Rick Heitzmann: Why 2025 is the Year of Generative AI Adoption and Innovation
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All right. Welcome to the Risk Reversal Podcast. I'm Dan Nathan, joined by my good friend Rick Heitzman. He is the founder, CEO of Firstmark Capital here in New York. Rick? How's it going, Dan? I'm excited to be back. This is so weird. We do this all the time because we talk every day, probably multiple times a day. And when you put a mic and a camera in front of us, it feels a little different here. We've got

Three things we want to do today here. This is the new look risk reversal pod. We are trying to be very, very efficient. Three things in 30 minutes. And here's what we're going to do. Generative AI, CapEx spending. Love to get your take as you're seeing it from your portfolio companies, but also what's going on in the public markets, how your companies are actually using that compute, right? And all the hard work.

hundreds of billions of dollars of spend over the last two to three years. I also want to talk a little bit about market cap accrual, how we've seen that in the public markets, but also what we're seeing in the private markets and where you see it going next, right? And then the last thing, you and I have to talk about this, what does the IPO backlog look like? And are we going to see some more strategic M&A? But first things first, you

Your birds. I was going to say. I was going to say. Where was that coming in? I thought that was coming in first. How do we not do that? We just got to get to the agenda first. Philadelphia Eagles. Yeah, I know. That's great. Fantastic. Good for you guys. I think everybody oddly was rooting for the Eagles, and that's not something-

everybody's rooting for the Philadelphia team. Yeah, who was, somebody sent this picture. It was basically the loneliest gate in the airport down there in New Orleans. It was Monday morning and it was to Kansas City and I thought that was amazing and everyone just kind of had their heads down. Going from Philadelphia, no one likes us, no one likes us, we don't care. Everyone hates you. It's not even liking, it's hate. And now everyone loves us.

All right, let's do this thing. I think over the last few weeks, the deep seek sort of data that came out or whatever you want to call it, it kind of sent at least people in the public markets kind of running for the hills a little bit, especially if you were an investor in NVIDIA. NVIDIA was obviously one of the very few ways

pure play to kind of express yourself in the public markets in general of AI. But also we saw, you know, the hyperscalers and we just saw the kind of build out that they have done over the last few years. It's hundreds of billions of dollars, right? And so one of the most interesting things, Rick, that happened to me in the public markets, actually not to me, but that I took away from the earnings that we had in Q4 was that when Microsoft, when

Google when Amazon issued their CapEx for 2025, investors sold those stocks. Okay. Expectations were high. What does that kind of mean to you? Because DeepSeek makes a whole host of different things for a lot of players in the space. But what does that change in sentiment from investors in the public market mean to you?

Well, there's probably three things. I mean, the hyperscalers are going to continue to spend slash overspend on CapEx, right? If you even look at not only the Amazons, Googles of the world, but if you hear about what X is spending, when some of the private companies, the hyperscale private companies are spending at NVIDIA, it's unbelievable because they can't afford to miss it. So they're going to continue to spend through 25. They'll give guidance that they're going to spend whatever they can to not miss it.

it. On the flip side, a lot of the companies in the private markets can't afford that type of CapEx. You can't play at the same table as Microsoft, as an Amazon, as a Google. So therefore, what do you do? And what you do is kind of what DeepSeek did. So how do you play a different game? How do you leverage open source? How do you leverage someone else's infrastructure? And I don't believe they spent what they spend on their model. So it's not a $5.5, $6.5 million model. Sure.

But it's also not a multibillion-dollar model if you think about comparing them to OpenAI. And what that means is that people are moving faster towards the application level and really spending more time and energy on open source. So they don't have to develop their own LLMs, and they're able to create value on the application level, which is a lot more capital efficient.

Yeah, so it's interesting that you mentioned the open source. And Meta was a stock that went much higher after its earnings and grinded higher. I think at one point it was up 17 days in a row, and that included that kind of earnings period. And I think your point about an open source model that they've been building, but they're not one of the ones who built out a public cloud.

They haven't built this infrastructure to kind of rent that compute out. And so they're just using it, obviously, for their own means. And they benefited from that. They've seen earnings growth. They've seen margin improvement from their ability to sell or target better ads and the like here. And we're going to talk about Pinterest in a second because I know this is one that's near and dear to your heart for a lot of those same reasons. But I want to talk about valuations for a second here because if you look at Microsoft, if you look at Google, even Amazon –

Obviously, meta too. The valuations in the public markets seem reasonable. If you think they're going to get the sort of return that many of the bulls, whether they be investors, whether it be the street, think that they're going to get on this spend. But in the private markets, you just mentioned open AI. There's anthropic.

There's Cohere. There's XAI. These valuations seem massively unsustainable. So how do you kind of meet in the middle here? Because there's a pocket of risk in the private markets that I don't know how they get to the public markets with those valuations. I think that's the key concern.

Some of those, the hyperscalers have such good earnings, they're generating so much cash that they don't have to be perfect on the return on investment, but the cost of capital is so low that they're playing, a lot of that spend is even playing defense as opposed to offense. So maybe they're not going to get a great return on spend, but a decent return on spend, especially when they're playing defense, especially someone like Google who has so much to lose on the search side. On the private markets, your cost of capital is much higher.

So it's much harder to get a return on that, especially if you're using that spend to develop large language models, LLMs, that are proprietary. And even Meta, with all their scale, is really going towards the open source models and making those available. So how are you going to compete if you're an LLM in the private markets at huge valuations that are incredibly capital consumptive?

and make that work. And that's the real issue. And I saw a great meme the other day of, remember, Search in 1998. Yahoo, AOL, Infoseek, Intimi, Dogpile, all these. Lycos, Excite.com. All the, you know, had a dozen logos that anyone under 40 wouldn't recognize all but maybe one or two. And maybe that's where we are today, where even the companies that might wind up being losers are

are going all in because they have no choice, but they might not get to the other side. Yeah. It's interesting though, on the valuation front, because, you know, you and I've talked about this open AI is trying to raise it maybe 260, $300 billion. Right. And again, I think they have, you know, 11 million paying chat GPT users, and that could be from 20 to $200, you know, so we don't know, but the revenues are kind of minuscule too. They have billions of dollars in revenue, but the, the,

given to where their valuation is, the multiple is still incredible. Yeah. And so then it brings me back to the public markets though. Meta is an interesting example where obviously this is a company that has 80% gross margins, but the growth is really decelerated, right? So the idea that you have low, like double digit sort of earnings growth, I think about 12% and sales growth, 15%. And obviously the improvement in that margin, you can't do much more when you're at 80%, right? Your ad

Your upload's high, your ARPU's high, especially when you look at it geographically, that where they don't get a high ARPU, it's where you can't really sell a lot of ads in a lot of the non-Western world. And everybody has Instagram. Anyone who ever wanted Instagram has Instagram. If you don't, you have WhatsApp. WhatsApp doesn't monetize.

No one besides my mom, I think, is on Facebook anymore. So they keep pushing that on you whenever you're on Instagram or on Reels or on WhatsApp or whatever, and no one's using it. So I guess the point is this one actually seems a little bit more dangerous to me, and we'll walk through the Google example in a second. How about your Metaglasses, though?

I love them, but that doesn't move. You have them. You don't even – it's not going to move. I wear them. I have them with me. Yeah. No, I think they're pretty cool. But like I look at this thing at about 29 times this year's earnings and about 25 times next, about 10 times sales this year, 8.5 next. And then I flash forward or I go back towards a Google and I say to myself, similar expected earnings and sales growth. They have totaled.

so much room for margin improvement, like 63% gross margins, which saw a downtick over the last few years because of the spend. So my question to you is like- But there's more downside in Google if you think about search substitution. So that's the bear case there. If you talk to, I talked to my 20-year-old son and he doesn't use Google anymore. He uses ChatGPT. And you're seeing a fundamental shift that Google's not going to get any more sharing search than they had maybe two years ago. And

But if that gets widowed away in such a cash machine, that's where the market is. So I guess what you're suggesting is that if you go back to the year 2000, you had already told us in 98 Google wasn't even part of that. I remember you remember when all of a sudden people stopped using Yahoo search and they started using this new thing, Google. So to make the bet right now that OpenAI –

whether chat GPT is going to have this user interface is going to create this sort of behavior. It's going to become a verb, you know, and it's going to displace, you know, Google that's I'm, I'm hard pressed to think that happens. And I'll tell you why, because if you love meta and you love the fact that a third of the planet has a

you know, Instagram or Facebook or something like that. Well, look at Google. They have seven properties with over a billion users. They have three or four of those with over 2 billion users. If they're able to get Gemini right and they're basically able to do the same things that Meta's been able to do, serve better ads, infuse it across YouTube and, and,

Well, they've got incredible data from YouTube, incredible data, incredible personalization data from you. Well, think about OpenAI was trained on YouTube data for the most part and Google searches. You know what I mean? So they have the best data. They have the best personalization data if they know about you from your logged in experiences. And they have infinite capital to invest behind tying those things together. So I'm not betting against Google. What you're saying is if someone chips away at that market share for their cash cow and

That's part of what factors into that valuation of, hey, there is a potential downside. There is a potential Achilles heel there. Yeah, except that I look at Google Cloud as something that is really differentiated from what Meta has. And I know we just did a would you rather sort of here. But I think the opportunity for actually to get Gemini right, to infuse it across...

all their suites of services to maintain a certain level of that moat, raise those margins. Even if they got back to like 70% gross margin, this becomes a very profitable company. And I'm looking at it, 14% earnings growth, mid-teens expected sales growth, both this year and the next, trading at 20 times this year, 18 times next. This is the value play in Gen AI in the public markets, in my opinion. I think that makes sense. It depends on, are you going to be able to see adoption of AI? So this is,

As we talked about before, 2025 is going to be really a year where you have to see that adoption. Are you going to be able to see the beginning of that return on investment, either on the chip side, the infrastructure side, or you're just pushing out the application layer? And if no one's picking up, if Apple intelligence is something that people are turning off, if people are not using Meta AI, but people are using Gemini or people are switching to chat GPT,

are going to start seeing value and they're going to pick their horse. And that's when the real value is going to shift. Yeah. And I think your point about Apple is a good one. I mean, they have a lot of room to improve as far as Apple intelligence. I mean, they keep updating and there's not any, you know, too many useful sort of things. But I go back to that kind of behavior. You know, if you're a user of a lot of Google products and you have them all open on your iPhone, you know, you're going to be using Gemini a lot through the application.

layer of your thing, not even Google intelligence or Apple intelligence, but we'll see about that.

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I want to hit something else I think is really interesting because we already talked about where the market cap has been accrued. And I want to give you some data about some performance in some of the areas in the stock market. So if the hyperscalers have basically probably in the near term topped out as far as interest in the names from the public markets, you've had plenty of time to invest in a lot of those names. And then if you think about NVIDIA has just run away in the chip space. They have 85% market share of

of high-end GPUs. We don't have to make this about NVIDIA. I think almost a more interesting sort of play right now would be Broadcom and Marvell, who are going to be contracting, if not already, with all of those huge customers of NVIDIA to make custom chips, right, as they get more specialized. All right. So right now, a lot of stuff just joined the party in 2025. That's either this is going to be a massive broadening out or we're late stage in this kind of first cycle. Infrastructure software.

Okay, year-to-date, Twilio is up 32%, MagnoDB is up 24%, Okta is up 24%, and Snowflake is up 21%. Security, Cloudflare up 60%, CrowdStrike up 28%, Consumer Internet, Meta, we just talked about, up 24%, your Pinterest, we're going to get into that, up 35%, Spotify up 44%, and Reddit up 34% year-to-date.

Okay. So what are these companies pulling forward now? They all have some sort of generative AI sort of story to them. So can you continue? If you think these are catch-up plays, do you continue with these themes? You don't have to give me stock recommendations or anything like that. Just how are you thinking about this?

Well, I think there are three different things. First of all is the infrastructure being built out, right? And you're seeing the Broadcoms, the Marvells of the world building out the infrastructure, which is necessary. But the winners have kind of been picked. I doubt there's going to be a new chip that's going to come on board that's going to say, oh, I'm the new AI chip, although people are investing in that.

The next thing is there's a transformation of a lot of the software names. I'm saying how do they play in this world? And whether it's GenAI and you're providing messaging layer with Twilio, or you're kind of rewriting a lot of your software to provide more value using GenAI like a ServiceNow.

That's a real theme that even the legacy players are really heavily investing in making their software more modern by using AI to both write the software and having workflow that's AI-enabled.

And that's going to add more value, which they believe will give them pricing pressure in the medium term. So not only will they not get disintermediated by the next wave of startups, but they're also going to extend their leads. So that's super interesting. And then Gen AI, I think it's going to help on two levels, on the media level. So we talked about Pinterest. You saw Snap had great earnings. You put them in the bucket, to a certain extent, Meta and Google. A, the ads are going to get better.

better, more personalized, better content. We've all seen the beautiful images that AI could do without having six different creatives retouching them. So the ads are going to be better, more relevant, more beautiful, and therefore increasing ARPU. And then the Internet's going to be more personalized. So you're going to see more personalized experience on these broad platforms with better ads, therefore higher ARPU, and you're going to see it lift.

and you're already beginning to see the lift in the numbers in some of the companies. Well, let's talk about Pinterest. Okay. So you were a very, very early investor in that name. You've enjoyed a heck of a run in the private markets, but also in the public markets. So the company has been very volatile, or at least the stock has in and around their earnings. I think over the last four or five quarters, the stock the next day has moved 20% in either direction. A couple of things going on there. When I see that sort of behavior from investors,

There's probably could be better visibility as far as their guidance is concerned. So I'll just leave that out there, Bill Reddy, if you're listening and you want to come on here. Bill's been a great CEO and he's really attacked it, you know, coming from the commerce side to be able to add more things and do different stuff.

that had been done before. But I think you're right on the communication of consistent, transparent communication around how the company's evolving and taking advantage of things like AI. So it's not a surprise. Yeah. So here's a comment from the information. I think this is the other day. What's working at Pinterest? Two artificial intelligent trends have converged at Pinterest. The growing usefulness of AI in improving advertising, which we just talked about. That's the big story for Pinterest.

meta and possibly for Google and how falling costs of such technology can benefit large application developers more than other types of companies. So interesting stuff. I know that they've been telling this story, but now the investors just started to appreciate it. My question to you is, has it changed much? I mean, the financial results were better, but is it that more that investors are looking, again, going back to a theme we were talking about, to broaden out their exposure to this theme? I think they're

broadening out, I think they also expect to see that return on investment come. So whether that's more efficient software development, therefore better products turning quicker, or the ability to use tools this year. And I think you're starting to see those tools being used. And I think, you know, as part of what people are doing analyst days, what they're showing to their partners, customers is, hey, we have this new tool set that'll make the experience richer. In the last cycles of technology,

The incumbents didn't do that. They said, you know, we're really focused on what we're doing before and startups came and disrupted them. But the best companies and a lot of the companies you mentioned are getting ahead of the game. And as we've talked about before, I would say this is the first real mega trend that the incumbents are leading the way. And whether that's Microsoft early on open AI or whether it's Pinterest providing tools to disrupt itself.

Those are really important trends. Does that make you nervous, though, as a VC who are looking for really early stage sort of like disruptors? No, we plan on the incumbents being fat and lazy. And one of the great things about historical venture capital is you rely on incumbents that are fat, lazy, and probably locked into a business model or locked into something that will be very hard for them to compete with you.

This stage of incumbents are much better. Going back to a good illustrative example of that is when I first started, it was why couldn't IBM do this or why couldn't a big incumbent do it? And the simple answer was IBM wasn't doing anything. They were never going to innovate, and therefore they were great to compete with.

You know, this current version of a Microsoft, a Google, a Pinterest are pretty hard to compete with because they're innovating pretty quickly. They've been able to reinvest and they've been able to stay ahead on technology. So it's much, much harder for, you know, the rebels, the small group of pirates in any startup.

with less resources, less capital, a higher cost of capital, less customers, no brand to go to compete with, you know, a strong fit incumbent. Yeah. So how do you you probably get, I don't know, 50 pitch decks a week, right? Of all these like startups, it could be like, you know, just a concept and a founder who left one of these kind of more incumbency sort of places and they have this thing or you probably see them at different stages and the like. And don't you look at a lot of these texts and like, listen, dude,

I love you. And I think what you're trying to do is great. But fast follows or any of these guys could just flip a switch and do that sort of thing. Does it seem to be like a pretty disappointing time for early stage sort of founders who want to kind of try to get in there and disrupt some of these incumbents? Because in my career as a public markets investor, I've never seen like the lack of threat from so many startups to the incumbents. There's open AI, there's anthropic,

there's Cohere. I mean, the list goes on to about 10, maybe that are really impactful. Does that make sense? Maybe a dozen or so. If you include some of the guys in the data lakes and the models, um,

That's very true. But also in the current version on the infrastructure, kind of the first inning of AI we're seeing, a lot of that is in the infrastructure, right?

So you're not participating in chips. You're not going to participate in the data center infrastructure side. LLMs are really capital intensive, although there's probably five to 10 guys who are chasing that. And so I think now you're going to get into, hey, what can VCs and startups really do? And a lot of people have said that 2025 is going to be the year of AI agents.

So it's going to be application layer, AI doing jobs for businesses or consumers, and that's a better place to play. And then the key issue or concern there is how are you going to do better than the traditional software guys? And there tends to be a couple of different ways, but one of the most important ways is data.

And the landed software players have better data on you and whether it's Apple having better consumer data on what you're doing on your phone or SAP having better data on what you're doing in your ERP system. So that enables that having that data enables more personalization, better workflow, better artificial intelligence.

And that's the jump that startups are trying to make. And there's a million different ways we're doing it. We're working with a lot that have proprietary access to data or generating derivative data. And they're thinking about how to think differently about their data modes to get from here to there and be able to take on the incumbents. Yeah, and I suspect the good news for a lot of these startups is that the deep seek is

whether it was six million or whether it was a billion. It doesn't really matter. It's going to put pressure on the pricing of the compute that a lot of startups are going to need to kind of build out one way or another. And what they're showing is, hey, you can commoditize some of that infrastructure. You don't need to – I think Sam Altman from OpenAI said it's impossible to compete if you didn't have $100 billion. Right.

Well, obviously, that was a logical extreme. You can compete with less. It depends on what you want to take on. We're investing in companies that have great vertical software that's AI-driven, has proprietary data looking at a particular industry. So we had a company, Evolution IQ,

just sold to CCC for $800 million a couple weeks ago, really focused on the insurance area, using AI for claims resolution, anti-fraud, vertical software, sold for incredible multiple, boom time type multiple, because they really own that sector.

And we're seeing things in vertical software that are continuing to do exactly that. All right, let's talk about strategic M&A. Let's talk about the IPO backlog because, you know, last month, January 2025, it was the worst month for deals. I love that for deals that we've seen, I want to say, in a very long time. And, you know, listen,

one month does not make a trend by any means. You know, we know that the inauguration was January 20th. Yeah. So no doubt about that. It'll be really interesting to see how the DOJ FTC treats some of these early sort of deals that we would expect to kind of happen probably first in the financial space. But,

I think there's probably plenty of strategic M&A that could happen in the tech space. Now, you know, we have this traditional path where you do a dual track, right? You pursue an IPO, but then you also think about what strategic M&A looks like. I just want to read this quote. This was in...

The FT last month, January 15th, Goldman Sachs chief David Solomon questioned startups need to list. He basically said that they should use great caution before deciding to go public. The largest startups, Stripe, OpenAI, XAI, SpaceX, you know all of them. They have found increasingly deep wells of capital tapping venture capital behemoths such as

Thrive Capital and Sovereign Wealth Funds. They have minted a new type of private startup. Now, I think you feel pretty differently about this. You've been in the markets for a long time. You've seen the evolution of a lot of, you know, kind of spunky sort of startups and how they've evolved over time. And to do what they want to do to deliver on their promise, they have to get to the public market. So explain a little bit of that thinking, because I think both of these kind of

Thought processes are emerging right now, especially when the backlog has never been bigger for new companies for the IPO market in general. No, the amount of unicorns is at an all-time high. The amount of IPOs, although better last year, is still a terrible trailing three-year period. There's a bunch of different reasons for that.

But I think the path to being public is very important. And to be a public company, you get a lot of benefits. You get the branding exercise. You get cheaper access to capital. You get liquidity for your early employees and early investors. And it's part of the market maturation process. And a lot of people have gone public. And there's periods – there was a period about 10, 12 years ago where it wasn't cool to go public. And Zuckerberg said, I might never go public again.

And a lot of people at the time believed him. It's now another time where it's not as cool to go public. And that pendulum swings back and forth. But there is a lot of alternatives. There is a sense of, hey, you could raise a lot of money in the private markets. Databricks, OpenAI have raised billions or tens of billions of dollars in the private markets by accessing large venture funds or sovereigns that

effectively didn't exist in these markets years ago. I don't think it's the best thing for the company. I don't think it's the best thing for the market as the number of public companies has decreased and the access to younger companies has decreased because it's healthy for the market for folks to be able to participate early on. If you think about Microsoft or Amazon going public at sub a billion dollar market cap,

It feels like open AI and Databricks will go public at over $100 billion market cap. So it's going to be a very different opportunity set. And there's going to be a lot for the FTC and the SEC to think about to get more companies public, encourage them to go public, and provide a structure that's workable for everybody. You know, it's interesting. And this is one argument to say that for these massive, important companies,

companies, like let's just use OpenAI or SpaceX for that matter. SpaceX gets a lot of government spending with their contracts and the like. And let's say OpenAI is at the helm. Let's just say they get to AGI before anyone else. If these companies are private companies--

Think about the lack of transparency that you might have for some of the most important technologies for the next 100 years or so. And so that might only apply to, let's say, 25% of the startups that we have here. But talk a little bit about, because you've seen lots of managements go from that process of being under the radar, dealing with their investors for the most part in the private markets, but then that whole process of getting out there and telling the story to a broader audience, right?

getting really locked and loaded with your projections and your financials, that sort of thing, putting different controls into place, and then going out and being public. What is that process like for most? Because a lot of CEOs, they're probably not up for that challenge. A lot aren't. A lot have, especially when the sentiment's negative, like, well, that seems really hard.

You know, you got to remember, most of these founders, CEOs have never been through the process and view it as a boogeyman of like, oh, I heard it was hard. I heard, you know, your investors don't know or care about you like your private market investors. And, you know, it's hard to build in public and I have to eliminate all risk. All these boogeymen that exist for people who are unfamiliar with the process.

And especially when you can get liquidity or do other things in a very mature private market, they kick the can down the road, which is not the best thing for anybody. But if you think about and even talk to the guys like Toby and Harley at Shopify or Ben at Pinterest, having gone through it, they're like, it's not as hard as he thought. Although I didn't know it or understand it, there's not some boogeyman waiting there.

The transparency is good. The ability to access capital is good. There's a lot of benefits which oftentimes outweigh some of the things that, as Toby famously said from Shopify to founder and CEO of Shopify, going public was not one of the top 10 most difficult things I've done.

but it was one of the top most annoying things they've done. - Yeah, exactly. - And so, you know, all the, whether it's regulatory things which may or may not be relevant, or some of the other issues which might pop up, which hopefully, you know, the government will address to, you know, open up the spigot a little bit more,

That, you know, these things tend to be annoying, not important, and there's some important reasons to go public. Well, I think one of them, and it's not really touched upon too frequently, is that if you have a consumer-facing product, you build brand affinity. Like, think about, like, an Apple or think about a Nike or a Microsoft. Or even an SME or think about, you know, a Shopify. Yeah. I mean, obviously, Pinterest. You think about Twitter got a big bump when they went public in terms of usage. Yeah.

Spotify, although they went public in a direct listing, they used the PR around the direct listing to grow their user base and build awareness of the consumer product. So it's not only for the financial audience, but also the consumer audience. And that's important. And obviously some companies even price their IPO a little bit lower. So they wind up on the front page of everybody's newspaper, when they used to have newspapers saying, you know, Spotify trades up 20% or whatever it may be, Coinbase trades

you know, trades up 80% or whatever it did on the first day. So not only consumer products, but even financial services. Yeah. If you're worried about a downturn, if you're worried about a difficult macro environment, if you worry about like the change in secular shifts, it's not going to matter. You're going to have more liquidity in the public markets than you would in the private markets. And I would think that, you know, in a rate environment that we're in, that we might be in for a while, I'd much rather have my stock

trading on a major exchange in the U.S. and getting price discovery on a day-to-day basis, on a minute-by-minute basis. And liquidity. Yeah, well, 100%. And then think about this, because I keep reading these headlines that private's the new public, whether it's credit or equity or this or whatever. And I'm saying to myself, that is an absolute disaster if we go into a period where rates stay high, if we have stagflation, if we have a different secular shift that disrupts a lot of this stuff. I think to myself, we were.

I think to myself, WeWork in 2019, where it went from a sentiment standpoint. I know it's really different where everybody was all in. And then all of a sudden, it literally loses 98% of its value for a whole host of reasons. And could that happen in the public markets?

Sure. But would the transparency in the last year or two helped a lot? No doubt about it. It might have forced the management to do different things than they did in 2019. There's a lot of companies that have executed incredibly well. So, you know, obviously there's discipline that's called upon you. You have very public goals and guidance.

that you have to execute to. You're able to push that down to what that means for your entire team. And everyone knows that there's a pot of gold at the end of that rainbow and it gives people a reason to push. I mean, Uber did a great job and Dara did a good job saying, hey, we're getting to EBITDA positive. Hey, we're getting to these set goals, which she was very transparent about.

And I think it was a rallying cry for all the employees to have a very public goal that they were chasing. Yeah, no doubt. I mean, we're in a building where Palantir is, and I see these guys walking and gals walking around. They have shit-eating grins all over their faces. I'm just going to be really, really clear about that. All right, really quickly before we get out of here, some of these stocks in the public markets have done really, really well. We have supposedly a change in the regulatory regime. Are you expecting...

a bunch of these incumbents to use that currency to kind of get all up in there and they need this bolt on or that bolt on, or they want to do an acqui-hire here. Do you expect that to happen? We're starting to see more and more material acquisitions. I mentioned Evolution IQ, which was acquired, was announced about a month ago. We have something we're announcing tomorrow, which is material. And it feels like with the new FTC-

A little bit less regulatory. We're getting back to normal business. And you're seeing you have a backlog. You have a backlog of M&A. You have a backlog of IPOs. And that spigot's starting to turn on a little bit despite all the volatility in the news.

I'll just say this. I've never seen anything on such a high level by so many, what are they calling them? The tech oligarchs or there's some oligarch sort of thing or whatever. So you have Elon Musk, his proximity to the president, and you think about all his different companies, the potential conflicts of interest, right? And just him operating the Doge. And then you see Mark Zuckerberg has just kind of gone down on his knees. He just doesn't like the proximity that Elon has. Sam Altman, the same thing. Jeff Bezos.

Bezos, chairman of, you know, obviously Amazon, but also whatever his stupid star company is. Yeah. You know, that sort of thing. And then Sundar, Satya, all these guys are jockeying in and around, but they all have competing interests in a major way. And they all kind of hate each other. And Tim Cook, I got to throw. So I just don't know how this ends well.

Like that's my point for all these companies who think that they're doing what they should be doing because they have a fiduciary responsibility to their investors and all the other stakeholders, whether they be their employees or their customers and the like. I just feel like this is about as confusing as it's ever been. And they think they have so much clarity about how this is going to go. And I suspect it goes the other way. Maybe the flip side of that is they know there's not a lot of clarity and they know there's all these crosswinds.

And so if they get a little bit more visibility, it matters more today than what might matter in a more normal presence. Yeah, no doubt. Well, it'll be interesting to see how this plays out. Rick Heitzman, you made us all smarter. You made me smarter. That's not a hard thing to do. I really appreciate you being here. Always great being back. We'll see a lot more of each other. All right. Let's do it, man. Thanks.