Josh Wolfe on Reflect Orbital, Basic Capital, the collapse of science funding, and his skepticism of humanoid robots

sleep. Congratulations. Uh we got Josh in the studio. Welcome to the stream, Josh. How are you doing? Haven't seen you since Hillen Valley. Yeah, with a tie. No tie. Oh, no tie today. Well, we we'll get you next time. Look at the Look at the games, though. Today, but he's looking great.

Josh, what's your what's your workout routine? You're looking jacked. Oh, man. We We uh we do basketball. Okay. Got some jiu-jitsu. Yeah, we do it all. We try to stay young. Yeah. Got it. Uh let's talk about the latest deal. Reflect orbital is in the news. Uh take us through the anatomy of the deal.

Break it down for us. You know, amazing entrepreneur um combination zipline SpaceX guy Ben Noak um Sean Maguire uh friend partner at Seora uh was early. Uh he and Alfred seated them. We led the series A. It was one of these ideas where it's like you've got the sun, it really is only available for half the day. Mhm.

And they had a very simple insight which is that there's so many satellites that are launching.

What if we took a giant myar balloon effectively and had this big planer area that we could basically redirect the sun and everything from solar efficiency so that people that uh are running solar cell farms could basically get you know double the output to people that were doing search and rescue or military operations.

you know, where could you literally task a satellite not for visual imagery but for sunlight? And we thought that that was a very clever idea. So, we funded them uh probably a few quarters out from formal launch.

And uh the inbound has been insane from all over the world of people saying we want to be able to task satellites to have directed sun wherever we want it, when we want it, which is pretty cool. From governments or enterprises or both? Both. Yeah. You can imagine folks in the Mid East.

Um, yeah, folks where there's actually money at the government level, but no way that they could possibly do infrastructure for street lights at night. Interesting. And so, yeah, there's a lot of applications that have been popping up that we here at for never imagined.

So, it's one of those things that develop a capability. Don't underpromise uh you know, don't don't over promise and uh underdel. Do the exact opposite. Yeah. And people are coming to him. So, yeah, we're really excited. And he's super smart, super super sharp. Yeah.

What do what do you think are the exciting second and third order effects of something like this? Right. If you make an area that's dark for most of, you know, not most, but but some percentage of a 24-h hour period and you light it up, I can imagine that would have positive impact.

You know, I think there's a bunch of data on like street lights for the Andrew Huberman crowd. Well, yeah. I don't know. I don't know. Andrew Andrew might be uh might be like, "Oh, you're you're disrupting my circadian rhythm or something like that.

" But no, but isn't there there's a ton of data on like street lights and crime, right? It's like if you light up an area like there's a massive reduction. I'm curious if you thought about um kind of the the potential externalities of the technology over time. Well, the first one again is energy, right?

So, if you're able to produce electricity and solar is getting way cheaper and way better, but the efficiencies are still 50% of the day when you have sunlight. Um and then you're doing battery storage.

But if you could extend that in certain areas and particularly if there were sort of adjacent farms that weren't lighting up the city and screwing with people circadian rhythms so that then could be transported through electricity through storage and electricity transmission. I think that that's exciting.

Um yeah, sporting events, late night soccer games, you know, all the kinds of things where in New York City, it's no question, um you know, in Palo Alto, it's no question to be able to light up uh stadiums, but if you wanted to light up an area that was an entertainment zone or uh you know, you can imagine things there for sure implications on safety again on search and rescue.

You know, there's a reason that we always say whether uh people are huing towards elements of honesty that sunlight heals all. So, uh yeah, I'm a big fan of the sun. This feels like one of those deals that kind of lives and dies by the uh like specific variables in a spreadsheet.

If launch costs are a little bit higher, it could be really, you know, they could get kind of stuck if they don't fall enough or you know the the the distribution of sunlight that's not concentrated enough all of a sudden doesn't make economics sense.

Is this more of like a bet on the founder or have you dug into the spreadsheet and are you really confident on the model evolving or is it more like the team's just so good they're going to go figure something out? Well, I would go and say that there's different economics for different use cases, right?

If if you're a if you're a a military and you want to light up a battlefield, you're probably willing to spend a lot more than just the marginal solar user who maybe just needs a little for sure.

search and rescue, you know, are going to be these punctuated emergency kind of things where, you know, people may not spare a cost in military as well. Um, in other cases, obviously, military is going to want the cloak of darkness, right? And so, they don't want to light some things up.

But, um, the honest answer is on the first part, I I I don't know what the pricing is going to be here. We're comfortable first and foremost with an entrepreneur who is so thoughtful about every aspect of weight, performance, the material science behind it, the launch costs, the capabilities, the cadence, the frequency.

And so I think it's one of these things like build it and they will come. And there's a little bit of faith in that. But I have a lot of faith in Ben. I think he's recruiting extraordinarily well. I think he's deeply technical. He's obsessed. I mean truly like obsessed.

Like you know a lot of people do all kinds of things in their spare time. He's reading like math textbooks just for fun in spare time. Um so super super space nerd, really talented. Uh yeah, and Lux and Seoya are uh you know, forgive the pun, but uh excited for it to see the light of day. Nice. There we go.

Airorn for that air horn. Let's zoom out and talk about space broadly. Uh launch costs have been coming down. There's been projections that they're going to come down further. Have you been pleased with the trend of falling launch costs? Are you seeing enough in the entrepreneurial burgeoning space economy?

Uh are there going to be a new wave? Are we in the midst of a wave? Um, is the next generation thinking about other orbits, MEO or very low Earth orbit? What's exciting to you in space these days? I'm just going to give you a cascade of yeses. Yes. Yes. Yes. Yes. And yes. There we go.

Look, cost per kilogram to launch things up into space was the main limiting metric before and um larger vessels, better propulsion, more frequent launches, increasing demand. All of that has lowered that.

When we first did Varta, it was the inverse analysis, which was instead of trying to figure out how do you get low cost per kilogram up into space is how do you actually develop something that is going to be high cost per kilogram to justify doing it in space and coming back down.

Same thing for another and by the way, Varta, you know, I know Delian's been on and but I am so proud. Third launch successfully just yesterday, you know, in the past 24 hours. Australia. Quiet down, guys. Yeah. Yeah. Calm down. you know, Brewy and and Delian and team truly proud of them, proud to be partnered.

It is just awesome. And you know, you're going 25 Mach 25 times the speed of sound. You know, the hypersonic testing people have talked about the hype around hypersonics. It's real and uh really proud of them and the and the launch and and and re-entry capabilities.

Um a related one which was Tom Mueller who you know as you know is Elon's right-hand guy at SpaceX for 20 plus years. Um, we backed him in a company, Impulse Space.

And this was one of those speculative things of how are you going to uh invest in a company today where there's no economy and no demand yet for the ability to transport things, you know, and move them into space once they're up there.

And that's really what he's developing, the vessels and the capabilities that once assets are up in space, how do you think about whether it's cargo transport or moving satellites and all these kinds of things.

So, um, there it feels like that Impulse could like unlock an entire new class of startups built on the stack of Impulse plus SpaceX.

You get something up to LEO and then you push it higher and, you know, there's some examples of things that can happen, but I feel like if you drop the cost 10x, 100x or something, you're going to see a whole different breed of startups, right? Totally.

In fact, a lot of our thinking around this was um you know, it's such a cliche thing that history doesn't repeat a rhymes, you know, but if you go back to history and you look at one of the great buildouts in this country that unlocked commerce and transport of uh material and populations and lives, it was the rail.

And uh you know, so many things have happened during rail for people to compared to booms and bus cycles. But if you look at rail and you think about the tracks that were laid down horizontally and you were to flip them 90° and instead of tracks now you've got propulsion going up to space.

It's very much the same thing of how do you get transport number one and who's going to sort of own those lanes. So that's launch capabilities. Then you've got communications. You know there's a reason that telegraph lines were laid proximate to the rail and it's the same sort of thing.

Now instead of telegraph lines with actual wires you have satellites doing KA and KU band. And you have everything from Starlink to our company Kimeta that we did with Bill Gates where it's KA and KU that are basically switching off of a solid state material with no moving parts.

You know, when you're on a plane and the reason that you lose internet for 2 seconds or whatever is it has lost track with a uh geostationary uh satellite, you know, and of course it's tracking it and as the Earth moves, it's tracking it.

But if you're in a low Earth orbit satellite, you want to be able to track it just like when we're moving through the city and going from cell tower to cell tower. And so that capability is something that's relatively new um for being able to lock on and track satellites.

Then you've got uh people that are making things in space like Varta. You've got people that are transporting or storing them. There's other companies that are doing effectively private space stations because as you know ISS is coming out of service.

you've had geopolitical considerations of who's partnering with Russia or China and and so there is I would just say a very robust space ecosystem driven by the fact that capital follows talent talent follows breakthroughs and ambition and there are so many young smart men and women that want to work in the space and in many of them they were in the pressure cauldron of SpaceX which I think is an incredible culture you know as you know I'm critical about Elon about a lot of things but I think SpaceX is an absolutely amazing business and I think people that are attracted to it, have been trained there, are now spinning out are incredible.

Yeah. I mean, the Varta story is fascinating because they started I remember the very first pitch was for like we're going to make ZB land in space. Then there was pharma. Now they're doing pharma and some defense and hypersonic testing and stuff.

And it's just a testament to like you bet on the founder and they'll go figure it out. But they are riding a really really important trend. Totally.

When when when when uh Delian was first pitching that with brewy, I was like, I have no idea if this exotic optical material is going to be the thing, but the capability of you doing this is going to be the thing. And it's really about that economic inversion.

Not dollar per kilogram up, but high value dollar per kilogram down. And I think even Sean, who we're now we're partnered with in Reflect, made that comment of like he was focused on the micro and he sort of got that wrong. Uh, or maybe he got that right actually.

But the macro, you know, maybe he missed and and super honest, self-reflective. I think I I think with Vard he said the opposite. He said he he he missed the micro. Oh, yeah. Yeah. Yeah. He got the micro wrong. It wasn't It wasn't going to be Zand, right? Yeah. Yeah. Yeah. Yeah. That's right. He got hung up on that.

Macro was like there's Yeah. He should have bet on the macro. Yeah. It was great. Um uh I think an underrated uh just story or fact about you is that you've been in venture a long time.

Can you tell us the story of like the first fund and how you even got into venture and kind of uh what you've learned over the last it's been more than 10 years. Has it been 20 years now? How long you been doing this? So um look I I I'm a science nerd.

I was doing HIV AIDS imunopathology research and I literally got into that because I watched an HBO movie when I was like 13 years old called and the band played on. What was it? Was it HBO? It wasn't HBO Max back then. It was just HBO, right? They swap back and forth.

just old school HBO and uh it was like this ensemble cast and I had to write ambitious naive which everybody that we ever back does which is like I'm going to go cure AIDS anyway I end up working in a scientific lab the scientific lab 3 four days a week after high school finished that all the way through college published in uh two different scientific journals thought I was going to go get an MD PhD my mentor was trading futures and options so we'd be sitting there with a centrifuge of aids blood spinning down waiting to run some 96 well uh enzyme linked imunosorbin assay thing and he's making money and I didn't know anything about the stock market.

My mom was a I was raised by a single mom and she was a a resource room specialed school teacher.

Uh and and I got enamored by capital markets and my life since then has literally been the intersection of science and finance and it is partially the satisfying thing for my own ADHD of being able to constantly meet new founders and I never know who I'm going to meet and then coming up with certain thesis and running them down and either starting companies with founders or or finding the people that are in it.

When we started, Peter Abear and I, who's absolutely amazing. I mean, he's like literally my dispositional opposite. Very much like my actual real life wife. He's smiley. He's positive. He's optimistic. I am usually in all black and negative.

Everybody here has been indoctrinated with this idea that failure comes from a failure to imagine failure. Pete is like, "Well, what if it works? " You know, what if what if what if it actually becomes a multi-billion dollar business? And my wife Lauren him are very much the same. They're smiley.

I always say, you know, I've got resting face. Uh, and it's just it's a it's a great dynamic. People joke, he invented the airplane. I invented the parachute. It's a good yin and yang. When we started, we had friends and family to go out and raise money for Lux. And I joke that we had friends, we had family.

None of them had any money. And we got lucky and met a guy, Bill Conway, who was one of the three founders of the Carlile Group, which at the time had maybe six or eight or 10 billion at most. Today, you know, hundreds of 400, 500 billion. This was a fund for ants back then.

and and we uh we met with Bill and I always say look the counterfactual and this is true of all of our lives and anybody listening and any entrepreneur starting something you just never know and he was in the right mood that day maybe he had a great breakfast with his wife maybe he found out they just made a lot of money for a deal maybe he closed a big LP whatever it is he got good news or he was he was just in a good mood but the counterfactual could have been he was in a mood he was pissed he was angry he was frustrated he was he was hungry and we came in and we pitched him idea that in the history of venture every 10 or 15 years there's some secular wave in technology in the 70s was PCs in the 80s was biotech in the '90s was TMT technology media telecom and our view was like the next wave is going to be the physical material sciences and where they intersect with computer science and all this kind of stuff so it was like the interstases and it wasn't going to be just Stanford and MIT it was going to be like Cornell and Georgia Tech and University of Michigan and UT Austin all these kinds of places and physics and material science and chemical engineering and so he said I hope you make a billion and he believed in us gave us our first pledge fund we were writing small checks We had maybe board observer seats at best and then uh you know a bunch of those things were doing pretty well.

We were building a little bit of a reputation and then we went out to raise our first real institutional fund which we called Lux two because everybody likes a second fund, right? So our first but like nobody would invest in a first- time fund. But if we called it Lux two, there you go. Lux two.

This is like announcing a preempted round. every we've been saying every founder should say that every round is a preempted round because it's just looks better.

So, so Bill becomes an anchor investor in that and we get this like pantheon of people Pete Peterson who's the founder of Blackstone and Stan Dunkin Miller, legendary global macro investor and Ken Griffin founder of Citadel and it was all random connections that led to these individuals and they were writing you know sort of like5$10 million checks and then we got a whole bunch of family offices some small fund to funds a few corporates like Lockheed and Motorola and we could not hit our $und00 million target.

92. 1. To this day, I remember every person that said yes or no, every $100,000 check, the people that have been with us for 20 years, and the people that said no that we would later on because I got chips on my shoulder, we wouldn't let into the let them back in. Yeah.

But, um, so, so I'm I'm very thoughtful about the people that we ever say no to because you never know in two or three years they're going to be the people that you really want it back. But, yeah, we we started small and, uh, today we're five and a half billion. And uh I still remember those those those early days.

That's fantastic. Uh talk about the new uh uh science funding initiative. You guys uh have been following a lot of the cuts, funding cuts. Yeah. Yeah. We talked to a couple people on the show about the importance of basic science research, funding things that don't have immediate economic impact.

What's the impact of a helicopter on Mars? What's the what's the impact of understanding DNA at some atomic level? Uh Obviously you can't stuff comes out of that but it might be a decade there might not be a typical venture payback. Uh what are you thinking about that space generally?

Well first of all the roots of venture capital are really two things. It was deep science and it was defense you know. So defense tech itself is nothing new. It really is the early days of the venture capital indust uh and coner and that spun out from the UC system.

uh that was one of the early important proof points that helped to create the by dole act.

So you had two senators, Evan B and Bob Dole, that basically said, "Look, all this taxpayer money that's going into universities, um, they're producing property, intellectual property in the form of patents, but why don't we allow the university to actually own those instead of it being like marching rights from the government?

" And what that did was just blew out and it happened to coincide with the U Orisa Act where retirement money could start going into private equity and venture capital. That was also in the 70s, late '7s.

Um the virtue of both of those things was that you had now this new class of intellectual property spawned from taxpayer funded research that went from NIH or National Science Foundation, National Institutes of Health, the sort of three-letter agencies going into academia.

They would hire postocs, they would do work, they would file some patents, and then there was this welltrodden method which we happen to be quite good at where you would go to university, you'd go to their tech transfer office. Actually, most of the time you really don't go to the tech transfer office.

You go to the principal investigator, the scientist. And because they're implied employed by the university, they go to the tech transfer office and say, "I want to do this. " If you go to the tech transfer office, often time you're dealing with adverse selection. That's an aside.

You give them a royalty, you give them a license, you do equity, you strike a deal, and then you're funding it. And they typically get some money back uh for all the work that they they spent. They also have what's called diligence criteria.

Very simply, if you don't put up enough money or you don't advance it, then justifiably it goes back to the university so they can take another stab at it with somebody else. And so there's lots of structured deals that you can do here to make that happen.

the university professor, the scientist will typically spend 20% of their time on the company as sort of like the equivalent of what Google would adopt later on. You know, a day a week to do these kinds of things.

And the benefit to these universities were royalties and licenses on some of the most important drugs in pharma, some breakthrough materials uh that ended up in national security. I mean, hundreds of millions if not billions to some endowments. So, really big deal.

And over time, I'd say like probably 15 20 years ago, Venture started doing maybe late '9s more and more just computer science-driven things, more internet, more, you know, um, dotcoms, e-commerce, and they were going away from the universities. We've always had that as part of our knitting.

When we started Lux, one of the guys we invested in was this guy Larry Bach. Larry was a serial entrepreneur. He ended up joining our firm. He passed away maybe seven, eight, nine years ago. He was an incredible guy and uh we learned a lot from company about company creation from him.

He started 17 companies from scratch, took 14 of them public, cumulative market cap over $80 billion. The most significant was Aluminina, the gene sequencing company. Wow. And we learned how to do this and how to partner with young scientists.

So, we've been doing it really nearly 20 years and we've started over 20 companies ranging from high-tech nuclear waste cleanup, which this company Curion that helped with the Fukushima disaster to 4D LAR to um finding real life mutants in a company called Variant Bio where we go out like X-Men and are trying to find these outer people in all parts of the world.

Crazy stuff. But all of it has some breakthrough that happened in an academic lab and you were going and typically it's like 90 95% ripened and ready for commercialization. So you're not really taking that much science risk. The government took that or the or the university took that or taxpayers took that.

What happened now is we saw a confluence of factors. You got politicization that's happening at universities.

you know, where current administration is is punishing for anti-semitism or or absence of free speech or whatever it is, cutting funding, potentially cutting tax status, uh potentially increasing tax on endowments from like 1. 4% to possibly up to 20%.

So, they're facing very serious pressures to say where what are we going to do with our funding if we're not getting it from the federal government? Many of the scientists are innocent. They're doing nothing.

they just want to do their work whether that's finding cancer diagnostics or inventing new materials or coming up with you know all kinds of interesting aerospace applications and so they're facing funding cliffs now and uh some of that is from federal budget cuts some of it is from politicization but it's a big issue this is against a backdrop where to me the biggest issue is not anything domestic it's not about left or right it's about past and future and specifically a future that we are competing with China for China now leads in nearly 40 of 44 critical technology areas cultures get what they celebrate and the culture for Chinese scientists and academia is not our culture is not the Tik Tok culture is not you know celebrating Paris Hilton and Kardashians or whatever it is build what we can to have an absolute utter advantage and an advantage relative to America this is you talk about make America great truly what made our country not just great but exceptional attracting German Jews during World War II and making sure that we were the ones that developed the atomic bomb and having the Institute for Advanced Studies at at Princeton having these amazing academic institutions which were research institutions not you know uh political drama on campuses and this kind of stuff.

So we need to go back to that and we saw that there's bureaucracy funding cliff politicization increasing pressure against this backdrop of competition with China and we said we already do this new co formation and we partner with scientists now we're doubling down and we will go even earlier you lost your grant and it's potentially on the path for commercialization instead of it being 99% banked maybe it's 30 or 50% banked we'll take the risk come join a company spin out into a company license your work to one of our existing companies but know that there's an alternative path Yeah, besides just facing a brick wall, we're going off the cliff.

That's very cool. Um, not to get too political, but uh, you mentioned China, geopolitical competition. What are some countries that you're particularly long or you think are underrated as potential partners to America or potential entrepreneurial hubs? Uh, when I grew up, you know, Japan was making humanoid robots.

Uh, Honda is Azimo. haven't seen a lot of startups come out of Japan, but we're seeing stuff come out of Talpo in Israel with with the Whiz acquisition. Uh we're seeing uh what some VCs are doing in Europe and the Nordics have produced Spotify. Where are you looking across the globe?

What's what what excites you if anything? Um yes, yes, yes. And yes, again, so uh we've got the leading AI company in Japan, Sakana. Oh, cool. Which is which is amazing. And uh a bunch of the partners were over in Japan twice. is the thesis for that national AI like Japan wants their own foundation model. Is that right?

Okay. In part it's sovereign models but it's not like Mistl and France. Okay. It is also sort of a very different almost complexity theory approach to the model. So they're coming out with all kind stuff.

Um one of the founders um Leon Jones uh was the original author and um uh he named the title uh for the paper attention is all you need when he was when he was at Google. So killer team based in Japan. All the major Japanese corporates have now invested and we're very bullish on that.

Um Israel Leon Jones does not sound like a Japanese name, but No, no, he's he he's not Leon. But I mean I'm sure he's having is uh Caretsu is the right word for it, right? Where you get these corporations that sort of build Japan.

They own they own pieces of so the bank owns the piece of the industrial company which owns a piece of the bank and they all kind of work together. It's a very cool model. Sui Sumitomo, Hyundai Heavy Industries makes the oil rigs and the cars and everything.

Now, now that is changing because you are seeing the rise of startups and a startup culture because failure in Japan is very different than failure in Silicon Valley and that's starting to change. Um, and so we're optimistic on that. So that so Japan is number one, Israel number two. Sure.

I mean I really think that this young generation of Israeli entrepreneurs are going to be the greatest generation. They are literally being forged in fire. They are fighting an existential fight for their lives. Yeah.

And people are shifting from, you know, doing apps and ways and and cyber security still important, but they're now getting really interested in defense. We did two companies. Um, one came out publicly. Uh, it's usa in a company called Kella.

You mentioned Talpio Gore, one of the elite guys from Talpiote who went to fight post October 7th and Hamotal Meridor who ran Palunteer in Israel. Just absolutely killer team, coveted, very soughtafter by investors. The other one is in stealth.

um us, Peter Teal, Trey, uh and a and a partner in um in in Israel, Michael Eisenberg, all amazing people. We all came together to uh to fund a company um focused on a capability that Israel did not really have and and needs for some of its its most serious uh foreign adversaries.

So, that'll come out, I think, in the next few months and and um we'll we'll see some other Silicon Valley investors, I think, join in on that. Yeah. Introduce us to the founder. We'll have him on when he when he comes out of that. Couple couple quick ones.

Uh Basic Capital, you guys were the first institutional investor, maybe the first investor ever. Uh what uh what was what was your personal journey to investing in the company? It was getting a lot of uh attention this week.

It was funny because when when a new company comes out to fund like auto loans like nobody bats an eye but if you want to give people the ability to uh you know you know basically use debt to buy uh assets that appreciate suddenly it's a big controversy I think a lot of people got maybe they got the the calculations wrong too I saw so the internet was really doing its thing but I I would love to hear it is it is controversial um but we think it's necessary credit due honestly um love them like him, hate him, never ignore him.

Bill Aman really was the CEK. Um, we came in, Henry Kravis came in. Um, and, uh, the founder is amazing. I mean, uh, he doesn't really talk about his story, so I'm not going to go too deep into it, but he grew up, I'll just give you in a refugee camp, Palestinian in refugee camp in Syria. Wow.

Uh, basically a Hamas run camp. And the story is insane if and when it comes out on how he got out of this situation. ended up in first Europe and then the US and then Goldman Sachs uh and becomes an expert in fixed income and uh complex derivatives and is just absolutely brilliant and resilient.

Uh so we loved him and his personal story first and foremost. The way we got to him, our partner Dena Shaker um I think through some um shared uh ethnic connections. He reached out uh it wasn't an area that she had a particular expertise or interest in per se.

Shared with our partner Peter who loves a lot of stuff in finance and they end up spending like 90 minutes together. I don't even think they talked about the business until you know last 10 minutes or something. Um but Abdul is is very special. Yeah.

Matt Lavine, I think, has covered it for the past two, three days in in sort of a positive way, which for him and he's a friend is a is a is a is a nice thing to see. Uh they're going to figure out their model, but the premise was we allow people to borrow for all kinds of depreciating assets and we just accept this.

We allow people to borrow for consumption. We allow people to borrow for homes and you know the theory that homes are only going up or for cars as you noted.

Um why do we not allow people who are not owners of the American company uh uh American economy in particular to own a piece of it because that if you really care about inequality the wealth gap is because people that have the ability and the savings to invest in the American stock market and just watch it compound over time even in lowcost index funds um are are at a superior advantage.

And so that's really what he's looking at and and addressing. And uh yeah we we uh we're very fond of him. Uh last question, humanoid timelines, bullish, bearish humanoids. Uh Tesla uh Tesla right now is pricing in humanoids uh almost immediately, it feels like.

Uh but uh but yeah, what's your thought on uh I'm pretty sure Elon is curing blindness, autism, uh you know, all I mean, yeah, we we'll we'll have a whole another Elon discussion on, you know, his relationship with the truth and some of my criticisms on some of the other things outside of SpaceX.

But um look inside Lux there's a dithering spectrum of people that are super bullish on humanoids and people that are super skeptical. I'm more skeptical on humanoids even though we've made some investments in that I don't think the form factor should be two arms and two legs. It's a lot of motor it's a lot of motors.

Right. Well it is a lot of motors and that's actually a big opportunity as well for a lot of companies. Um and it is widespace because 70 80% of the motors are coming from China. It's about 60% of the bomb for most of the motors. Average humanoid robots going to have at least 25 motors.

you imagine them selling 10,000 or 100,000 of them. I mean, you're talking about millions of motors. There's going to be an opportunity for motors. Not clear whether it's going to become standardized, special, small batch. Um, but there's an opportunity in a white space there because we are so dependent on China.

But I care more about the fact that most of these things are being teleoperated trained. Uh, even you know, Optimus, which was sort of a performative thing because most of those things except for when they were dancing were being controlled by humans.

So, it it wasn't really fully honest until they revealed that like a day or two later, but it was too late. Um, but even two arms, two legs that they're being controlled, why am I unpacking a sink or folding something with two hands? This should be in the Darwinian sense endless forms most beautiful.

You know, he was talking about the diversity of species. I want to see a diverse set of robots that are almost like the canteen scene out of Star Wars where you're like, "Holy like did that thing just have six arms and just did that thing like that is unhuman? " That's what I think our robots should look like.

More droids, so to speak, than robots. But the amount of competition that's here, you know, there's seven different companies today trying to do humanoid robots of serious scale. Um, talent is flowing between them and we're we're going to see them. The question is where's the killer app?

And everything I hear is fold laundry, undo your dishes, be a companion to somebody in your home. Um, I haven't seen that visionary person that's like, "No, no, no. The way that we're going to use robots is XYZ.

" And I get the argument why humanoid robots make sense for a human-built world with door frames and steps and buttons and all that kind of stuff, but I'm convinced that the the future robot company that rules them all is going to be either something like one of our companies, PI, Physical Intelligence, run by Locky Groom and and great team.

Incredible. Right. That is all about the embodied intelligence. Y they don't care about the form factor. You want to use Chinese Unit, you want to use uh one of our other companies here, Fauna. Uh sure, all good. But we're going to be the embodied intelligence. Sure.

Uh that I think is really interesting because one way to make money in venture is always understand where what's abundant and what's scarce. And what's abundant in say AI is training data. You can train on the open web, you can train on Reddit, you can train on Twitter, etc.

What's scarce in robots is having a repository of training data. And so that's why you've got humans that are doing this teleoperation and training them through kinds of scenarios.

But when they enter unstructured environments, what you want is these world models that basically navigate a situation that they've never been in. If a founder came to you uh named Dar, would you get bullish? You did you popularize nominative determinism? You have a thread.

It's it's now I think I got to figure out how many people are on there. 106. Yeah. 100 six listings, you know, start a friend of mine. Um, I'll give him a shout out, guy, Russell Diamond.

He's a totally different form of business, but I think it's I don't know when I start posting, it's got to be at least six, seven years. Um, and some of them are absolutely hilarious. I mean, the most recent one, it's it's Rich Fairbank is the CEO of Capital One. Are screwing with me now?

Like, some of these names they're just putting out. They're like, let's see if Josh just gets pissed off. Well, it's amazing that you've built a firm instead of being a solo capitalist, a lone wolf. But uh it somehow worked out. Anyway, it was great having you on the show. Thank you so much for joining us.

Always a pleasure. Overdue for for a full segment. We'll talk soon. Uh and we don't want to keep Jason waiting any longer. So, let's bring in uh Jason now uh to chat about the history of 37 Signals uh bootstrapping versus venture capital.

I'm sure we're going to get a bunch of interesting takes and hopefully have him join the stream right now. Welcome to the show, Jason. How you doing? Hey guys. Good. Thanks for having me on.