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Transcript of our conversation with Wayne Crosby:
Immad Akhund:
- Hey everyone, welcome to the Founders in Arms podcast with me, Immad Akhund, founder and CEO of Mercury.
Raj Suri:
- And I’m Raj Suri, co-founder of Lima and Tribe. Today with us we have a longtime Silicon Valley entrepreneur, very experienced guy, Wayne Crosby. Wayne, welcome to the show.
Wayne Crosby:
- Thanks. Super excited to be here today.
Raj Suri:
- You've had a very interesting career. You, I think you, you start, you were one of the OG YC founders, right? Were you in the same batch as Immad?
Immad Akhund:
- I did the batch before or after, I think just before you did it.
Wayne Crosby:
- So we were winter 2007. Yeah. So that was like long...
Immad Akhund:
- We did summer 2007.
Wayne Crosby:
- Okay. So the next one after. But it was a, it was an amazing journey. Just like I, I remember when we applied my co-founder and I, we, we sent in the application and like literally the next day my wife and I found out that we were expecting my first son and it was like, oh my God, here we go. Like we're gonna actually like, figure out how to actually make this thing either go or not go and...
Immad Akhund:
- Then you sold the company within a year, right?
Wayne Crosby:
- We did.
Immad Akhund:
- Or something like that?
Wayne Crosby:
- Yeah, we did.
Immad Akhund:
- So that is a crazy ride.
Wayne Crosby:
- It was a crazy ride. We, we like, so I, I was actually like born in the Bay Area, but then grew up in Arizona. So we, I was there with my wife and we were trying to like figure out are we gonna build a company, Arizona, are we gonna build it in Silicon Valley? All of that stuff. You know, it, that conversation was still happening back then in just as much as it is happening today in terms of like, is San Francisco still the hub? And, and we, we moved out here, we sold the company, like had a kid, it was like an insane year. Super fun.
Immad Akhund:
- I guess for the audience, Wayne built a company called Zenter, which eventually became Google Slides. And then you stayed at Google for almost 10 years, right?
Wayne Crosby:
- That's right. I was there for a decade. So I went from, they basically, Google did three acquisitions almost simultaneously. They did one for, for docs, one for sheets, and one for slides. And then they threw us into a room and they're like, Hey, you're now our productivity suite. Go figure it out. And we were all built on different tech stacks and we were all right. Like, so it was like a wild ride while we were getting that going. And then once the, once the productivity suite was up and running, did a bunch of other things at Google, did a, you know, they kinda, ill faded Google plus bunch of stuff around there, but some good things came out of it in terms of one of the big initiatives there was sign in with Google. So every, I think everybody still uses that. And then did a bunch of AI, ML stuff at Google. And in early days of that I saw Jeff Dean give this his cat detector talk. If you haven't seen it, it's, it's fantastic. I highly recommend it.
Immad Akhund:
- But what is the cat detector talk?
Wayne Crosby:
- He basically built this unsupervised neural net of all of the key frames of YouTube videos. And then like the punchline of the whole talk is like, it's the world's most expensive cat detector. 'cause basically all you can do is like tell whether or not a video has a cat in it or, but it was like the early days of, of machine learning and, and AI. And I saw that and I was like, oh my God, this is the future. We gotta, if you can actually start doing some predictive interfaces from an application experience, then you've, you've like really got the holy grail on this stuff. So I joined the AI ML team, they're super early and, and did a bunch of really cool things. Like the, at that time when you were doing like Google image searches, you were doing things like, you know, search for a red car and you would still get, you know, the, the alt tag image text was did it have a red car in it? There was no computer vision in order to be able to be like, oh, there's actually a red car here. So it was, it was, it was blast. You know, the, all of the, the early kind of language model stuff too started to come out around, you know, the, the Gmail auto complete the, the suggestions and stuff like that. So it, it was a fun team.
Raj Suri:
- Yeah. I think Wayne, you were the first one to tell me that this AI thing is real. You know, you said pay attention, and this was back in 2013 or 2014, you're like, geez, pay attention to AI. You know, and I mean, a lot of the initial work that underpins ChatGPT came from Google, right? It's from, from Google Researchers and Google Papers.
Wayne Crosby:
- That's right, that's right. So like, there's this, this famous transformer paper, right? And actually one of the guys that reported to me is, is an original author on that paper, which is, is pretty cool. And he's amazing. He's got his own startup now and, you know, doing exceptionally well, doing better than I am. And he deserves it. He's phenomenal.
Immad Akhund:
- Who's that?
Wayne Crosby:
- So Illia not, not the Illia from OpenAI, but the Illia from NEAR AI. He's like a, a Web3 AI company. He's doing great stuff. I think like this whole AI thing sent me down this path. I think I've always been drawn to like how software can help people work better. This is like why I did Zenter, this is why I did my second startup Humu, this is like why I'm doing my third startup. And but like along this like journey, I found out that like, there's this cool AI thing, how can that actually help make work better? And I realized like very quickly, like when we were talking back in, in like 2013, that AI was just gonna like, destroy all of the jobs, right? Like it was just gonna take all of them. And I had this like existential crisis where I was like, oh my God, do I actually wanna be a part of this thing that is gonna take all of the jobs that are out there? Like, we find a lot of meaning in work. And that's where I had like, made my career and like helping people work better and like they're all just gonna go away. And, and kind of through that soul searching, I realized that like, I really believe that humans like to work. We, we like to come together as, as you know, creatures that, that like can build something that's bigger than what we could do by ourself. And so, like, regardless of what AI is in place, it's like that, that's like a fundamental intrinsic like human desire.
Immad Akhund:
- But are we gonna be like the equivalent of like digging ditches with spoons while AI is like doing all the real work?
Wayne Crosby:
- No, no, no, no. I don't think so. I think like, because we like to build bigger, right? Like we, we, we always like to do more. Like you could argue that, you know, we're already in like a post abundant society, right? Like, we already have more resources than we could, than we actually need in order to survive. And yet we still work, right? Like we still build. And so I think like the, it's like super exciting time because I think what you're gonna see is just like smaller teams be really successful and be able to do way more than they would be able to do historically. And I think that's like a more natural human state to work. Like we wanna work in smaller teams that are like, we know everybody. We feel like we're actually helping each other. This, this other element that's happening is that, you know, when I started the first company in 2007, it was like the early web days. And if you think about like the, the big businesses at that point in time and the, the big part of the economy there was basically like services and like manufacturing, right? Like if you were a company, you were either like producing something physical or you were providing a service. And, and like both of those models at that point in time, like were, were pretty expensive. Like if you were providing services, you had to like pay a whole bunch of people. If you were like building stuff, you had to warehouse it. And like the, for the first time, the web allowed people to like not have any warehousing costs and inventory costs. And so you think about the, the value creation and the wealth creation that happened as a result of that. And like now we're about ready to see the, the labor costs actually come down to zero, right? So like inventory dropped to zero. We saw all of these gigantic companies, the Googles, the Facebooks, the Amazons of the world. And now you're gonna like watch labor just drop, you know, the cost of actually building stuff to basically zero with all of these AI agents and everything else like that. You're just gonna see this like giant boom of, of wealth creation and, and autonomy and, and like these giant businesses that come up with, with like very little cost. Super exciting.
Raj Suri:
- Yeah, absolutely. And, and your third company now is OrgOrg. It's actually went through YC again. Tell us a little bit about the company and like, you know, why you went through YC again as the very experienced founder. I was there actually for your demo day and you know, saw you give the, the pitch, which was really unique. Got got a lot of cheers actually. It was pretty cool.
Wayne Crosby:
- Yeah, so, so I, my second company didn't go through Y Combinator. We just went out and we raised our series A and, and I honestly regretted it a little bit when it was all said and done. And I think the reason is that when you're building a company, it doesn't matter how much experience you have, there are certain problems that you need to solve at each stage of the company. And, and so until you have actually solved those problems, it doesn't serve anybody to go to the next stage. And so while you might be able to fundraise, you know, and you might be able to like, think that you've solved problems ahead of where you are, the reality is that you like are really best served if you just kind of go through the motions, work the problem, make sure you have your fundamentals right, make sure that the business is set up for success and, and you really do like crawl before you walk and run. And YC is, is honestly the best at that zero to one stage of any accelerator out there. I love the partners. There's a bunch of partners that were in my batch from back in 2007 that are, that are running the, the show now. And so it's just like a great group of people to, to work through that early stage of the problem of like, is there something here, are we actually doing solving the right problems for this stage? And I think like as a founder, your goal should be, you should work with the best people at each stage of the company that you're at. That's how you're gonna go the fastest. That's how you're gonna get the biggest. And, and for that zero to one stage, there's nobody better than YC in my opinion.
Immad Akhund:
- I think especially successful founders end up attaching like a lot of ego to things and like, oh, you know, I'm too, I'm too big to do YC again and like start from zero. And I think that kind of like thinking around like, oh, you know, you, you're too good for something. Or like, you know, you attaching your success to the fundraise and things like that is like a very common kind of thing that happens with entrepreneurs. And I think a common Yeah, it's also a trap. Like I think it's how you, it's a good way to like end up failing. Yeah.
Raj Suri:
- Immad, you didn't do YC for Mercury, right?
Immad Akhund:
- Yeah, I didn't do YC for Mercury. I kind of wanted to do it. It's, I just knew it would take a year and a half to build this thing. Actually, like my worst case scenario is that it would take three years to launch, which is why I raised like $6 million and I was like, you know, I'm gonna have, it will take a long time and it yeah, with YC, if it's, if you're not a live product, like YC just doesn't quite like work very well for you. And then, you know, by the time we kind of launched it, it makes sense.
Raj Suri:
- Yeah. 'cause you couldn't iterate in three months, right? You have to, you have to wait for years.
Immad Akhund:
- I mean this, yeah, it's, yeah, I didn't want to like go like, here's a bank account, it can't do anything, but trust me, it's gonna be good. Like everyone, everyone knows what a bank account needs to be able to do. So the, the bar was quite high.
Raj Suri:
- I had the same problem at Presto where I was building a hardware product, you know, hardware and software and it was really hard to, you know, get it to that phase where it was sufficient for customers to buy. So we actually were, after we were in YC only after a year or so or a year and a half, I think of working, you know, where, where it was actually at a sufficient stage, you know, you know, to raise the next round of capital.
Immad Akhund:
- I don't know if either of you guys feel this, but yeah, I feel like I owe a lot of my success to YC. So I wanted to do YC again, just to like give back to them, if that makes sense. Like, I didn't necessarily, I, I didn't think I necessarily needed it from a money or advice perspective, but like I've, you know, it feels bad to me that like I haven't given back to them by like doing this company through YC.
Wayne Crosby:
- A little bit. Like even when we, when I raised for my second company, I went to YC and I was like, look, you were, you were absolutely critical to the, my success and, and I'd love to have you on board. And they're like, yeah, our, our model doesn't quite match the fundraise that you're doing right now. And like, you know, it doesn't work out whatnot, so different times and, but it was, it was absolutely the, the case that it's like I owe a lot to YC and, and every kind of, you know, the world owes a lot to YC to be completely honest. Like the companies that we all use on a regular basis have been incubated there and a lot of them wouldn't get funding without YC. Right. So I think it's, especially in the early days, a lot of these ones that came up, they, they just wouldn't have existed.
Raj Suri:
- Yeah, I mean, I've been thinking about that actually. I was like, YC should have a program for like alumni who have reached a certain, you know, scale or, or stage where, you know, they, they have a program of just writing checks into, you know, their, their next companies at whatever valuation like they need. They need a probably a side fund or something.
Immad Akhund:
- Well they've tried doing that, but like, you know, Wayne went through his, with his new company and I don't know if Wayne got a special deal, but pre and if you could say Wayne, but presumably not.
Wayne Crosby:
- No, I, I, there's, I think Gary has already talked about this too. Like, so one of the things that I did after we sold the, the second company, you know, the YC gave us a call or gave me a call and was like, Hey, what are you doing? I'm like, I'm literally just sitting on my couch right now. And he's like, well, you know, why don't you come be a visiting partner at YC, give back to the next generation of founders. And so I was a visiting partner there for the last for a year and it was a blast. Like I helping out, you know, the next generation and, and like I mentioned, this is the time to do it. It felt like we were in a little bit of a lull from like innovation and, and ideas and everything felt like just B2B SaaS for the longest time. And now we're kind of like at this next big wave of technology to push us forward in terms of, of innovation and creativity. So I had a blast doing that. And then, you know, what happened on the side was like, I was building org org kind of just helping out some friends because after the acquisition, a bunch of of people had it traded to other companies as happens. And, and they reached back out and they were like, Hey, why don't you like, I really want the, the internal tools that we had at Humu to come to my new company. Can you like, can I have them somehow? And I was like, well, you know, they were all custom built for Humu, but I can build a more generalized version for you. And, and so like we started, I just like built them for friends and we started to see early traction. And this is just like, you keep pulling on the thread when you're, when you're a builder at heart, you just like see something that's starting to work and you're just like, cool, let me just keep tinkering with this and seeing where it goes. And so by the end of a year of, of like me being at a, at YC you know, there was, there was enough there to go like, okay, let's let's do this full time. Let's jump in. And, and you know, YC was generous enough to be like, yeah, let's let's fund it in a way that makes sense for everybody.
Raj Suri:
- That's OrgOrg, right? Like company's live that's OrgOrg I think it was even, it's even like, you know, part of a big part of the YC batch. A lot of YC founders are using it, right?
Wayne Crosby:
- That's right. And so like a bunch of the, the companies were using it for group office hours and whatnot and, and you like easily find content on Bookface. 'cause Bookface is starting to get pretty big too, so easily be able to jump directly to stuff. So it's, it's, it, it's been fun. You know, originally we bought the, I always love like trying to figure out how do you actually get the, the.com of a domain that you're actually trying to get go after too. So turns out org org.com was owned by a, a guy in San Francisco. He's owned it for 10 years. And so, you know, kind of do your, your internet diligence and figure out how do you actually get to them and have a conversation about how to actually purchase it. So that was, that was a fun, fun one too. So after he found out…
Immad Akhund:
- How much did you buy it for?
Wayne Crosby:
- We ended up paying $20k for it.
Immad Akhund:
- Oh, that's so reasonable,
Wayne Crosby:
- Right? Like a six letter domain.
Immad Akhund:
- Did you see chat.com?
Raj Suri:
- No, I didn't see that.
Immad Akhund:
- Yeah, Sam Altman just announced chat.com instead of chatgpt.com. Oh yeah, chat.com now goes to ChatGPT and then I saw there was a tweet by Dharmesh Shah acquired the, the, you know, he is the CTO of HubSpot. He acquired chat.com for himself just like a few months ago, like six months ago, he paid $15.5 million for it. And then I, I guess Sam wanted it and they know each other. So he traded the 15, he traded chat.com to Sam for OpenAI shares for like, basically in kind, you know, so it, it was kind of an interesting,
Wayne Crosby:
- I love these stories because like with the, with the, with the orgorg.com, once the, once the owner of it found out what we were doing, he wanted to like put some of that money back into the company, which was great. So like now he's on board and, and he is ready to go. You know, thinking, thinking back to like the YC connection and the impact and, and tying it together with this domain story. You know, when we were going through Y Combinator, one of the guest speakers was Evan Williams, and at the time he was doing this company called like ODO, which is actually why he was coming to talk to us. It was like a, a podcasting company back then. And, and he shows up and he goes, you know, this, this podcasting thing isn't quite working out for me, but I think I've like stumbled on this other thing that's like maybe micro blogging or something. And it's like, we're calling it Twitter, we don't know where it's gonna go. Right? Like super early days of this. And when he found out that we were building Zenter, if we were like struggling with a name, we couldn't like come up with a name to save our life. He's like, I've got the perfect name for you. And I was like, okay, cool. He's like, I own Zenter.com and I will like, he's like, you know, like presenter, it's perfect. And he's like, yeah, I will, I'll sell it to you. And I was like, okay, great. Let's, let's, let's do this deal. And he is like, actually I just want shares in your company. So like, this happens a lot, you know, where, where people are doing these domain exchanges for ownership in the company and, and they believe in it and it's, it's super cool.
Raj Suri:
- Do you guys collect domain names? I know Immad has a cool story too of Mercury, I'm sure. I think that's not an easy domain to get, but just curious if you guys collect domain names.
Immad Akhund:
- Not really. I, every now and then I do.
Wayne Crosby:
- Do you?
Raj Suri:
- No, I know some people do though. I, some entrepreneurs are just like always buying stuff, right? Like looking, what's...
Immad Akhund:
- This, this dude on the internet bought ImmadAkhund.com and I was like, can you sell it to me? And he is like, I want $2000 for it. I'm like, literally no one else in the world will buy this for me. Like, I don't even have like a good use of this. And I was like, I'll give you like 200 bucks. He's like, no, I want $2000. I'm like, okay, fine. You could just pay the yearly cost and I'll every year that goes by. Since then, I'm just so amused by it because, and then he came back, he's like, no, no, no, I'll take $500. And I was like, Nope, $200. It's like, I have no, I have no use for this. And I just find it funny that he has to pay every year to keep this domain that's useless to everyone but me. But yeah. Anyway, mercury.com was very expensive and a pain in the ass to get, I don't know if I've publicly said how much it was, but more than a million. And there's a company called mercury.com and Mercury Interactive is Israeli company sold it, sold for 3 billion to HP. So HP owned the domain and they stopped using it, then they spun off HPE. So then HPE, which was a software wing of HP owned it, then they sold half their business to Microfocus who then owned the domain. And it was still pointing to hp, but Microfocus owned it. So it took a while to just figure out who even owned the domain. Mark Andreesen is on the board for HP and he, you know, they invested in our seed round. So it went from like the board to like, who the hell owns this to like HP to micro focus. It took like six months or more to figure out who owned it. And then this lawyer in Utah was like, okay, it's ours, but like, we don't wanna sell it to you because we are like a $10 billion company. And, and then I just kept bugging him for every, every few months until they were like, okay, we don't really need it, you can buy it. And then we managed to come up with like a nice deal where we paid for it over like five years. So it wasn't like too painful.
Raj Suri:
- Yeah, great story. I have one for Presto as well. So we knew very early on that like the work we had, E la, our name was E la Carte, right? And it was kind of not easy to spell. And, and you know, we had the product name Presto, but the company name was E la Carte and we're like, Presto is just much better name. It's easier to spell, it's easier to say it means Fast, it's a great name, right? And it has magic, you know, magical undertones. And so very early on I was trying to acquire presto.com and you know, It turned out there was a venture-backed company by, from Kleiner Perkins called Presto. And I dunno if you know this, it was Joe Beninato who actually lives near us, I think in Los Altos, Wayne. And so, you know, this company, what they did was they, they developed printers that you could, that you could send emails to, and they would print the emails out and, and this was like meant for older people who didn't email.
Wayne Crosby:
- I remember this. Yeah. Yes. Older people that don't read emails, right?
Immad Akhund:
- What, they would, they would mail you the printed email?
Raj Suri:
- No, no, no. Basically you would buy this printer for your like elderly parents.
Immad Akhund:
- Oh, I see, I see, I see.
Raj Suri:
- And then you would email them like kids pictures and like, they would like.
Immad Akhund:
- I hope it was great at spam.
Raj Suri:
- Yeah, yeah. And so it, it, I'm like, this company is not gonna survive. This is like, has to, you know, everyone's gonna be using email, you know, at some point. So what, what, you know, like the people who are using this product are gonna die off, right? Like, it's not gonna, this company can't survive. So I, I kept bugging the owners to buy the company and, and their revenue was going down like every year, right? So it was like just cash flowing out. The venture capitalists had totally given up on it. And I kept bugging them year after year, you know, to, to buy the domain. You know, they're like, no, no, we're a functioning business. We need this domain. It's very important. And then I think like five or six years after bugging them, you know, they finally were like, you know, we're going outta business, you know, and you know, now we're ready to sell the domain. And it turned out by a sheer happenstance, you know, their, they knew everything about us because their office was in the same building as ours in Redwood City for all these years. And I, and they didn't even know about it, right? Like, they were watching us, you know, basically in the, they were like, we were in the second floor. They were on the first floor. They didn't have like a funny, you know, like a, like any kind of marquee or any kind of sign that there were, there were Presto. And we were like, you know, trying to buy the domain from them. And the deal got done at $150k, which I think is pretty reasonable.
Immad Akhund:
- That's great. Yeah. That's a great deal.
Raj Suri:
- Yeah. Yeah. And so it was a great domain. I mean, I think it, I think that the name is actually still really good for a tech company.
Immad Akhund:
- I was wondering when I started Mercury, which was I guess 2017, where the domains didn't matter anymore, but I feel like weirdly they matter even more than they've had it, even the, like in the world of apps, like there's just some level of trust you get, but the.com, that just doesn't exist in if you don't have it.
Wayne Crosby:
- I think so. I mean, I see a lot of the, you know, the, the .ais are certainly popular these days and I think, you know, those are starting to get a foothold in terms of, of credibility as well. That's, and then Zoom also did, they made .us kind of more of a, a normal thing as well. But like, that's about it.
Immad Akhund:
- They're on the .com too.
Wayne Crosby:
- Yeah, that's right.
Immad Akhund:
- I want to come back to the, the Google thing, Wayne, I think you have an interesting perspective on this. Like, one thing that, you know, I always worry about with Mercury is, you know, as you get successful, you stop being innovative and you stop like launching new things. And you know, when you first joined Google, it was still very innovative, right? Like they were, they hadn't even launched Google Suite yet. And I didn't even, I can't remember if Google Maps was successful yet, but you know, that was like kind of the heyday of them doing new things and like really changing the world. Whereas like, probably towards the end, I mean, I know you worked in ai, but they basically, like, they invented transformers, but then completely missed LLMs or ChatGPT at least. So what's your take on, you know, why, what was the change in culture? What happened that like led from like a very innovative company to like someone that like, you know, still was making money obviously, but was not innovating anymore?
Wayne Crosby:
- Oh my God, I think it's like classic innovator's dilemma. I think there's a lot of really, really smart people at Google. It's still a great company, but you know, for the longest time they had this cash cow that was just like an ATM machine that was spitting out thousand dollar bills every, you know, microsecond. And it's really scary to like try and disrupt that. They, the, I think it's, you know, I, I don't know, have any insider information. This is, this is somewhat speculation and kind of just as you look at it from a macro sense, if you have a way to monetize and, and it's like the most efficient business model ever created, it's really difficult to innovate on top of that and be like, okay, I'm gonna throw that away. I'm gonna try and do something new. And until you can actually figure out how to monetize at that scale, it's just like, is not a good business bet. Whereas like, you know, ChatGPT comes along and they're like, yeah, we don't have really any revenue, so everything is better than nothing. And, and now all of a sudden they force Google's hand in order to be able to do something with this and, and sacrifice a little bit of their, their business. And now they're, they're like, they're, they are being creative in terms of how they're going after funding it and like trying to, to create revenue from it and whatnot. It's, it's almost quintessential innovator's dilemma. They just got stuck with the business that was working so well that they, they didn't wanna cannibalize it.
Raj Suri:
- What do you guys think about Google's search product and the revenue? I mean, like, there's a lot of talk about people switching to perplexity and ChatGPT for search. I, I agree with this like view, like I don't see how Google's search product will compete. Like a search is kind of done, right? Like everything is gonna be through AI type.
Immad Akhund:
- I mean they can, they can compete by adding AI, right? Like, I mean, at the top of my Google search there’s AI now.
Raj Suri:
- Don't compete, but like that's gonna be diluted, right? Like, it's gonna be like 10 different sites versus like one.
Immad Akhund:
- Well, maybe, I think I still go to Google if I want answers to certain types of things. Actually, I think the, I guess I haven't become a perplexity user and maybe that's me. I, I have, you know, I go to ChatGPT for things that are hard to monetize anyway. I'm like, you know, what's the, what's the time light would take to travel for me to like Alpha Centuria or something? Like I'll go to ChatGPT for that. But if I want to go like things that are more monetizable, I like, you know, I wanna buy like a baby crib or something, I'll go to Google probably still.
Raj Suri:
- Or do an experiment like switch your default browser perplexity to perplexity. You know, just try it out. Try it out for a week. You won't wanna go back.
Immad Akhund:
- I think the bit that is very disruptive to Wayne's point is like the blue links were out of control at Google, right? Yeah. Like, I remember when it was first like introduced, it was like, Hey, we wanna be very respectful of users. We're gonna make it super obvious that it's sponsored. And then it became less and less obvious that it's sponsored. And now it's like you can be like two page folds in before you get to real content. It's just ads, ads, ads, ads. And you can tell like, you know, the CFO was like basically cranking the wheel. It's like, okay, what if it's 10% more ads? What if it's 20% more ads like every single year? I think that is the bit that like kind of collapses against this competition.
Wayne Crosby:
- You know, I know that like for the longest time, certainly while I was at Google there, they, it was like very respectful in terms of like, what is the lifetime value? Because you know, obviously if you start putting there, there was like this kind of funny experiment that we, that was run internally, no users ever saw this, but it was like, you know, if you, if you just like add, you know, sexy to the end of any search term, your like click boosts go way up, right? For your, for your, you know, for your ranking and whatnot and where people actually click and you can actually drive revenue. But like people get really tired of that really fast. And so like, you, you kill your lifetime value of your user and, but you can squeeze that, that lemon, so to speak, for, for a short amount of time in, in terms of boosting. And, and honestly, it, it feels a little bit like we're in that phase of like, okay, we don't see like the long term path here, so let's go ahead and start squeezing this lemon a little bit more and a little bit more and a little bit more knowing that like, the lifetime value of that, that user is probably declining, you know...
Immad Akhund:
- But to some extent it was also because like all the competition was crushed, right? Like there was, before Perplexity, there was no, no one else. So like you, you know, there was no reason to not make the experience worse because your lifetime value was like kind of locked in.
Wayne Crosby:
- Yeah, yeah, absolutely. I think it's, it's super interesting. I I love the, I love the dynamics that are emerging, like the, it's definitely a, a time to like shake up some of the, the existing sacred cows in the room and, and see what actually falls out. I think there's gonna be some, some giant opportunities. You know, I met a, a very unexpected AI user recently. It was my mom, you know, she was, she's like, I love using Bing. You know, I'm like, that was a very unexpected statement to hear, you know, Bing tells me so many interesting things. And she know, it turns out she was using basically ChatGPT on, on Bing, right? But, but like, she loves it because of the interface of the AI interface. And she know, you know, my mom is not super tech savvy, but actually she's, she has a ton of followers on like Twitter and follow. 'cause she tweets out these spiritual things. So like, and so it was just very interesting to, to hear her say that. I just, I don't know what's happening to Google's revenue right now. I maybe hasn't made a big impact so far.
Immad Akhund:
- It's actually still growing. It's not, it's...
Wayne Crosby:
- They're doing great. They just like crushed their earnings last quarter, right? Yeah. Like it's, it's, but they're, they're, they're diversifying and that's coming from lots of different places, right? They're starting to grow.
Raj Suri:
- Yeah. YouTube I think is still a juggernaut, right? You know?
Wayne Crosby:
- That's right.
Raj Suri:
- Yeah. But, you know, search is their cash cow. I can't, I mean, you guys should try, try like switching your search engine to perplexity and we'll see actually what happens under the Trump administration now with this like, antitrust thing that Google's been hit over. Maybe that saves them, you know, like, you know, if they don't have to like break up the company or any kind of, you know, pay any penalties, which probably will happen, I would think. But you know, you don't know for sure.
Immad Akhund:
- I mean, it's interesting. I think the, the previous administration has been quite anti-big tech. It's actually not clear to me whether like Trump and Vance are gonna be pro big tech. I think they seem like pro tech a little bit more pro-tech, but I actually think they're like still probably gonna pursue some of these like anti-big tech things. Like, Google's still seen as like a bit of a woke company and you know, there was all this whole like Nazis in black Nazi thing and all this kinda stuff. So I feel like there's still like a little bit of anti-big tech sentiment in both bodies. Yeah. So I don't necessarily think there's gonna be a pullback on that.
Raj Suri:
- We'll see. We'll see. Let's talk about that actually. Let's talk about election. How's it gonna affect tech?
Wayne Crosby:
- So, so what do you think? Is it, is it actually gonna change the startup scene? Is it gonna change the, the landscape at all?
Raj Suri:
- I think it's gonna have a big impact. Honestly, my my view is like, it's gonna, you know, I was with a bunch of founders yesterday. I would say, you know, the mo the mood was really funny, right? The mood was like, you know, I'm, I'm sad that, you know, 'cause I voted for Kamala, you know, 80% of, I think San Francisco voted for Kamala, right?
Immad Akhund:
- I think it's more than 80% of SF, it's 80% of California. SF is presumably...
Raj Suri:
- California's not all in yet, but SF is like, you know.
Immad Akhund:
- Oh, I see.
Raj Suri:
- It's 80% what I saw. And, but all these founders were like, oh, I'm so upset because I voted for Kamala; I'm not really that upset 'cause my stock portfolio is doing so well and like, you know, you know, the markets were way up yesterday and, and, and like, I'm gonna make a lot more money. And I talk, I was talking to a FinTech founder yesterday who's like, you know, you know, I, I, I was, you know, in this current administration, I was like really torn because, you know, I had one side telling me, you know, one political party telling me, hey, my FinTech product is great for consumers. And on the other side I had like the CFPB telling me my product was unconstitutional. And like, you know, he was like, this is, this is really good for me. You know, and there's a lot of people who are I think in regulated industries, biotech, FinTech, you know, many others crypto, right. That are, that are...
Immad Akhund:
- And crypto is having a bonanza right now. Coinbase is up 40%.
Raj Suri:
- 40%. That's crazy. It's crazy, right?
Immad Akhund:
- Yeah.
Wayne Crosby:
- That shows you what impact...
Immad Akhund:
- I mean I think, you know, I think they've tried to underplay it in 2024, but the Biden administration was very anti crypto, right? There was a ton of de platforming against crypto. There's the SEC was after everything in crypto. So I think that is the most direct impact is gonna be with crypto. And I think that's why dosing a boom. But yeah, I think everyone in regulated industries is like kind of taking a sigh just because yeah, Republicans always anti-regulation, but Trump in some ways more so. But yeah, I don't think big tech is just, is gonna be like, I don't think necessarily big tech M&A is gonna come back or, or like this kind of anti-big tech like judicial stuff is gonna go away.
Wayne Crosby:
- TikTok, I mean, it's gonna be really interesting because it's looking like there's gonna be no guardrails, right? It's like he's in, you got congress, you've got the judiciary, you've the executive, you've got everyone. Yeah. You've got no guard rail. Wait two years?
Raj Suri:
- No, not longer than that, but two years. Yeah. Well that can be done in two years, right?
Wayne Crosby:
- So it's gonna be a wild couple of years in order to see like what actually transpires here.
Immad Akhund:
- Is there actually a limit on how many bills that can be passed in two years?
Raj Suri:
- It's a, it's more of like a practical limit versus like a theoretical limit, right? It's, you know, both Obama and Trump in previous times would've had full control. They only got one thing done, right? And Obama had even more like power, you know, he had 60 senators, so there was no filibuster and he only got Obamacare done and, and Trump last time got the tax bill done, right? So history tells us like, you can get one big thing Bill passed, right? But you can get a lot of stuff done around the margins, like around, you know, executive orders and things like that. But it turns out you can't do that much because what happens is you make an executive order, you know, someone sues you, right? And like stops it, like in the courts, that's what's gonna happen for the next like, you know, few years, there's gonna be a lot of like lawsuits back and forth, right? And some things will get approved by the Supreme Court, but it'll take a while before it even gets to the Supreme Court, right? So like, it's not that fast.
Wayne Crosby:
- That's so, so different than pre-election. Like what a different world we're living in all these lawsuits that take forever and there's just like gonna, nothing basically gets done. Yeah. I think there's a, there's a lot of...
Immad Akhund:
- I mean it's a feature of this, it's a feature of the system that like, it's supposed to operate slowly so that you don't, you don't get like someone new that suddenly changes all the, all the rules and laws. Yeah.
Raj Suri:
- I mean you basically need full alignment between all three branches of government. But the thing is like by the time you only have two years, so by the time you even guess to, to Supreme Court, it's like the government may have changed, right? So like, that's why it's hard to get anything done, you know? Yeah. So it, it's, it's a really, it's the way the system works. And then, and...
Immad Akhund:
- I guess I'd be interested in your take on this. What do you think is like the, the best thing that like could happen in the next two years because of Trump and the new administration and what's the worst thing that you think could happen in the next two years?
Wayne Crosby:
- I actually have zero issues with a lot of the Republican, not zero, but like, I grew up basically a Republican in Arizona and everything else like that. And then kind of moved to more an independent, and now I'm pretty centrist at this point. So like, there's a lot of things that the, the, the republican policies that I, I look at and I go like, yeah, these are, these are like reasonable things. And then on the social issues, I completely disagree. And so like, I think the, honestly the thing that I'm, I'm most worried about is I think like on the economy, all of that stuff, it's gonna be fine. They're, they're like put in together mostly reasonable policies and yeah, there's, there's gonna be some issues around environmental stuff that we're gonna have to clean up and fix and whatnot. But this is kinda like ebbs and flows over time. I do think a lot of damage can be done on the social side. I think like we've got a bunch of issues that are, that are, we, were making a ton of progress in terms of LGBTQA rights and whatnot. And I think like those are gonna get set back a little bit unfortunately, and we're gonna have to claw our way back. I think that like there's, I, so I suspect like the biggest damage that's actually gonna happen is, is more on the social side. I think there's a lot of stuff around abortion that could end up in women's rights that ends up getting kind of really muddied over the next couple years. That's gonna take a long time to unwind. So I think that's, those are my biggest fears. There's actually not on the economy side, it's more on the social side and then on the, on the economy side, like you're already seeing it and people are like, cool, less regulation, let's go. Right? The economy's booming let's they, and some of this is a self-fulfilling prophecy, but that's okay, right? Like if it, if it makes,
Immad Akhund:
- All right. So on the social side, that's your biggest concern. What's your, I guess biggest like, you know, optimistic kind of case?
Raj Suri:
- The economy.
Wayne Crosby:
- The economy.
Immad Akhund:
- I do think, like, the thing that is interesting to me, which I don't know if they will pull off, is, you know, I feel like both parties have just been on this like spending tear, right? Like they're just like spending more and more money. I think last year we spent like 9% of gdp in, in debt or something. It's insane. Yeah. I just feel like there's more of a chance with like kind Elon Musk and if, if we allowed to like go do government efficiency, there's like, you know, potentially like an path there. But I don't know, I mean, Trump hasn't previously not spent money, like tax cuts are also spending money, but there's maybe a chance that we could like try to like reverse that tide a little.
Raj Suri:
- You know, I think what happened in the last Trump administration, like he threw a lot of crap at the wall, right? And some of it stuck and some of it didn't. And I think that was actually intentional. Like they just did a random bunch of random stuff, right? Like they put tariffs on everyone and then they've just focused on China right. Later on. And there was actually wide agreement that that was a good thing, right? The China stuff.
Immad Akhund:
- Yeah. And they stuck with it after.
Raj Suri:
- Yeah. And they stuck with it after. Exactly. Right. Biden hasn't reversed actually a lot of the Trump policies, right? So, and, and you know, I think the same will happen this time. There's gonna do a lot of random stuff. Some of it will think is crazy, right? But, you know, there's some of, it'll be like, and some of it will get world back, but some of it will stick. And so it's kind of like this, like mass experimentation in the government side.
Immad Akhund:
- Yeah. I think the biggest downside that I, I worry about, I feel like a lot of social issues, like the states kind of yeah. Determine those rather than federal. But I do worry about deportations. Like I think there's, that could like hurt a lot of people if there is like any attempt at mass deportation. I don't know what the right answer is. Like, I don't think, like, I don't think it's great to have a ton of open borders and illegal immigrants, but, but also trying to deport, like, I think we are like at 30 million as a count of illegal immigrants, like trying to deport 30 million people. Some of them have been here for like decades is gonna be.
Raj Suri:
- It's not gonna happen. I, I, I don't think, I mean, they'll, they'll like deport a few criminals, make a, like a, make like a big scene about it and they'll stop.
Immad Akhund:
- I mean, I hope, but I think that's the worst case, right? Yeah. 'cause the stated policy is to do mass deportation.
Raj Suri:
- I, I don't, I mean, Trump's rhetoric is very different from actually what he ends up doing. Remember last time, like he went into power winning over Hillary. She's like, he's like, lock her up. He's like, you know, you know, he had a lot of dark things at that time as well. A lot of, but he didn't end up doing most of it right? Like he ended up like, you know, he is, you know, his bark is worth, but that's a lot of it.
Wayne Crosby:
- Yeah. A lot of that was because he had the, the some, some guardrails in place, right? Like you've got a lot of his, his people who have worked with him previously being like this, he is not fit. And now you've got, you know, like he's gonna make different decisions now where, where there aren't gonna be those guardrails in place that like prevents some of that action.
Immad Akhund:
- We'll see. Well he still has a reasonable number of smart people around him.
Raj Suri:
- He does.
Wayne Crosby:
- Oh, absolutely.
Immad Akhund:
- Like, I don't, I don't think most of those people would support...
Raj Suri:
- It's different people. It's not like institutionalist, it's gonna be more like, you know, tear it all down type of people. They're smart, but they're still like, they have an incentive to like be more radical than like the people before, but it's still unclear what they can actually get done within the confines of the law. Right. That the, the thing that really worried me was like when they said like, who's gonna enforce the law if like we control the army like that, you know, that is like, that's the most concerning with like JD Vance like talks about that hope. It doesn't get to that point. Like the thing is, I, I think the American people like would stand up to someone who does anything crazy and like, if you remember like there were mass protests right last time when things, crazy things did happen. And you know, Trump ultimately I think will be, you know, swayed by that, right? Like he wants to be loved, you know, he, he's, he has a desperate need to be loved, right? So, you know, I don't think he's gonna want to do, he's not, he's not an ideologue or like someone who is like willing to risk at all, you know, to, to achieve like a certain ideology.
Wayne Crosby:
- Yeah. I don't know. I might disagree with that, but that's all right. I think, I think, you know, the, the, the, it is gonna be a little, it's gonna be more radical four years or at least two years while we kind of like make our way through this journey. Definitely. But I think you're also right that like there will be some, some stuff that comes out of the, that at the end of the day is that we'll continue to, to do as a, because it's, it actually works, right? And there'll be some stuff that like, just needs to be completely reworked at the end of it.
Immad Akhund:
- As a very Silicon Valley type concern, which is, you know, if we reach AGI in the next like four years and that radically needs kind of government intervention or government involvement is like how would this administration kind of be involved and would it be in a positive way? Yeah, there's, I guess a lot of ifs there. But what what's your take on that, Wayne?
Wayne Crosby:
- Well, I mean, I think this is an interesting one because I mean, when you, I I hadn't really thought through all of like the worst things that are happening. 'cause like as we've had this conversation, I can think of a lot more worse. But one of the things that, that is like not unreasonable is that there's two more Supreme Court justices that get put on here on onto the court in the next four years, right? And so then you're looking at like five fairly young Supreme Court justices that, that are gonna have to be ruling in this time when a GI is coming into existence in terms of like, how to think about like what are the rights of this thing? The federal courts are just,
Immad Akhund:
- You mean young as in like in terms of age or young as in new to the court?
Wayne Crosby:
- Young and mostly, I mean both, but like the, the, the bias towards younger judges so that they sit on the court longer, but they will also be on the court less.
Immad Akhund:
- I mean, isn't that a good thing or are they more likely to understand technology and anxiety?
Wayne Crosby:
- I think so. I think it just depends on like where the slant is in terms of like where the I ideology is, right? And whether or not they wanna embrace the technology or, or really fight hard against it. You're gonna see like the federal courts get, get stock full with judges as well, right? Because it all of the, the approvals process can just like sail through. So, so I think you're gonna like, you're going to end up with a very right-leaning court system that's gonna be ruling on these decisions in terms of like what are the policies associated with, with AGI, I don't know if it's a good or a bad thing yet. Like we, we will see how this continues to, to unfold.
Immad Akhund:
- I guess the general emphasis on deregulation, it probably means we get more AI acceleration, not less. Like, I mean I think that was one of the main potential impediments to like AI progresses like regulation, right?
Wayne Crosby:
- I think so. I also think that like there's, there is a happy medium between like the M&A market and like where we are today, right? Like the, the big bullies of like buying everybody up and, and what you're concerned about with the, you know, the FTC and whatnot and monopolistic behaviors and, and like a healthy ecosystem of companies wanting to like, innovate and build and then, and then find a, a place where they can scale and grow inside of larger organizations. And so I think, you know, a little deregulation on that would also, you know, it's, it's probably a good thing for the overall ecosystem.
Raj Suri:
- I think one thing I'm concerned about, I would say with Trump is like what happens with in foreign policy, right? We, you know, we don't really talk about it much here, but you know, he's supposed to end the Ukraine war imminently, so, you know, let's see what happens there, right? But it, it, it could embolden, you know, enemies or it could, he could actually solve the problem, you know, he is unpredictable. So I think, I mean I think
Immad Akhund:
- Generally he was being better. Well the Democratic party and the Republican party were both fairly newer cons, right? Like there was a lot of war in the last 24 ish years. I feel like Trump is actually kind of anti-war. Like at least in that one, I would say he's much more likely to be better at like peace than.
Raj Suri:
- Yeah, you can be anti-war if you want, but if other people wanna start wars, you can't be anti-war. You have to have to fight the wars. So, you know, it's like, you know, the US as a nation has been anti-war in the first like half of the 20th century, but didn't mean that we have to, we could avoid wars. So we had to fight.
Immad Akhund:
- I mean, I don't think the US has been anti-war since 2001. Yeah. But the US has created a lot of wars.
Raj Suri:
- Yeah I'm saying 1900 to like 1950. The US was very reluctant to get into any wars, right? Like they're very isolationist country, but like the wars found us, right? And you could argue that if we didn't, like if we, the reason the policies that we have today were because of those world wars and, and because the wars found us and we're like, Hey, we can't let the wars get to that point before, like we get involved. Right. So that is the real risk of like, the wars getting to a point. You know, we just basically stay back, let the wars happen, let whatever happen, you know, in the world. And then it gets to a point that we have to be involved anyways, and it's much worse at that time.
Immad Akhund:
- Yeah. But I think this idea of the US being like the world police, which has been around since like, I guess 1990 is, is just an idea that can't stick anymore. Like, there's just too many other, like we are not in a unipolar world anymore.
Wayne Crosby:
- I totally, completely agree with that. We gotta, we gotta like stop sticking our nose in everybody else's business and you know, pull it back home a little bit. There's gonna be stuff that happens all over the world that we aren't necessarily responsible for. We gotta just like, let some of that go. I don't know. I think, I'm not speaking about Ukraine specifically, or, or like, I, I am a big believer in, you know, nation rights and if you like, if, if nations are getting, you know, if the borders are being, you know, attacked, you have an absolute right to defend yourself. And if, you know, we want be an arms dealer in some of that stuff, maybe that makes sense. But like, we shouldn't be getting involved in this beyond that, in my opinion. But I'm…
Immad Akhund:
-I think Raj disagrees.
Wayne Crosby:
- I'm a Silicon Valley founder. What do I know, right? Like, this is...
Immad Akhund:
- We've gone way outside here.
Raj Suri:
- I just wanna make that comment because I, you know, on the record, let's see what happens on the geo, that's actually, to me, the biggest risk of Trump.
Immad Akhund:
- I mean, I guess to tie it back to tech, I do think there's gonna be a complete and massive boom in defense tech startups in the next four years. I mean, that's already started with, and oral, but combination of drones and AI means there's like a big technology disruption and then a big change in kind of the need for innovation. And I think the government is also supportive of like, kind of startups in this space. So I, there was a YC company actually in the last batch, Aries Manufacturing, which was the first kind of the building, like mini defensive cruise missiles for naval ships.
Raj Suri:
- I, I saw a tweet from Elon like replying to Palmer Lucky's like, yeah, we're gonna get you some better contracts and like, figure out like how we're going to, you know, help boost your company. It's kind of...
Immad Akhund:
- Wow, Elon's already striking deals?
Raj Suri:
- He's striking deals already. Yeah. What do you think Elon's gonna, I mean like, he owns impact in the government, like a, first of all, can you, can you actually keep peace with Trump for that long?
Immad Akhund:
- Well Raj, you were quite, you were quite skeptical about whether Elon swayed or helped sway this...
Raj Suri:
- Oh, for sure.
Immad Akhund:
- ...election. Like I feel like it's very clear that he was quite a pivotal part of swaying the election. But you don't think so?
Raj Suri:
- No, no, I don't think so. It's too broad. It's too broad a change. If like Trump like just won Pennsylvania or like one other state, I would've probably, maybe Elon did make the difference, but Trump won very convincingly and I didn't, you know, exit polls are very clear that people were just unhappy with rising prices, you know, under the Biden administration. It's very obvious they didn't find anything. Kamala's plan, like it's gonna solve the problem and people just have better memories of the Trump four years than they do over the last four years. So they just have a very simple...
Wayne Crosby:
- I think that's recency bias more than anything. Like people forget, right? Yeah. Like there's a lot of recency bias. Recency bias.
Raj Suri:
- Yeah. There's a lot of recency bias. Yeah. And yeah, people just want, you know, have a better memory of four years ago, but, which is true for everyone. People still have like a better memory of George W. Bush now than they did, you know, when he was in office. You know, he left office at 20. Yeah. And they used to hit him back then. Yeah. People just forget how much they hit these people. And by the way, same with Hillary Clinton. You know, when Hillary Clinton like, was like, her approval rating was low, but when she left, like her approval rating went up. You know, like it's, it's just the way that, you know, human psyches
Wayne Crosby:
- Psychology of this is super interesting. Humans are fickle.
Immad Akhund:
- Well it's actually like a healthy thing that you don't remember the negative things as much. It's actually like if you find someone who is too focused on like remembering the bad things in their past, they tend to be actually be quite unhealthy. It's much better to just remember positive things and like try to forget the bad stuff because otherwise life is hard. Maybe this is a good note to, to end on. I feel like we could keep chatting for a long time, but this is really fun. Thanks for joining Wayne.
Wayne Crosby:
- Of course. Great being here. Thank you both.
Raj Suri:
- Thanks everyone for listening. You can find us on all the regular podcast channels. Join our Tribe group and see you next time.
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