country. And then we force them to leave the state. It's insane. It is crazy. It's like we waking up from a bad dream. Yeah.

But I think what happened to your point about CO is people went to other states and then they realized all of the problems there and they came back. But they came back with a different different attitude. They came back and they said, "Hey, we've been living here, but we haven't really engaged in politics. " Mhm.

But we're going to change that now because we looked at all of the other places in the in in in America and they are pretty nice, but they're not California. And so we're going to stay, but we're not going to let these um radical ideas just destroy the state.

And I think that's what you've seen in the next couple of years. And it feels like it's just accelerating. And um we're pretty excited to kind of be part of finding the new new new middle path where you can show that you can build stuff, but you can also build it with California values, but you have to build it.

You're not that you you are not a progressive if there's no progress in your state and you're not for economic opportunity if the teachers who teach in your school have to work I have to live two hours away and commute four hours every day. You're just not and we have to reckon with that. Yeah.

Uh how how do you think about fire wildfire prevention and protection? I'm sure you guys have thought about it a lot. I I live in Malibu, John lives in Pasadena, so we both went through this.

Um, and it felt like the Palisades should have been in many ways just it should have should have been more defensible than it was. And there was a lot of reasons that that that happened.

And so I can imagine if you're building a new city from scratch in, you know, Northern California, which is fireprone and just the state has been fire has always been fireprone, right, if you look throughout history.

Um, and one thing that was interesting about the Palisades, I was talking with a a friend and he said that there was like a commonality between the homes that didn't burn down and it was like some way that the roof was attached to the siding of the house and it was just like this one design decision that is like less uh less environmentally friendly like it it doesn't you know maybe hold in um cool air as efficiently or something like I I actually don't know specifics but that was like the common ground between all the homes that didn't burn.

So when you get to design a city from scratch, like the layout and everything and then design all the homes from scratch, how do you think about that? Uh if if the ultimate goal is to prevent, you know, uh fire, you know, destruction from fires and then also make sure the cost of home insurance stays reasonable. Yeah.

So, here's a here's a here's a mind-boggling statistic. There there isn't a single new neighborhood in California, not one that ever burned down ever. No new neighborhood, sorry, in the last 20 years, no neighborhood that has been built after roughly 2000 has ever burned down.

When there was a big fire in Mission Vjo down in Southern California, when there was a big fire in Santa Rosa, the new master plant communities, the new neighborhoods have become places of refuge where the firefighters take breaks.

And that's because we've um we've tightened up the building code so much in the last 40 years that these new buildings are borderline impossible to burn down.

Um and so one of the one of the unfortunate consequences of the California building regulations is we've made it so expensive and so frustrating to build new buildings that we keep old buildings around for longer than we should and those buildings burn like nothing. But um we will do more than that.

We will have the most modern water distribution systems and backups on backups and building materials. But the reality is even if all we did, what everyone else is doing in new communities, none of them has ever burned down because they are they are so far resilient.

And the second component of it is one of the one of the reasons for why this site is by far the best place in Northern California to build is it has the lowest exposure to natural disasters of any site within 200 miles. M so the entire we own 68,000 acres at this point is over 100 square miles.

There isn't a single earthquake fault line running through the whole site. It's unheard of. Normally our engineers tell us you cannot find 3,000 acres in this studio down in LA like today. Yeah. Our we're on the 10th we're on the 10th floor. We're on the 10th floor of this building. It started shaking.

You could hear noises from Yeah. Right before we went live. It was very funny. Uh so so that's one. And then just on the other two, uh the the whole thing is um surrounded by water or grass, which means you don't have the fire risk the same way because it's the trees that normally have all of the combustible load. Yeah.

And then the whole thing is above um flat plane and sea level rise and so on. So it's a pretty cool place to build. Yeah. You're not at the wild the wilderness interface, as you say. Um I have a question about uh Ezra Klein's abundance.

uh it seems like a dramatic shift in uh potentially like the Democratic platform if he really gets it to take hold. Uh very progrowth now. He uses the analogy or the story of the California highspeed rail system is instructive for but his whole pitch is is not necessarily uh burn the government down.

We need to be ultra libertarian, let anyone build. Uh it's much more make the government great again. uh what has your read on the abundance agenda been? Uh and just kind of give me your take as much as you've dug into it.

I've been a fan I mean he's been writing about it for a couple of years and uh I've I've discussed with discussed it with Derek Thompson quite a bit and uh I'm a huge fan.

I think that the the the devil is in the details but to me whenever people on both sides of the political spectrum are kind of saying the same thing there's a deep underlying truth at work. Totally.

And there's some differences between what Mark Andre is saying with it's time to build and what Tyler Cowan is saying with kind of state capacity and and with what Ezra is saying. But they all there's an underlying truth at work that they are all kind of getting at.

And um I think the devil for um abundance is going to be in the details. Can they actually simplify the regulations enough? But I do think that California California desperately needs a big win in the built environment.

Everyone knows that we can build apps and phones and drones here, but people have given up on our ability to build something. I we posted this thread on Twitter about the Solano shipyard that we proposed last week that went pretty viral. If you look at the comments, it's fascinating.

99% of the comments that are negative are saying, "This is an amazing idea, but California will never let you build it. " that it's literally there's there's like 400 comments that are maybe 200 are negative. 195 of them are basically saying great idea, California will never let you build it.

And to your point, they quote highspeed rail. And so I think California desperately needs to show that we can build again. Um and have a have an example for the abundance movement like this is what it looks like. And I can't think of something bigger and better that could do it than California forever.

Particularly because we put it in the name. I mean, if California wants to stop being a joke to the rest of the country on our ability to build, we need something that's as big as highspeed rail to reset the conversation.

We're not going to reset the conversation by building a bunch of five-story apartment buildings in San Francisco. Nobody cares across America. We need a big um bold statement and I think this could be it.

If you had if you had the ability to step into a particular government role with essentially like complete control for a day or some hypothetical uh and your choice was uh a mayor, a mayor, a governor or the president, uh which one would you choose?

Like where where does the h what what position or what level of abstraction over our government has the highest ability to act as a lever on housing policy? America tends to focus a lot on the presidency. Uh but I've always wondered is there an executive order that can fix pol housing policy?

Is there a bill that we should be passing or is it more at the state level or even more at the local level? So so that's that's part of the challenge. And I mean called it vetocracy and I think Ezra gets into it in the book. None of them alone can do it.

I mean if you look at what we need to build um we need local permits, we need state permits and we need federal permits. Um, and you could get all the local permits you want, but unless you get the state permits, you can't build it.

And conversely, and so we've created this system where you need 25 people to say yes, and if one of them says no, you can't build. And so I think the goal for people like Ezra and the abundance movement in some sense is going to be reducing the number of people who can say no.

I mean, imagine if you're running a company and to do anything you needed 25 people to say yes. Yeah. you would never ship anything and none of them and in many cases and the CEO didn't have the power to override your head of sales or your head of product. You would never ship anything. Yeah. Yeah. Yeah, it makes sense.

Um uh one last question for me. Um you said that you're not building skyscrapers on day one, but as I think of how a city evolves as it gets bigger and more dense, I actually love skyscrapers.

And I and I and I love the idea of a city getting more and more vertical as it gets more dense, as it's more economically su uh uh successful.

Uh how do you think about setting up zoning or housing policy or even just expectations that you're moving into a quaint suburb or mixeduse environment on day one, but if this goes really well, yeah, we're putting up the 40s story or the 20 or even the 10story uh building.

Is is that just a cultural thing or are there regulations that you want to instill from day one to allow the city to scale or is it more of like a copype strategy and you think we just need 10 of the same uh communities all over the all over the state and that's how we win? Yeah, I mean it's a great question.

Um I think for a long time we'll be able to replicate it by just growing. I mean we have 100 square miles. It's that's twice the size of San Francisco, five times the size of Manhattan. It's bigger than the city of Seattle or about the size of the city of Atlanta.

And um if you look at um places like Barcelona or Paris or even Chicago, they get to really large populations um just with sixtory buildings. And there's a lot to lot to say for that. I think the other part of the question of how do you give people a voice in their neighborhood and what it looks like?

I actually like the the Texas model for this. So, we try to do this with zoning in California, but that this it's very unclear who control I mean the city council controls the zoning, but like when should it be changed?

And that kind of creates all of these fights that we've been dealing with for the last 10 years of I moved into a single family neighborhood and I don't want any four-story buildings here. Mhm.

I think the way to do it is to have a really permissive zoning code that goes all the way up to five stories from the beginning at least. And so, for example, in in in the city that we've proposed, um, every parcel can be built up to five stories from day one. Mhm.

Um, but then what you do is you allow home builders and residents to control kind of their block or their neighborhood through covenants. Mhm.

And so that's a private contract that can exist on a few blocks that says when this was built, this was meant to be a lower density neighborhood with buildings going up to three stories.

Um, but that also means that it's clear who has the power to change it, which means 50% of the people or 60% of the people living there can vote and they can lift it.

And that also means that when they do it, they might um they might kind of lose something and that maybe there's a taller building that looks into their backyard, but maybe that property became more valuable because now you can upgrade it and you can build a second another story or another two stories.

And so I think that's a really good way of dealing with it at a at a um neighborhood level that is just much more adaptable to change over time. Well, when I get there, I'm building down. I'm building four subb. I'm going to have a bat cave. I'm going down. Everyone else is going to be sitting five stories up.

I'm going to be five stories down. It's going to look like a tiny hut on the roof. How uh are you I don't know. I don't know if we have more time.

I know we're five minutes over already, but if we have time for one more question, I'm curious if how much you've studied uh HOAs and uh all the you know, my HOA like runs on paper. So, if you want to pass anything, it's like you need they'll like send you something. Everybody has to sign it.

Of course, nobody's like and then and then like apply your own postage and like get it back to them and it it's a bunch of silly rules. So, like building an HOA from the ground up that just effectively, you know, is digital first, uses the internet, like seems pretty seems pretty powerful.

But I'm curious if you've you've spent uh so many I mean it's just like a meme at this point. So many people like, you know, have a a I'd love to just hear best practices for HOA design. Like that's an interesting question. Yeah. And in the context of like an entire city. Yeah. Yeah.

What's the biggest mistake and what's important to get right? So, it's it's it's an area that we've done some work on. Not a whole lot yet. I mean, that's kind of a little bit downstream. We have a couple of years to figure it out. The question that I've been obsessed about the most is why does everyone hate their HOA?

Mhm. Just at a at a very human level, like it always seems like people hate it. I Ours is actually fine, but a lot of people hate it. I wonder whether there's something about the appointment of the HOA board that's part of the problem. I'll tell you I'll tell you my reason.

Are you the president of the I'm not the president is a in the home building business of my HOA and so if you want to get your plans approved for some reason use him it goes super fast. So it's it's basically like uh you know mafia but this is what we like. It's one handwashing the other.

No we don't one hand washes the other. We don't like that. So that's that's my personal, you know, uh, so my my take on I mean it's and it goes to to this. I I think there's all kinds of issues with direct democracy that we've tried.

Uh, but I I do wonder whether it could work pretty well with tech at an HOA level, which is a relatively low stakes like vote fraud and whatnot.

like instead of having a three person board, if everyone just had an app and then you hire basically a HOA manager to kind of execute, but you didn't get into the politics of who's on the board and which neighbor they like and so on and it's like, hey, I want to rebuild my house. Here are the plans.

Can you guys vote on it? You've got a month. I wonder whether you could remove a lot of the really complicated social dynamics around it.

Uh, the other the other benefit that I think you're going to have is a lot of neighborhoods have like the challenge is if you're creating a new neighborhood in a new city from scratch, you can get a bunch of like-minded people that are there for similar reasons at the same relative time, which is very different than somebody that moved into a neighborhood in the 60s, has been retired for 20 years, and their set of priorities is very different than the young family who's coming in today and, you know, maybe paid 10 times more for their house or something like that.

And that those sort of like competing priorities of somebody who spends all day at home is very different than you know a young a young family who like you know prior is like super oriented around security or you know something else. Yeah, I think this question. Oh, sorry. Oh, no.

I was going to say I think there's actually two really deep truths in what you said.

And the first one is I've heard from a lot of people that's actually what they missed the most about kind of moving into a new subdivision which is often it was a lot of young families and so you had everyone was kind of in the same stage of life and they had kids and it really created a sense of community and that's harder to find.

Then the other one is the other kind of exciting thing that came out of CO was people realizing just how much better your life is if you can live 5 minutes away from your friends or a minute away from your friends. I mean we lived during CO we moved five doors down from my sister-in-law and we just had the best time.

It was it was incredible. And um and people came back and they said hey I'm going to try to move in close with my friends. But it's really hard to do it in practice, right?

You need to solve this issue of you all need to find a home in the same neighborhood and nobody wants to be the first one to jump and and you're driving up the prices. Um, and then for a lot of the people who want to do it kind of in in in tech, you don't always necessarily want to move in like a new subdivision.

But I think that's going to be a huge part of who moves into the new city is going to be a bunch of people who live right now different parts of the Bay Area and they all kind of like the design aesthetic and will be trying to build and they can get houses on the same block.

I mean, you could you could connect my my my wife and her sisters have the plan of connecting the backyards. Um, that's amazing. So, uh, I think there's going to be a lot of innovation in this kind of not communal living, but kind of co-l livingiving or living nearby with your friends and family.

That's going to be pretty cool. I love it. Uh, my last question. Have you played City Skylines? No. You got to It's a city builder. It's what you're doing in real life. He's playing He's doing the real playing the game. Uh, but it's like the most popular modern version of Sim City.

Uh, I'm sure I'm sure a lot of fans will enjoy it. They can play along at home. Uh anyway, thank you so much for coming on the show. Yeah, this was great. I'm so excited. Thank you for uh I can't wait for the, you know, for you to move into your place. It's going to be a 15-year overnight success. Exactly. Oh, 100%.

Next time, next time you guys should come up and uh we'll we'll site once. Fantastic. All right. Good to see you. Cheers. Have a great rest of your day. Let's move on to the timeline. You threw this in. We got to talk about this.

China is currently exposing all the European luxury brands with Tik Tok videos confirming that over 80% of the luxury items being bought at ridiculous prices are made in China and only packaged in Europe. Interesting. Uh this Yeah. I got to basically put this in the truth zone. Okay.

There are a lot of luxury goods brands that make products in China. Sure. But they were that some of these videos coming out were were basically like Birkin bags or like knockoffs, which is like Yeah. And and and and I I do believe that this was like basically in a large part fake news.

Going on going on and saying your Hermes bag is made in China is offensive to the generation of artisans that have been handstitching these bags uh in in Europe for a long time.

The goal here is is to get American consumers of luxury goods to falsely believe that their goods are made in China and therefore be anti-tariff or anti- trade war. Is that correct? Yeah, I think that's the strategy. I think that's generally the strategy.

What's funny is they could just be like your iPhone is made in China like and that's true and also the whole I think I think the whole idea of I don't think brands should optimize for transparency. Like nobody wants to find out they paid 20 times more for a product than what it costs to produce.

But at the same time, I think people like when they're making a p purchasing decision, like it's it's they're making it based on the fixed final cost of the item, right? It's that's that's how they're an analyzing like the sort of value exchange. Um it is interesting.

I um the one thing that China did recently is they basically made knockoffs and dupes legal in the country. They used to like crack down on it more. Um, but you can actually go in China and go to entire malls where it looks like a Prada store or it looks like a Northface store except every single product in it is fake.

Um, and like very good quality. That's the thing. Like they can nail the quality. It's not going to be the same quality as some you know uh like a you know a dupe Birkin bag won't be the same as as you know an authentic one, but from 20 feet away it'll look like it. So I don't know if that's true.

I don't know that China can always uh copy things with enough quality. I was thinking about the disaster that could occur if you tried to buy a fake EightLe and then it ruptured and you drowned to death because you bought a cheap eightle instead of just going toleep. com/tbpn getting a real eight.

They have a 5-year warranty. 30 night 30 night risk-free trial, free returns, free shipping. Uh how' you do last night, John? Go uh off on the I I already checked. I'm off on the schedule again. I figured it out though. I have cracked the code and I'm gonna be upping it.

I was at a 90 last night, although it's dropping now. It's a nine. Now it's an 89. I don't know what happened. It It does after you wake up. Okay. Well, I slept pretty well. 740, but my routine was at a 73% and I figured out the algorithm for the routine, and I'm never making that mistake again.

uh you have to it takes the the rolling three-day average of when you go to sleep and you have to be within that band within 30 minutes of your rolling average. So you can be a night owl and still have put up but it's about consistency. You got to be consistent specifically 30 minutes within the rolling average.

So now I'm I'm dialing in my rolling average. I know what that time is. I'm going to be asleep before the 30. It is it is funny that people people take the time that they wake up very seriously, yet don't take the time that they go to sleep. It's the bedtime alarm is more important than the wake up alarm for sure. Yeah.

Uh anyway, in my household, the alarm bells start going off 7 p. m. It's bedtime. It's bedtime. Nobody sleeps harder than me. It's bedtime. Uh this was interesting. Yeah.

Uh, so I guess apparently some news came out that the White House released a corresponding memo indicating that the exemptions also extend to changes in small parcel shipping duties, Apple, Teimu, Sheen, whatever.

Um, so anyways, this guy Dave is saying, "Wow, so the news over Yeah, the news over the weekend was, hey, for the really critical stuff, you know, we don't want to destroy Apple. It's one of the greatest American companies. We don't want to destroy Nvidia. We're going to create exceptions for those.

" But apparently in this one corresponding memo, Timu and Sheen were also included in the exemptions. Uh, and they've been taking advantage of that deminimus exemption where they don't pay any tariff if they're under a certain weight. And, uh, Dave here says, "Woo, almost hurt Timu and Sheen's businesses.

" Uh, which is ridiculous. Obviously, like that's the easiest category to target because it's it's purely eroding quality American goods with this crazy loophole. Uh and people have been expecting a dimminimous exemption uh you know tariff or or addressing that loophole for a long time.

Uh we talked to Ryan Peterson at Flexport about that. Um so it'd be very weird if that sticks around. That feels like an anomaly or something that might get flipped. I think shortterm I think it's short relatively short. I mean a lot pretty much everything. So they're planning to close it on May 2nd right now.

Everything everything is short-term right now. Nothing is nothing is written in stone. It's still free game. Uh if you're trying to buy a couch for $15 Yeah. head over to Teeu. Yeah. Download the app. Yeah. And uh I mean you can think about all the tariff stuff as like vibe law makingaking.

You just embrace the exponentials. Let the vibes take over and forget the law even exists. That's that's the way you do it. Uh anyway, Kyle Tibbitz over at Wander uh is posting a photo of the Masters. They ran an ad in the Masters. I can't imagine a better audience to hit with a Wander commercial. Uh and and very cool.

They're using a little uh a little news bar at the bottom. It's a nice design. I like it. Let you know as you're watching the the the ad, the. com, the logo, there's a surprise waiting for you at checkout. So, head over to Wander and find your happy place.

Find your happy place, book a wonder with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, 24/7 concier service. We should put all of our ads and publish them as like a sp an artist on Spotify. People can just listen to them. Totally. I think the uh the song has been a resounding success.

A success. Yes. Um it's going to worm its way into someone's mind and in 10 years they're going to book a wander and have the Find Your Happy Place jingle play in their name. Play in their name. We if if if real success looks like you go to wander.

com and just automatically I want to bring back like songs that play when you land on a website automatically. Yes. So and those trailing mouse moves like the the mouse move the trails and and the colors and really HTML 1. 0 vibes.

Success looks like our face our faces being used as like if you have a question ask us and it's like in the bottom right hand corner. To me, success looks like going to getbzzle. com and getting a watch because your bezel concierge is available to help you source any watch on the planet. Seriously, a watch.

Uh, they're recommending the Rolex Date yellow gold. That's the presidential. They got the GMT Master, the Batman, they got the Date Just Wimbledon. They got a Submariner on here. There's lots of great options on Bezel. Go check them out. Uh, anyway, I I like this post from Will Brown.

underrated underrated poster put putting up some great content. Uh so he's quoting Paul who says, "So Google Sheets now has an equals AI formula. You can process data that was impossible before in a spreadsheet. Gemini understands what's in the cells and returns tailor made answer.

" And uh and he quote tweets with E= MC² plus AI. And do you get that reference, Jordy? I do not. It's a very funny reference. Someone posted an extremely cringe LinkedIn thread about how uh AI is so disruptive, you must now consider a new formula called E= MC² plus AI. And it was very viral. It was very funny.

Uh but it is very silly that that Google Sheets just has an equals AI formula because most of the other formulas are like specific mathematical formulas.

Like AI can do a lot of things just like math can do a lot of things but typically uh you know you have a formula for a sum or an average or a vookup that does something specific not just equals AI. So, uh, the bad naming continues across all AI products.

But it's not all bad news because France, the creator of Arc AGI, former Google employee, uh, just posted, uh, Google quietly released a powerful recommener library, uh, optimized for Jackson TPUs based on caris, which is the library that he created while at Google. It's called RecML.

It has, uh, native support for sparse core, latest, uh, hardware for handling large distributed embeddings.

And so what this means is that if you're just building a, you know, the next Tik Tok clone and you want to do uh recommending of different content across a really large system, they have a pre-baked machine learning system. And these types of advancements are getting completely drowned out by everything in LLMs.

But just a just a vanilla recommender system is extremely valuable. Yeah, th this type of system would have probably cost you millions to create even five, six years ago. Chris Dixon, number one on the Midas list a few years ago. Coinbase seed or series A investor.

Uh he one of his companies Hunch I believe is Hunch maybe. Uh he I think he sold it to PayPal or eBay. Uh and the whole product that he built was a recommener system. And so this was called collaborative filtering and it's what drives those uh you may also be interested on Amazon.

These are really really critical systems for e-commerce sites for Netflix. How does it predict what you want to watch next? This has then been baked into Tik Tok and Instagram reels and and the remember you remember when Netflix like everyone was like oh that's their alpha like they just know how to recommend.

No it's commoditized but but it's exciting now.

It's exciting that that it's available just just via Google and you can uh specifically use sparse core which allows you to embed large distributed embeddings which means uh like when you when you define what makes a post on X recommendable it's not just here's the text it's here's the text here's the user is their video what's in the video what do the comments say how long did people spend watching this video or how long did people spend reading this post, did they share it?

There's so much other data that you could think of like metadata, but all of that gets embedded into uh like a basically a matrix of of what is this about and then that can be recommended based on other things. And that's why these algorithms are getting so uncanny.

You know, you watch you watch one video about uh I don't know, McLaren F1 and then pretty soon you're seeing 25 more, right? And it knows that oh, you're interested in McLaren F1. might also be interested in McLaren P1. P1 GTR takes you down this different road.

Pretty soon you're learning about Senna watching hours a day of Doug Demiro. Exactly. Exactly. Uh that's all built on recommener systems and these recommener systems are not defined in a way that it needs to it needs to in understand what a McLaren F1 is in a human readable form.

Any new topic can instantly be baked into the recommener system through these embeddings. So very exciting. So little shout out to Google for delivering some great software. We love to see it. I love big tech. I love big tech. Uh let's go to Jeff Lewis.

Uh he says it it's fair to call the US dollar's decline yesterday parabolic. More important than ever for investors to ask what's growing parabolically amidst macro volatility. At Bedrock, our our answer is clear. Open AI. We've concentrated nine figures into OpenAI across multiple flagship funds since early 2021.

And we've never been more bullish. Yesterday at TED, Sam Alman shared, "10% of the world now uses our systems. " A lot. I love it. Uh, crazy. It's great. Uh, yeah. I mean, I think the number that was floating around was 500 million weekly active users, something like that.

But that's but pacing to potentially get to almost double that by end of year. Yep. Which is crazy. Yeah, it is funny that I think they might still be eligible for using some of the open-source uh libraries.

Like I'm pretty sure they could technically still use Llama because Llama set the threshold at like 800 million users so that the other services couldn't use it or something like that. Uh there's all these funny uh like big tech wants to exclude each other, but they are quickly becoming uh definitionally big tech.

And uh yeah, it's consumer consumer tech company, but we'll go more into Chat GPT and OpenAI and what's going on. Uh Willm writes, "Chacht memes like roast me, create a CIA report, Gibbly Filter, etc. feel very familiar.

a throwback to Buzzfeed quizzes, Facebook personality tests, super intelligence or not, we just want to have fun and see ourselves in new ways. So, I did one of those when they rolled out memory. I I prompted it with one of the prompts that was floating around that was like, "Tell me my blind spots. " What did it say?

And I was very disappointed with the response. It just felt like super general astrology style answer where it like could apply could apply to anyone basically. For me it for me it said it said I knew I knew my supercars really well.

I knew the holy trinity watches really well but I was really really lacking on equestrian and specifically Dr. history like I don't know who the historical winners are. leave the studio and you'll you'll spend hours talking to Chad GBT just over over audio just about Dr.

Horse and so it's basically knows like you're not fake which I think is can't fake it till you make it. I think it's a real blind spot. I think Dr. is going to be huge. Yep. First we talked about this. It's going to be huge. Dr. is coming to Los Angeles. It's in the Olympics. It's in the Olympics and we will be there.

We will have a box. We'll have a box. It'll be half VCs, half tech journalists. It's going to be the biggest crossover event in history. You heard it here first. Let's go back to Jeff Lewis.

He says, "Memory transforms chat GPT from merely an unprecedented consumer phenomenon into missionritical infrastructure for individuals, families, enterprises, and society at large. " I agree. I think it's very cool. I did see someone put this stuff in the truth zone. Well, let's go back to Will Brown.

He says, "Chat GPT memory is the most disappointed I've ever been in an OpenAI feature. It's unbelievably simple implementation and it doesn't even work. It's crazy that they released this as a pro feature. It is significantly worse than the vanilla clawed memory MCP tool. Sorry.

Uh so little bit of back and forth on how good memory is. I imagine it's less important that it's amazing on day one and more important that it just keeps growing and growing and growing because uh obviously we've seen scale is all you need. Scale is so important to these systems even if it's not great today.

Yes, it might not know your blind spots today, but let's talk about this in a decade. Like maybe it has even more. Are you really confiding in it?

It's probably a wildly different experience if you're using it as your journal every day and documenting your entire life in there versus, you know, just using it as information retrieval, right? Yep. Will says he's pushing back his timelines. Tyler Cowan disagrees. Well, yeah.

I mean, should is is infinite memory a prerequisite to AGI or is it a separate thing? uh OpenAI has actually mapped out the step function like the five steps in the layer to kind of their growth path and uh TAN who's been on the show mapped it out. Uh level one was chat bots real-time predictive responses.

This is 2023 system one thinking that's chat GPT that's GPT40 then you had the reasoners that's level two thinks for longer before responding system two thinking this is late 2024 you had 01 03 03 mini chat GPT search deep research that type of stuff then agents we get to we get to the third level this is where they are now in 2025 AI that can do work for you independently that's tasks operator deep research and now this code product that they're building uh innovators that's level four develops innovations independently.

That's something that we have not seen from any LLM or AI system really, but we're very optimistic about it. There's been this big question, hey, you have a system that is it has all of the knowledge in the entire world. Why can't it put two things together and just notice something, right? That happens all the time.

Like the the like the reason we discover like penicellin or something is just because like there's a guy who knows about all these different things and realizes that, hey, these two things are correlated. Let's dig in there. And no one's been able to pull an innovation out of these things.

And you even feel it with the the text, the tell me a joke, the the come up with an innovative business strategy. It'll just be like, oh, like you should start a coffee shop because coffee shops sell coffee and this is way it's good at like stock business planning, not not new ideas.

And so that's where they want to get with level four. And then level five is organizations. They want them to think strategically and achieve organizational goals. Uh we'll see how fast they get there. Today we uh two more things to cover before we call it for today.

OpenAI co-founder Ilia Siver safe super intelligence uh pulled together the round at 32 billion. You love to see it. Love to see it. Little size for Ilia. Sizegong moment. And uh we had some other news. Larry Ellison has started following TVPN. Thank you. So welcome. Welcome to the show. To the show and the community.

Uh you are in many ways our technology brother but also our technology father. Yes. So a true inspiration. I mean founder mode for decades, one of the greatest tech companies has played such a role in in so many tech transactions. He's in the conversation about Tik Tok.

He was a financeier behind Elon's purchase of Twitter. Fantastic taste in hotels. He has sensei which is phenomenal. Malibu Racket Club. Yes. many esteemed institutions big into sailing. Yes, he's doing it right. To say the least. Um, today was a fun show. It was a great show. Very optimistic. I'm excited.

Uh, I just keep coming back. I'm excited to experience AGI later this week. Yeah. And I enjoyed the 30 minutes. I thought that was a great pace. 20 minutes, 30 minutes. We start doing the 15s. They get a little bit too fast-paced. I like the way we handled it today. So, thank you for watching. Thank you for listening.

Leave us five stars, Apple Podcast, Spotify, and we will see you tomorrow, folks. Looking forward to it. Have a great day. Have a great Monday. Have a great Monday. Bye. Cheers.