139 – Why America’s Top Hospitals Are Sounding the Alarm

Marcus: [00:00:00] If you enjoy this content, please take a moment to rate and review it. Your feedback will greatly impact our ability to reach more people. Thank you. Alright. Back again? Yeah. Um, tell me something. Good. Um, 

Vic: my son graduated high school. 

Marcus: Oh, congratulations. It is graduation week, isn't it? Yes. I'm like all my friends who are going through that.

It's, that's cool. Yeah. So 

Vic: we celebrated Sunday, he walked, you know. 

Marcus: That's awesome man. And 

Vic: it was, it was good. I'm happy for him. Sad he's be, he'll be leaving. But, you know, a good transition. And then he's been, he's been partying and hanging out and, you know, as he should. Yeah. Yeah. Having fun. That's awesome.

Marcus: So you guys are, uh, t minus three months to empty nest. Yeah. 

Vic: Yeah. Basically. That's right. That's right. It's 

Marcus: amazing. 

Vic: Yeah. I'm excited about it. I'm not sure what it will bring, but looking forward to it. That's awesome. 

Marcus: Okay. All right. That was something good. I asked for something good. That's something good.

Awesome. Uh, loaded up week, lots to talk about. I, uh. Uh, [00:01:00] I, I, I've, I've had a, I've had a good week. Uh, it's also been an intense week, but I've had a good week. Um, maybe the one thing I'll just bring up is I, I flew up just on 24 hour Loop to New York City for a round table, uh, that was co-hosted by, uh, HFMA and KPMG.

Um, Tuesday was h FMAs not-for-profit hospital investor conference. And so they In the city? In the city, yeah. Yeah. In the city. So the day before they did this round table, you know, kind of focused on the private markets as that's become more of a focal point for innovation, potentially also for access to capital.

Yeah. Just given, you know, all the crazy things that are happening. And, uh, it was, it was a great session. You know, some really, uh, really strong system. CFOs were, were in the room. Mm-hmm. Some great analysts. Bunch of different folks from KPMG were there. Um, and I was there kind of representing venture capital.

Vic: Yeah. 

Marcus: And, um. You know, I, I mean, I think there's a lot of, uh, soberness out there right now. I mean, I think [00:02:00] people are, uh, excited about opportunities to innovate and, um, you know, kinda leaning in and looking thoughtfully at, at private market opportunities and at the same time feel a little bit, uh, hamstrung by just the amount of change that is, you know, coming down the pipe right now.

Right. Yeah. And, um, a lot of discussions around that and around just some of the clear, uh, systemic challenges that make, make real positive change very, very difficult in the industry. So it's, it's always, it's, it's one thing, you know, when we are on the outside as VCs just kind of talking about it. Yeah.

But sitting in a room and just listening to a bunch of, um, people actually. You know, in the game. Mm-hmm. Um, talking very civilly about those challenges is it's, it's helpful. It's helpful for me to know that we're not just totally speculating, like we're Yeah. 

Vic: Yeah. That's what I was gonna comment is I think it is, [00:03:00] it's hard for me in our VC kind of lean into change.

We profit, I mean, we're, we're supposed to invest in change kind of culture. It's hard for me to keep up and get my head around all the, all the activity, all the shifts in policy and technology. Um, health systems have a much very different culture for, for patient safety. And it's much more excellence and like high reliability because someone's life's at stake.

That kind of culture is not optimized for fast paced change. It just, it's just not. And so I can imagine it would be, if it's hard on us, it's, it, it's definitely hard on people that are trying to interact in with, even if it's, they understand it getting their, their employees and all their caregivers to, to even understand all the change that has to be made.

It's gotta be really hard. 

Marcus: Yeah. And it, it's, it's also like a really stark reminder of, [00:04:00] you know. All of the challenges, all of the realities to operating in the healthcare environment today. Mm-hmm. You know? Yeah. Um, one of the analogies that was made that I thought was a good one, because it made me think a little bit differently about it, was, you know, sort of talking about some, some of these larger hospital campuses, like international airports, um, in terms, you know, in terms of like what the size of the capital investment.

The size of the footprint, and just the reality that like when you land those things in a community, what are you just gonna do? Abandon them. Like you can't. Yeah. You know what I mean? Like, so, so when start thinking like, theoretically about how practical is it to just easily move everything in a community to a bunch of disparate, you know.

You know, different sites, right? Because they're optimized in all these different types of things when, when you've invested in multiple international airports all around your right, all around your, your region. Um, it, it was just [00:05:00] one of those analogies that made me think Yeah. You know, like we would never think to do that with, with an airport, right?

Yeah, yeah, definitely. And you could, you could poo-pooed away when you're not in the seat of having made the capital investment and like, well 

Vic: that's, I that's what I was trying to process through the, the fixed cost capital investment is immense. Right, right. And, and then technology changes and we talk about it on a podcast, but, but they've invested hundreds of millions, maybe billions of dollars in the ground and, and decades in some instances of.

Effort and time to build up those capabilities. Yeah. It's really difficult just to then unwind that, change it. Yeah. Right. Yeah. 

Marcus: Yeah. Just because you get a, maybe a slightly more advantageous margin. Yeah, right. You know, rate over here. Yeah. You know, it's, it's a lot. It's a lot. Yeah. It's a lot that we're dealing with.

So anyway, um, I always appreciate direct exposure to Yeah. Industry leaders to make me think about this in a, in a more [00:06:00] practical way. Yeah. You know? Um, alright. We got a lot to talk about. Yeah. You ready? Yeah. Alright man, let's dig in.

Uh, start with the economy. I think the first story is about our credit rating as a country. Uh, we already had two of the rating agencies downgrade us and I think Moody's was the last one. Yeah. Um, and so that sort of officially, uh, took us to, uh, is it double A one 

Vic: now? 

Marcus: From aaa. Yeah, I guess that's right.

Yeah. Yeah. I think, I think that's right. 

Vic: Yeah. It's one notch below the top. Yeah. Yeah. AA one. Yeah. Double 

Marcus: A one. Yeah. Uh, it's, uh, downgraded due to large deficits and rising interest costs. So those are all sort of top of mind things. This is exactly what we're talking about right now. Uh, and the halls of the house and, and, and senate, uh, as they work on the reconciliation bill.

Um, that's, uh, moved through the house. We'll talk about that in a little bit, but I mean, you [00:07:00] know, it hadn't, so talk about the, the round table that I was, that I was in. Mm-hmm. Uh, it was Monday morning. This had this, this news came out on Monday, and in that conversation, you know, they were talking about how the cast, the, the cost of capital universally had just gone up, you know, and it took me a second to like connect the dots there.

Uh, but this is what they were referring to, right? Like your credit rating goes down. Your cost of capital goes up. Right. And, and it, we're not just talking about for a sector, we're talking about for a country. 

Vic: Yeah. 

Marcus: And so, um, I I, I've never been in the market when I paid attention to this kind of stuff to actually understand what the, what this kind of thing could mean.

I mean, have you thought about that? Have you thought about the, the broad implications of the overall cost of capital for the country going up? Have you thought of that before? 

Vic: I mean, I, I think that's the most important thing to consider, but I don't think that Moody's down, so I [00:08:00] have a different kind of take.

I don't think Moody's downgrade materially changed the cost of capital in the us Okay. I mean, I, I, I agree with all of the concerns that they put out here, and it probably makes sense to downgrade the us. The other two agencies had already downgraded us, but I, I don't think that there's. A lack of demand for US treasuries.

Um, okay. We, we, 

Marcus: we, we have like a next story. We're gonna talk about this, so Yeah. Yes, 

Vic: yes. We'll, we'll get to that story, which I 

Marcus: think actually goes against what you're saying, but yes. It'll, it 

Vic: goes against what I'm saying, but I think that, um, investors knew these topics before Moody's told them. Sure. And they know it after I, I, so, I don't know.

I think it's more of a, um, bad symbol of we're heading in the wrong direction. Okay. But I don't think the call of capital changed between Friday and Monday because Moody's did this. I think we're hitting in the wrong [00:09:00] direction and we need to fix our debt problem. 

Marcus: Okay. But I mean, I just wanna understand, I, this is not my area of expertise, but I think we do know that if you like, like, let's, let's say you're a not-for-profit hospital, right?

And if your, you know, if your sector's credit rating goes down, your cost of capital does in fact go up. On, on your bonds. Like the, like the credit rating is directly impacting your, your, your cost of capital. 

Vic: I think if you are not the less well known you are mm-hmm. I think the more important the credit rating is.

Yeah. And so for an individual hospital, certainly 

Marcus: yes. 

Vic: Uh, if you want to get someone in another country to buy bonds of this mid-size not-for-profit hospital or something, they will look almost exclusively to the credit ratings. But I don't think there's a lot of buyers of US treasuries that are relying on Moody's expertise, but that could be wrong.

That just was my, yeah. Okay. That's just my perspective on it. 

Marcus: Well. [00:10:00] It, it's happened. Uh, and uh, we, we are, the cost of 

Vic: capital is going up, but I don't think because of this, I guess that's my point. That's, that that's 

Marcus: your point. Yeah, that's your point. You think this is more symbolic and it doesn't actually trigger any difference in That's I in the cost capital.

Okay. Alright. Uh, next story. Wall Street Journal, the, the, uh, headline Weak Auction of Government Debt Jolts Markets. Um, the Dow slides 30 year treasury yield surge is above 5%. So yeah, I, this was another one of those stories. I've been traveling a lot this week, so I, I didn't sort of, uh, deeply understand what was happening here.

But the, the chatter on X was basically that it was a week auction. Yeah, that right. So, 

Vic: so, so that's more, to me, that's more important than the Moody's thing. And you're right, it's in the same direction. So you could group it together. It's 

Marcus: in the same direction, and it's during the same week. During the same week.

But I, 

Vic: I don't believe that the Moody's downgrade triggered this week auction. But that You don't think it influenced 

Marcus: it at all? 

Vic: No, I think it, I think it's the Congress and all the. Ridiculousness in [00:11:00] DC Okay. That also was going on this week. Yeah. But, but it, it could be all the above. Sure. Oh, okay. 

Marcus: So let, let's just talk about what actually happened at the auction.

Vic: Yeah. So the, uh, the US Treasury sold, I think, um, I think it sold 20 year treasuries, but the headline is for thir, I guess maybe the 30 year yield increased, but there were, there was an auction for 20 year bonds, I believe. And it had less demand than, than typical, and then it was expected. And so in order to clear the market the way, it's like a reverse auction that the treasury, it's not like a, it's an automated thing.

They, they paid a higher yield than expected. And there's no question, I completely agree that we are issuing too much debt. We have a, we spend too much money. And we either need to cut back spending or grow our economy or probably both. Um, [00:12:00] and so that, that is an issue and you're seeing that being reflected in the bond market.

Marcus: Yep. Next story, another Wall Street Journal, one America's fiscal situation threatens the good mood on Wall Street. Um, so this is just commentary about the combination of the auction and the, and the loss of the AAA rating. 

Vic: Yeah, yeah. That, that's right. The, this is before the auction, I think. Yeah, it is before the auction.

Um, and so the, the stock market and the, you know, the bond markets all reacted to it because it's, it's symbolically bad. So, 

Marcus: so, so the yields, so, okay. Did the yields go up as a trigger against the credit rating? Like, is that, is that demonstrably true? 

Vic: Yeah. The, the yields went up on that day. On that day?

Yeah. On that day. Yeah. Yeah. 

Marcus: As a response to that, to that news? Yes. Yeah. Okay. Alright. Uh, alright. Shifting to Walmart. Um, well, just anecdotally, did you see, uh, where President Trump on, uh, truth social, uh, no. Told Walmart that [00:13:00] they need to eat the, the tariffs? 

Vic: I, I did not see that. Yeah. But they are pretty clearly not going to eat the tariffs so far, I think.

No, no. 

Marcus: I'm, I'm just telling you. Yeah. He, he, he said you made billions of dollars over the last two years. You should not be, you know, presenting what the tariffs are or passing it on to consumers. You should eat the tariffs in, in all caps, I think. Yeah. Uh, like eat the tariffs and then it was like, we'll be watching you

anyway. I wanted to make sure I, I let you know that before. 

Vic: I'm happy I don't have that kind 

Marcus: of profile. Oh man. Yeah. Uh, okay. So Walmart to cut 1500 corporate jobs in restructuring the retailer plans, layoffs, and a reorganization named at trimming its expenses and speeding up decision making. 

Vic: Yeah. So this is, uh, sort of in the same thread as other stories were seen where, um, this is not a tech company.

The last few have been tech companies, but they're getting more lean [00:14:00] and they're sort of cutting. This is mostly executive. Mm-hmm. Management. Yeah. So it's not in the stores. Uh, but even though, um, you know, there's maybe growth in the economy that they're, they're sort of cutting back on how they're gonna manage it.

Marcus: Yeah. Yeah. I mean, you know, 1500 corporate jobs and maybe against an average of a salary of two 50. A year as a Yeah, that's a lot of money. 

Vic: Yeah, that's right. 

Marcus: That's a lot of 

Vic: money. And I think they can do Getting more efficient maybe. Yeah. Managing the business. Yep. 

Marcus: Yep. Uh, alright. CNBC, Bitcoin hit a new record high of 112,000 as the rally marches on.

That was, um, updated 21 minutes ago, so it's at least fresh today. Yeah. Obviously Bitcoin's very volatile by the time you're listening to this. It could be up or down from that number, but right as we're recording, uh, Bitcoin has hit, uh, a new, a new all time high. 

Vic: Yeah. And I mean, I am, I think this is sort of the other side of the trade of, of [00:15:00] the interest rates and, and concerns about US debt.

Um, you're either gonna buy gold or Bitcoin depending on your age really. Right. Um, and so if people are concerned about the US sort of fiscal responsibility and our ability to pay debts over the next 20 years. You might buy some Bitcoin and it's such a small sort of market cap compared to treasuries, that that even shifting half a percent, 1%, you start to really move the market.

Marcus: Yeah. Um, starting to see calls again for, uh, Bitcoin to get to a million. Um, yeah. Many of those calls out there, just, just sort of trying to play out over the next three to five years, look at all these trends, look at where everything's going. Yeah. And you know, the, we're gonna be in a multi multipolar world.

It may not be dollar denominated, it may not be anything denominated. And, and so what will be something that's liquid? Something that, um, you know, doesn't [00:16:00] have any, uh, nation state rails to it? Um, yeah. Or even corporate rails to it that allows you to transact around the world, but also, you know, is a recognized store value.

Yeah. 

Vic: I mean, there's no question. I mean, from my memory, Biden. It took a lot of money from Russia because we were wanting to keep them, you know, make them play nicer in Ukraine. Yeah. And we had the ability with the Swift system, swift system to take it. 

Marcus: Yeah, 

Vic: that's right. And then Trump has, and made us more of a concern in the global kind of, if I, if I was not a US citizen, I think you need another set of rails.

And so yes, I think Bitcoin, whether it gets to a million in whatever timeframe, I think it is the alternative to dollars over the next several years. So it's gonna go up. 

Marcus: Yeah. So the reason why, why I brought up the million is to your point about the market cap being small, right? Yeah. Be because, because the only way that the market [00:17:00] cap grows up is that the value Yeah.

Of each Bitcoin just keeps going up, right? Yeah. It ha I mean, I think it has to go up, it can be denominated. It's very, very small fractions. That's, that's sort of the beauty of it, right? To sheets and so 

Vic: yeah. I mean it's maybe it's 3 trillion now, and so it's. It's going to go up in market cap, I think. Yep.

Yep. Agree. What's 3 trillion? Microsoft? Um, I don't think Microsoft's 3 trillion, but there 

Marcus: are two maybe. 

Vic: Um, 

Marcus: I thought, I thought there were a little more, maybe, maybe there are three. I know. I thought we're a little more than that. Uh, okay. Moving into the VC rundown. Zos. Yeah, I I think it's zos. I don't really know.

Des raises 25 million for customer relationship management platform and probably should you use a million of that to rebrand? Just joking. Uh, the Behavior Health Focus company will use the Series A funds to accelerate product development and expand support for its customer base. Uh, Florida, Florida Base, founded in 2021.

And let's see, do we see here? [00:18:00] Who led the round? 

Vic: Radian? I think it was Radian. 

Marcus: Uh oh, yeah, yeah, yeah. Radian Capital. Okay. All right. That's a good name. Yeah. Um, let's see. Anything here of note that, that makes it feel specific to healthcare in a meaningful way about this company? 

Vic: Uh, well, it's, I mean, it's a behavioral health focused, um, I mean Okay.

CMR, basically. Okay. Um, so it's a tool for behavioral health practices, I think. Okay. So, I mean, it's healthcare in that sense. I mean, I just think it's 

Marcus: interesting. I just wonder like, why, why would, why would one of these firms not use HubSpot? You know, HubSpot's HIPAA compliant now. Yeah. Et cetera, et cetera.

So it's just, I just think it's interesting, but, you know, 

Vic: yeah. I think that's, that's, that's the question is like, that's the question, right? Are they able to focus on this one vertical and offer something very unique features that are appropriate for that? That's what I was asking. I, I don't. I don't know what those features are.

Right. I can imagine some, but I don't know this company well [00:19:00] enough. Right, right. 

Marcus: Uh, okay, moving on. Pulse two.com story rad ai, $8 million raised to to develop generative AI solutions for radiology. Uh, so let's see here. The round was led by a bunch of health systems, advocate, health Memorial Hermann, Corwell, Atlantic Health System.

Um, total funding is now up to 68 million, which is interesting. This $8 million round was probably all just strategics getting in and, and that's right. Using it. 'cause they're, they're getting a lot of benefit out of it and they wanna be on the cap table. That's probably what that is. That's right. 

Vic: I mean, they raised 60 million prior to this in the c Yeah.

And so this is like an extension of the c Yeah. To bring in strategics. Yeah. Yeah. Probably 2 million each. Yep. 

Marcus: Yep. That's exactly, that was good for them. I mean, that's, that's a really good sign. It's smart. Right? That's a really good sign. Uh, and you know, some of these are, are smaller on the regional side, but advocate's, not advocate's a big system.

Right. Royal Harmon is smaller, but pretty good. Yeah. Core world too. Yeah. I mean, yeah. Quite good, but, but smaller. Yeah. You know. [00:20:00] Uh, okay. Axios Pro exclusive bio state AI raises $12 million series A, uh, let's see here. Generative AI startup using RNA sequencing data. And who is behind this one? Uh, uh, so a cell cell.

A cell, okay. That's a good one. And 

Vic: what's interesting is they're not, um, they're not planning to bring new drugs to the market, um, but more like AI services to sort of, um, service the market. Mm-hmm. And provide support maybe, uh, so it's a different business model. I'm not sure I fully understand how they'll do that, but, um, but interesting.

Marcus: Okay. Um, I like the little note here about, uh, some of the angel investors. They've got, uh, Dario Amide. Yeah. From, uh, anthropic as one of the angel investors. That's good. That's a good name, right? It's a really good name. Uh, alright, let's keep moving on. Uh, hinge Health. Okay. So we talked about them last week as we announced that Ada was gonna, IPO and [00:21:00] Hinge Health had their IPO this week.

Thankfully the market had calmed down by the time they actually went out. Yeah. Uh, they raised 437 million in the IPO and you've got some details around how they performed relative to the price and the opening. 

Vic: Yeah. So, um, they came out in that sort of, um, 28 to $32 a share, 400 and change as far as the capital raised.

And, um, what you wanna see is the price go up after the first day, which was today, I think. Um, and it opened much higher. So there was a lot of pent up interest in this. I think probably because it's been. We've been waiting for it. Yeah. 

Marcus: Yeah. 

Vic: Um, and then it came down a little bit from that 37, 30 $8 a share that was at the open, right at the initial bunch of people in line, kind of at nine 30 ready to buy, but it closed over the 32, the top end of the range.

So I think it was successful. IPO and from my point of view, the window is open and let's, let's go, let's go. 

Marcus: I love it. Uh, okay. [00:22:00] This is an exclusive from the CIO Journal of the Wall Street Journal. Austin's Reign as a tech hub might be coming to an end byline is regional tech hubs across the US are losing talent as workers return to the coast with Austin being one of the hardest hits.

So, uh, this is noteworthy relative to our last episode because we talked about the, um, Q1 Carta, uh, state of the markets report. Right. And it actually showed Austin being quite strong, even beating Boston. Yeah. Uh, for that, for that quarter in terms of, uh, you know, overall VC deal strength. Mm-hmm. So this is, you know, not, not a great headline and, you know, probably a leading indicator talent leaving versus actual deals getting done.

Right. Right. The, the deals probably trail that. Um, but the idea here is that we're, we're back in a window where, you know, it, it seems like we have these cycles, right. Where. Uh, an amazing set of technologies, you know, launch and there's a lot of, uh, geographic consolidation and centralization to, to sort of get all the talent and all the synergies that happen [00:23:00] from people just bouncing off of each other.

Yeah. Um, and then we kind of hit a lull and then it just diffuses and people decide to get arbitrage from living in other places. But we're at, we're at peak AI fever right now, and it is concentrated, um, in just a few places. And certainly Silicon Valley is, is, you know, in San Francisco or top of the list there.

Vic: Yeah, no, no question about that. I think that, uh, in healthcare we're a little bit, just because we're such a slow adopter of technology that it's like you have to look at other markets sort of. Yeah. But, um, but I think probably the, um, the mobile phone as a new way to deliver applications and software was the last time this happened.

Before that, maybe the internet. Yeah. And so you were like 95 with the internet, maybe 2005 with the mobile phones roughly. Maybe. Maybe oh six. Yeah. So it's roughly every 20 years. Yeah. Something like that. Yeah. 

Marcus: I mean, um, I, I, I, I guess I would also say I feel like, uh, during the social boom, there was also a pretty [00:24:00] heavy Yes.

You know, concentration as well. 

Vic: Yeah. So when pe I think when there's a new modality or I don't know exactly what to call it, but a new way to think about delivering technology, it's changing very quickly. Mm-hmm. And there's a lot of benefit from that. Uh, just close proximity because people are at a meetup at a bar, and it actually matters whether you get the information tonight or tomorrow night.

Yeah. And you, it's, it's that fast of a change. 

Marcus: Yeah. And, and also I think just the general posture around it. Like, like, I mean, let's keep it real here in Nashville, I, I would say the predominant narrative is AI is hype. Yeah. That's right. Right. You know what I mean? Is that it's not the predominant narrative in San Francisco.

No. You know what I mean? Like 

Vic: Right. And so if you are a believer or not even a believer, you're trying to learn about it and figure it out, it's worth it to go to somewhere where everyone, everyone you talk to is like, oh yeah, and you should look at this thing and learn about this. [00:25:00] And I considered this other way to monetize it.

Right. Where in Nashville you get sort of a, you know, maybe not a blank steer, but, but half the people are. Disparaging it. Like Yeah, it's not, it's not ready yet. Yeah. It's not that real. Yeah, exactly. And the other people are learning from you, right? 

Marcus: Right. Exactly. Uh, this is a story that we've been quietly tracking for a long time, and it's finally starting to make some, some headlines.

Uh, the SEC chair signals investor access to private markets could soon broaden. So, um, this is generally all around the accredit investor designation and how people are realizing how much wealth has been created in the private markets, um, and how that has been limited, um, for the general American public.

They can't get access to something until it goes public for the most part. And that's kind of not fair. Right. That's kind of not fair. And so we have all sorts of, you know, different opinions on how to do that. Um, but the, the SEC Chairman signaling, that is a, that's a, that's a big signal. [00:26:00] 

Vic: Yeah, that's right.

I mean, he. At some level, he's the one called setting the policy and regulating it. That's right. Um, and I think the current administration is certainly of a mind of opening up more individual freedom and not so much like protecting people because if you protect them too much, they don't, can't get access to assets that are gonna appreciate a lot.

And it's all sort of interrelated in my mind. But as we have, um, too much debt and we end up with, in interest rate being high, inflation, being high, financial assets are likely to perform because they will, they will benefit from sort of government interactions and your salary's not gonna be the same. So opening up opportunity for people I think is positive.

Of course on a vc. So I. So it's, I would naturally [00:27:00] say that, but I believe it too. 

Marcus: Well, I mean, I, I, I think founders would also say this is a positive thing too. Yes. Right. Definitely. I mean, because, definitely because listen, uh, I, a lot of the conversations I've had recently are educating founders because they're, they're, they're not studying the market like we are.

They're, they're not having conversations with LPs like we are. Right. They're focused on their business. They don't understand the illiquidity challenges that are happening right now. Mm-hmm. They don't get it. They just know there's not capital for them. Right. They're taking it overly personal. And I think, you know, any way that we can open the top of funnel to allow more capital to come in and ultimately get to the founders, like, it's not that even, it's not even about the VCs Right.

At the end of the day. Yeah. It's really about getting more capital to these founders so we have more shots on goal. Um, that is, that is a great thing. That is a great thing if we can make that happen. 

Vic: Yeah. And there's lots of ways to encourage justification, uh, get people to. Take smaller bets [00:28:00] and then that would force them if they're gonna deploy capital to put it into more assets.

There's, there's, I think, smart ways you can make it more likely to benefit a lot of people Sure. And less likely to cause really big problems. Yeah. And, and I think the, the new SEC is really looking at that. 

Marcus: And I think also from the, just the, the moral perspective, I think it feels right now very difficult to justify not allowing, um, everyday Americans to put money into innovative companies led by founders who are trying to make something great happen in the world and allowing them to buy meme coins.

Yeah. You know what I mean? Like how do you, how do you justify that? 

Vic: I, I can't justify that. You, 

Marcus: you know what I mean? 

Vic: Yeah. 

Marcus: It's, it's just like there's something not quite right about that. Yeah. That's right. Uh, alright. Revolut, CEO raises 250 million [00:29:00] for an AI powered VC firm called Quantum Light. 17 of the funds deals to date have been recommended by its proprietary AI model.

Um, and it's basically, you know, with the exception of the VC that's signing the, the, the deal, um, AI is making the decisions. 

Vic: That's right. So, I mean, our firm and a lot of VCs today, I think you have humans that are trying to utilize AI to, to learn faster or maybe do deeper due diligence. They have flipped that and the AI is the one that's making the decision.

And the humans, there are very few humans, but the couple that are there are there to. Transact or, you know, open a bank account. There's some things that humans have to do with the regulatory environment, but it's sort of flipping that and it's the first, it's the first time I've seen a VC firm being, you [00:30:00] know, managed the investment committee.

Is is effectively the, the AI or the group of agents, you know, I 

Marcus: mean, I I have to say in the life of what we do as VCs Right. In the life of what we do, while the decision of which companies we pick is massively important, it's not where we spend the majority of our time. Right? Right. It's not where we spend the majority of our time.

And, um, I'm not quite sure why we would think, uh, that AI technology can do a better job of diagnosing a patient. You know, we're, we're happy to sort of talk about that, right? Like how the doctors are not gonna be able to keep up. So we need the ai. Um, I th I think, you know, it's interesting how, and at the same time then there's so many things that the [00:31:00] AI that the doctor does that are not the diagnosis, you know?

Right. There's many, many things that the doctor does that are not the diagnosis. I, so I think there's an analogy here, right? I, I think you can see a place in the very near future where there's enough data and enough benchmarking to where LPs are gonna kind of be like, Hey, I expect you to be using AI to make your decision making process.

Like, now you, you know, ultimately I probably want you to like, make the final call. Um, but I expect you to have, you know, an AI decision making. Uh, bot that's supporting you. I don't expect you to be doing this on your own. I don't expect you to have like just a bunch of human associates, you know, reading all sorts of decks and, you know, and I, I think that's gonna be the responsible thing to do.

I think that's now, I mean, it's not now. No, no, no, no, no, no, no. I'm talking about LPs. It is a, I'm, it is absolutely not now. It's not now. Now. [00:32:00] Should it be now? Maybe LPs are not there right now. They're not. 

Vic: If, okay. You're, you're talking to LPs now. I, I'm, so, I, I don't have the frame of reference. They're not there.

They're not there. What I, if you're saying that AI should be an important component in how the firm operates, I think that should be now same page. Same page. I think it is, I'm talking about it 

Marcus: being part of diligence from an LP to a GP. Yeah. And it is not today. That's not today. It is not today. 

Vic: Um. And I think it is, I mean, it's just true.

You're exactly right that if I'm saying it's good for these other organizations or professionals, it, it's just not right to say it's not good for my profession. That's right. AI is going to be very good at all of the roles that I do. And I hope, I think [00:33:00] I'm hopeful that the combination of things that humans can do, that you and I can, that I can do combined with things that ais do better than me, will collectively create a better product.

And I think that's true about doctors. I think that's true about VCs. ALM almost every job. Um, where the line is drawn and like what the human should do and what the AI should do. I think it's great that quantum light is sort of pushing that boundary and testing it. Um, I, I think it'll be interesting. I'm not at all certain that the human will have to be the one, like with the majority control of the investment committee, but, but there's aspects that are, that a human is, is good at, and there's aspects that humans are really bad at.

Like, when I lose money in a certain business model or in a certain market, I am reticent to invest there again [00:34:00] because I have scar tissue. And yes, I'm self-aware of that, but it's difficult to actually be objective where it might be a great deal that I'm passing up because I lost money four years ago in something similar.

And, 

Marcus: and, and look, hold on. That's, that's one side of the coin. The other side of the coin is, you know. W we, we've both led deals. We've both pushed deals through an investment committee. Right? Yeah. And it's the rare deal that I can say I feel I was truly objective on it. You know, I mean, in, in retrospect, I think back on them and I'm like, of course there was some bias in there.

I can't always, I can't always tease it out, but like, of course there was some bias in there somewhere. Somewhere. You know, it does, it doesn't mean I didn't evaluate it and I didn't run through all the paces and I didn't run through all the checks and all those kinds of things. Right. But still, why did I choose this deal over another one?

Yeah. [00:35:00] Right. Was was it totally data-driven? 

Vic: No, a hundred percent. No. Definitely not. And bias and intuition are two sides of the same coin. Yeah. And, and in fact, a part of like what VCs pride 

Marcus: themselves on. 

Vic: Yeah. Right. They're gut, I mean, you know. Yes. And so if you're gonna say you have a good. Gut instinct or intuition or pattern recognition.

I think you also are admitting that you have biases. Totally. Now, maybe my intuition and biases collectively allows me to, on balance, make better decisions than make bad decisions. But it's not right to say that there's not some of both. And I think it's also just a fact that AI is already better than I am at certain aspects of the job, and it is improving much faster than I'm improving.

So there's gonna be a lot of things that AI can be utilized to make a VC [00:36:00] individual or firm or fund or investment committee better. And quantum pushing it to say like they're putting the AI on top is, is interesting. 

Marcus: Yep. Yep. Agree. So, I mean, this will be one to watch, right? I mean, the thing about VC is generally speaking, it takes a long time.

That's right. To see, right? Yeah. We won't 

Vic: know for five or 10 years. Takes a long time to see. 

Marcus: But, but it, it, it is cool. Alright. Uh, the AP we're, we're into policy now. Um, the AP Trump's beautiful bill spans more than 1000 pages. Here's what's inside it. Um, I thought this was a nice little breakdown. Uh, they, they did here they talked about the tax cuts for individuals and businesses.

Um, they talked about parents and older Americans facing work requirements for food assistance, um, and new work requirements for Medicaid. So this is kind of the, the, the big, you know, um, topic of discussion, right? Is work requirements and how how many people will roll off of Medicaid as a result of these work [00:37:00] requirements.

It's the number that's being estimated from, uh, the CBO is north of 7 million. 

Vic: Yeah. And I think the date in this article is, is not correct. I think one of the, so they worked until like two in the morning. Two in the morning, yeah. Last night. And one of the things that changed is they moved that date up to, I think it's January 1st, 2027.

Uh, 27 was, was what I thought as well. Yeah. And the, what I have been sort of uncovering is it is partially a desire to, to encourage people to work, but it's also if you are not a documented, um, yes person legally in this country, you might be working a lot of hours, but you can't prove to anyone. And so it's a way to, to get illegal, undocumented people off the Medicaid roles in a way that is, is, um, I don't know, more palatable [00:38:00] on social media or in branding.

I mean, 

Marcus: there, there's nothing in here that says anything about, you know, but it has that effect. But it has that effect. It has that effect. Yeah. Um, I'm skip that one. Uh, the, the savings accounts. So 

Vic: yeah, that also got changed last night. The MAGA account. Um, I think Trump required it be called the Trump account, but it gives every new baby born in the next four years, a thousand dollars that is invested on their behalf.

I mean, I guess it's good, it's extra spending, but it's going to industry 

Marcus: place. Yeah. And, uh, and then a lot of funding for, um, for the border and for the Pentagon and for the Golden Dome. Yeah. Yeah. Uh, and, and then the final thing, uh, is, um, attacks on university endowments. Did this make it all the way through?

Vic: It was widely debate. I don't know that that percentage is what I thought, but I think, I think there is, now it has to go to the Senate. Yeah, yeah, [00:39:00] yeah. No, of course. Yeah. But, but I think there is a tax on the, in the investment side of endowments. Okay. Alright. 

Marcus: So a lot packed into this bill. Mike Johnson worked very hard to get the house, to get it across the line.

They stayed up all night. They got the thing across the line. Yeah. So now it goes to the Senate. 

Vic: Yeah. And I think on balance, I'm, I think I'm happier that they got it done than it just is chaos and there's no bill, but there's a lot of things that are gonna be difficult in it. 

Marcus: I mean, look, say what you want.

Um, Trump controls his party. 

Vic: Yeah. 

Marcus: And, and that's right. And he can get them. He went over 

Vic: there on Wednesday and told him, basically told him you're gonna do this. Yeah. Told him what to do. 

Marcus: Yeah. Um, he, he is able to. Get them to, to do what he needs them to do. Right, right. Uh, okay. So this is interesting, like, you know, in the show notes when we were running through all the stories, you, [00:40:00] you, you had this New York Times article listed as something else, but apparently it's a rolling live story, uh, that the New York Times is Yeah.

Which is 

Vic: a interesting way to manage your links, but that's a whole different 

Marcus: Yeah, yeah. So the, the it, it's kind of like just, I, who knows, by the time we kick this out as a show note link, it might be something else. That's right. Right, right. But right now is there anything 

Vic: related to the Trump administration policy?

Yeah, yeah, 

Marcus: yeah. Maybe it's just like a live feed of like all things Trump on this link. Um, but right now, uh, as we're reading it, um, the key headline is about, uh, the Supreme Court and their decision around, uh, president Trump's executive power. Really the offices, their office of the president's executive power.

But, um. It's, uh, it's specific to President Trump because he has been, um, saying that he should have authority over the independent agencies and the Supreme Court agrees. Yeah. 

Vic: I 

Marcus: mean, they have, which makes 'em not so independent. 

Vic: Yeah, that's right. They, I mean, they are part of the executive branch, [00:41:00] and I think it is, um, certainly traditional and I thought kind of healthy that many of them, not all of 'em, many of 'em have five like commissioners.

Yeah. Like FTC for instance, used to have five commissioners, and the tradition was that the president would name three of them, but there were, there were the, the minority party or the party that was not in the White House had two of them. And they had no power to drive the, the agency, but they could dissent, they, they could comment.

Yeah. And I think it actually led to better policy. But Trump, one of the things he did early on, and the reason for this lawsuit is he, he excused, like fired the, the Democratic FTC chairs. Lemme ask you 

Marcus: a question, do do just a, uh, a specific question? 'cause I've, I've, I, [00:42:00] uh, I'm not sure that it led to better policy.

I think, um, my experience is that it helped the public understand, uh, the potential downsides of a particular, uh, rule or action, um, that an agency might make and kind of served as a formal, um, up close and personal, uh, assessor and, and critique. Of, of what was happening at those agencies. And I, I I, I think about this specifically with the SEC and, um, the role that Hestor Pierce played.

Mm-hmm. You know, like she, she was all over all the podcasts. Yeah. You know, and, and the whole crypto industry like sort of galvanized around her because she was able to articulate details that they could only like, try to ascertain from all of the stuff they were reading. She would be like, no, no, let me explain to you how this is actually working.[00:43:00] 

And she was engaging with the general public, um, giving them some pretty strong details on the inner workings of the SEC and what had actually happened that led to certain decisions. And I, I just found that, like, I didn't see Hester Pierce ever change, uh, anything Gary Gensler wanted to do. Yeah.

Visionary power. No. 

Vic: But, but, but the information is, makes it, it's better to have the information for the general public. And, 

Marcus: and I, and I think it built the case against Gary Gensler, you know, because. Yeah, it, that was how I thought about it. You know it, yes. And, and I guess the point I'm just trying to make is that was in instrumental in this election, you know, and so if you don't have the dissenting voice that is able to actually provide up close critique and and analysis and give you the backstory on how something actually happened, what does, what does the opposing party have to sort of [00:44:00] latch onto as it's building a case against the incumbent from a regulatory perspective?

That's, that's what, that's what I see as, as being really damaging. Well, that's, 

Vic: that's why Trump wanted to exclude excuse them. That I, I think that that's why, that's why, why I'm making the point. That's, that, that's, that's the reason he wanted to get them out of there. Yeah. Yeah. I, I think that, uh, it makes for a weaker opponent, it makes in, in the elections, it makes for a weaker opponent.

I think that's right. I, I am saying that's that's true. I am saying, I think it also makes for a weaker agency understand now, Gary. Gary, I understand, I understand that. Chose not to listen, but, but that was his option. Yeah. I, I, I, I get that point. In the ftc I think it's more clear 'cause they have to go to court and fight.

And I think they benefit from having the, the constructive discussion in the inside before they go in front of the judicial branch. Right. Right. And [00:45:00] if you let, if you show those people the door, you don't have the knowledge of what the other side is gonna say. Yep, yep. You don't get limited in what you can do.

Right. I mean, certainly FTC did whatever they wanted to do. Sure. Um, but I think it's gonna lead to, but they lost a lot of cases too. They lost a lot of cases. They, because they lost a lot of cases because Land Con also didn't, didn't wanna listen. Right, right, right. But the fact that they didn't. Listen to the dissenting opinion and change course is their option.

Marcus: Yeah. 

Vic: Right. Yeah, that's right. Um, but I think they are, the institutions are better having a two, three combination. And I think it's a, it's not a good thing to not have that dissenting opinion. I'm glad I 

Marcus: pressed you on that. 'cause that it, that now that, that's a good point. Point. No one 

Vic: ca point probably no one cares, but I think it's going to degrade the agency's ability to actually make policy that that functions will Yeah, 

Marcus: I think that's 

Vic: right.

Marcus: I think that's right. Uh, so anyway, Supreme Court agreed with Trump. Yeah. And, 

Vic: and where it, so [00:46:00] yes, that's already mean. The horses left the barn on that stuff. That's done. That's stuff where, um, it makes everyone nervous is where this is pointing. The Federal Reserve Yes. Is also an independent, an independent agency that is.

At least on the org chart under the office of the executive. Yeah. And it wasn't called out, it wasn't part of this case, but it is on the same trajectory or, or it gives Trump, hopefully he won't want to go there. 'cause drone power only has a year left and there's no, in my mind, there's not enough reason to do it.

But I mean, I would make decisions very different than Trump makes on a lot of things. Hopefully he won't do that. But it gives him precedent to, to then make a case that he could remove the Chamber of the Fed. 

Marcus: NPR, these [00:47:00] democratic governors are trying to curb healthcare for unauthorized immigrants. I have not read this, but I do know that California and New York, I don't know if New York is in here.

Um, but I do know that California and New York are both and Minnesota, uh, states that are very, very challenged by the federal, um, policies rolling out. Yeah. They, they don't, and how they impact their budgets. 

Vic: Yeah. They don't. All three Minnesota's the third. They, they can't afford, uh, Medicaid as it is right now.

Yeah. 

Marcus: They, they can't pick up the match. 

Vic: Right, right. And so California is adding in, uh, a hundred dollars a month fee so that you could pay to continue on it. Um, Minnesota Cut benefits and New York, they didn't give a lot of detail about New York. Um, and so I just wanted to put this into, to note that it's being, there's changes everywhere, like.

The, the, we just covered the house is putting in work [00:48:00] requirements, three of the most democratic states are making changes. It's, it's, it's everywhere. 

Marcus: Yeah. And, and, and look, and these are really important states for healthcare, right? I mean, yeah. Healthcare is sort of market to market and generally controlled by the states.

So these changes have huge implications for our industry, huge implications for, for us, as, you know, VCs in the industry. Yeah. Um, it's a, it's a big deal, especially if you have a, you know, a company that's delivering services in these, in these markets. 

Vic: Yeah. The waiver programs are really challenged. Yes.

Marcus: Yeah. Like, they have to go through all sorts of hoops now to get, you know, to, to get a demonstration over the line. Now, I, I don't think, basically they're not gonna, new ones are not gonna, not not, they're not really gonna happen. I mean, like, they, they, they still can happen. Yes. But. That's right. The bar is super high, right?

The bar is super high. New York Times four key takeaways from a [00:49:00] new White House report on children's health. Um, the report echoes many of Health Secretary Robert F. Kennedy jr's talking points on ultra processed foods and vaccines, but with some notable emissions. 

Vic: Yeah. So, um, this is a good summary, but, but let's talk about it the next tab.

Okay. Um, 'cause there's a couple charts, so, okay. Um, Kennedy put out this report on making our children healthy again. Um, and it it's a really sobering view of the state of our children's health today, which, which I everyone knows sort of in theory that we are struggling, but there's a couple of slides that are really difficult and he is focused on, um, sort of food.

Chemicals, uh, vaccines and, uh, exercise and obesity. Um, but if you go to maybe like page seven or so, okay. The, the one that, I mean, so this slide everyone knows and people that are listening, [00:50:00] uh, it's a very common, we talk about it a lot, which is sort of comparing the, the spend, health, healthcare, uh, spend per person compared to life expectancy.

And of course the US is spending over $11,000 and we have the worst life expectancy. That is always a shocking chart, but I've seen Yeah, but also we've many times. Yeah. But keep going. The next one, um, here, so this is, was surprising to me. So, um, only 23% of our, of our youth age 17 through 24 are eligible for military service because of health problems.

That just seems like a, a really difficult stat. Not so much because we need them in the military, although maybe we need military people, but, but that's a really bad sign of their future because the [00:51:00] reason that they are not qualified is that, you know, they're overweight or they have a drug abuse problem or they have mental health issues, or they're, you know, have multiple of those things.

And they just seen, I had not seen this, this slide before. Hmm. So it's 32 million, you know, teen kids. I mean, they're, they're, they're young adults. Maybe 17 to, to 24. 

Marcus: Yeah. 

Vic: Um, but they're struggling. 

Marcus: Yeah. That, that's a, um, that's an interesting, it's an interesting, I. Set of data that, uh, a I'd want to dig into a lot more.

And BI, uh,

it's, it, it, it is just kind of interesting. I, I guess, um, knowing what I know about getting into the military, I do know that there is generally, um, a preparation period [00:52:00] before they go to bootcamp, um, where they kind of get military ready, you know? 

Vic: Yeah. 

Marcus: Um, so the, the bar, the bar is pretty high actually to even like enter into bootcamp.

Um, you, you need to be, yeah. You need to be relatively baseline healthy. And so it makes me wonder, you know, whether that that 23% really just sort of reflects, couldn't go right away. Well, well, no, no. The 20%, the 23% that's eligible, right. That, that makes me wonder. Okay. So one out of five kids might be, um.

Kind of a performance athlete, you know? Mm-hmm. Um, and that, that probably would, would sufficiently qualify them. Right. And then some other things, because, you know, we've talked about like the overweight bid and like, you know, I'm overweight, but it's PMI. Yeah. Okay. I don't know about that. And, you know, there's, there's other, you know, my point, so that maybe is more hopeful.

Yeah, yeah. Yeah. Yeah. So, so anyway, I, I guess I would just say like yeah. [00:53:00] Um, it's, it's a, it's a good talking point for sure. It's a good talking point. Yeah. And, and it, it deserves to be dug into more, I mean, you know, for sure. That's, that's a, we we don't hold up, um, health readiness for children as we used to, that's for sure.

Yeah. There's no question about that. Um, and at the same time, just I like, I know a little bit about the procedure to Yeah. For young people to get into the military and they do have like kind of a staging that they do before they even actually Yeah. Go into boot. So, 

Vic: yeah. 

Marcus: This is more Maha stuff. So, uh, in, in approving soda ban for food stamps, USDA reverses decades of policy, the Trump administration approved a first of its kind waiver for Nebraska allowing a ban on soda purchases through the supplemental nutrition assistance program at SNAP starting next year.

Vic: Nebraska was the first one to get through the, the whole paperwork process, right. I, there were several states in process. It's hard to defend selling [00:54:00] su, you know, sugary soda to not selling, giving it through this program, but it also is, you know, kind of telling poor people that they can't have something that other people have.

And so it's, there's tension there, but I think it's, it's not healthy. There's nothing healthy about it. So, 

Marcus: yeah, 

Vic: I, I mean, 

Marcus: it's to, to me, spelling out what SNAP is, the supplemental Nutrition assistance program. Mm-hmm. Okay. There's no dietician that would say you should drink soda. 

Vic: Right. 

Marcus: So, you know, to, to me, this one is a little bit more straightforward.

Right. You know what I mean? Now, if you wanna make a different program that's not called the Supplemental Nutrition Assistance Program. Yeah. And it's about something else, but there, there, there's really no nutritional value. Yeah. In a, I mean, 

Vic: I mean, children, it's to keep children from malnutrition and starvation.

Okay. Okay. Well then, and, and soda's not 

Marcus: gonna 

Vic: help with that. 

Marcus: Th the, the, the then the list should meet, meet the purpose. Yeah. Right. So th this is actually one of those things that, [00:55:00] uh, is not as controversial for me, but I understand why it's controversial, you know what I mean? Like, I get it. And also that's a change we probably just need to kind of work through.

Yeah. Yeah. That's a change we just kind of need to work through. So, um, I don't have any issues with that. Uh, fierce Healthcare, CMS deploying more coders, advanced systems to audit all Medicare advantage contracts. Well, 

Vic: yeah. So what I 

Marcus: mean, 

Vic: yeah. Right. So, um, CMS has audited about 60 a year since Medicare Advantage was created, and they're using technology and hiring people and they're gonna do all 600 now.

And, you know, not surprising. That's great. 

Marcus: Yeah, it's good. Great. I'm all for that. 

Vic: Yes, 

Marcus: right. I mean. That's, that's another one of those things where I have no issues with that. 

Vic: Yeah. And if someone is doing something wrong, they should change it. If there's some confusion, then we should make it more clear.

Audits are good for our health. Yes. 

Marcus: I hate our [00:56:00] audit that we have to go through. Everyone hates the audit 

Vic: they go through, but it's good in general. It's good. At the end of the day, it's good. Right? 

Marcus: And you're happy you go, you know, you it, it, I don't like 

Vic: it when I'm in it, but, but then I learn stuff and it's good overall.

Exactly. Yeah. And you apply 

Marcus: those things into your, into your next one. Yeah. You improve your overall protocol. Audits are good. You know, listen, uh, another fears, healthcare senators to reintroduce Bill that seeks to re to reform prior authorization in Medicare Advantage, med Advantage. Getting a lot of, uh, attention.

Yeah. Yeah. A lot of attention. So no one likes, I mean, but all people just gonna like, stop doing it, right? Like, like, like if, if the, the margins are just not that great in healthcare, right? So, I mean, if you just keep layering on more and more regulatory burden. People are just gonna be like, at some point they're gonna tap out.

'cause it's the free market. It's like you're taking a free market program and you're just like continuing to layer this stuff on. And I get it. I, I'm all, I'm all for using [00:57:00] technology to do more audits than you were previously doing. That's one thing. But, um, I don't know. It it, it just feels to me we are going to see the, the result of this stuff is always, you're just gonna see people drop out of doing it, period.

And it's gonna mean less choice for senior citizens at the end of the day. I'm not saying that that's, yeah. So maybe, maybe not, maybe not the right thing to 

Vic: happen, but, so I think these stories are quite different and, and maybe we'll agree, maybe we won't agree. The government's job, in my opinion is to be the referee and doing the audit and making sure people are following whatever the rules are is exactly right.

We agree. No one likes pre-authorization. No, but it's a, it has to be, there has to be some way. That if a procedure is very expensive or shouldn't always be used, that there's a way to question it. Maybe it changes names, but the Senate coming in and saying, insurers can't do this thing, uh, that is kind [00:58:00] of their job to do.

That seems like government coming in and like picking sides. And I don't want them to pick sides. I want them to audit things and make sure it's followed. But I mean, I don't like pre-auth as much as anyone, but if you take that tool away, they're just have to invent something else to, to control costs. 

Marcus: So is this senate coming in and saying that they wanna make it easier for everybody?

Like, like less burdensome. 

Vic: They wanna make it hard. No more pre-auth process or very, you can only do one a quarter or whatever. They're gonna put in limitations so that Medicare Advantage plans can't do pre-auth. 

Marcus: Yeah. Does it kind of feel like, uh. Insurers have found other ways to use data to kind of adjust this on the back end and not necessarily have to do it on the front end.

Vic: I think that 

Marcus: think they have, they already have or they're going to I think they have. I think they have. Right. I think they've already figured this out. 

Vic: Yeah. And so maybe, I mean that [00:59:00] makes sense. The Senate is, is putting regulatory in, in after the, the industry already has moved on. I think the industry's 

Marcus: figured 

Vic: this out, but it's not gonna have an effect.

I mean the, we have a two-sided system where the payers have to control the spending and the doctors have to argue that it's, it's medically necessary. That's I think, what we want. Yep. Unless we wanna redo the whole thing. But for right now, that's what we have. 

Marcus: Healthcare dive. The judge shuts down Drug make's three 40 b rebate plans for now.

The district court ruled that the HHS does have the power to review drug manufacturer's plans to pay hospitals rebates instead of upfront discounts on three 40 B medications. 

Vic: Yeah. So, um. I can't remember. Johnson Johnson, Lilly, a bunch of pharmaceutical companies, uh, sued over this issue and it's been thrown out.

They, they can't do that. They have to continue with the three 40 B process. Yeah. Which is good for health systems, you know, whether it is [01:00:00] long term three 40, well, 

Marcus: well, three 40 B itself is not the problem because ultimately it's supposed to benefit the patient 

Vic: supposed to. That's what the, that's what the pharmaceutical companies are mad about.

Yes, yes. Because it doesn't always a hundred percent the benefit doesn't always stick with the patient. That's right. And there's a lot of health systems, maybe not a lot, I know several health systems that, that rely on money coming in from three 40 B. 

Marcus: Yeah. Because yeah, because the rates they get paid to deliver services don't actually cover the services.

Vic: Right. Right. So this will at least like, delay the process and maybe we can figure out some resolution. 

Marcus: Fierce healthcare new ever north program to cap out of pocket costs for Wegovy ends up bound at $200. So somebody did some health economics and figured out yes, that this is actually in the long run, an investment worth making.

Vic: Yeah. It'll maximize the, the revenue across the whole market. Uh, and, and good. I mean, when it first was out at like [01:01:00] 1200, 1400 just per month, this is not gonna work. And so it's getting to a point now where all these medications even flowing through Express Scripts, you know, PBM, they're now at a much more palatable amount.

No, yep. Maybe 200 is a lot of money for some people, but it's much less than what it used to be. 

Marcus: Yeah. And also, you know, both, both Lily and Novo have been dropping the costs on the drugs as well anyways. Right. So, right. I, I'm, I'm sure there was some good negotiations in there as well with, with both, uh, both drug makers.

Uh, healthcare Die of Ascension, still chasing financial turnaround after last year's cyber attack. The nonprofit health system says it has made progress towards recovering from last year's massive cyber attack, however, still posted losses during the third quarter of its fiscal year. I was at dinner last night and I was trying to make the point that like cyber security and cyber attacks were nowhere close to having this problem addressed.

Not, not even remotely close. Like, we are losing, we're losing this war, [01:02:00] 

Vic: we are losing, and it's going to, we're gonna keep losing. We have no way to even really protect our systems. They're, they're very, the vector attacker everywhere because it's 

Marcus: people. Yes. It's, it, it's, it's not the network, it's people, right?

Vic: Yes. And so Ascension has been struggling and they continue to struggle that, um. They lost, you know, $580 million over the last year. Um, hopefully they're getting better. They seem like they have a lot of good trends, but they're still losing a bunch of money. 

Marcus: Providence, CEO, state of healthcare, potential national security crisis as hospitals face stark economic policy headwinds.

Yeah. This, this, uh, this jives with, with some of the stuff that I heard in, uh, in New York. Yeah. In, in the round table, you know? Yeah. So, you know, not those words, but this is the sentiment, right? Yeah. This is the sentiment. Yeah. 

Vic: So Providence came out with their financials and it was as bad [01:03:00] as Ascensions.

They lost a ton of money. They're smaller, but they lost a lot of money. And the CEO is, you know, frustrated about that maybe, and making the point that it's systemic across the country, which I think is probably right. And it's also right that Providence is losing a lot of money. So, sort of both. I think he went so, um, I don't know.

Um, hyperbolic and, and emphasizing potential national security crisis, partially because it took attention away from his financials. 

Marcus: Well, but, but also, I mean, isn't this, isn't this also kind of a way of saying we're already challenged and everything that we see coming down the pipe Yeah. Is gonna be worse, is more challenging.

Right? Right. So, so it's kind of like, and, and I understand this right. As a CEO, if you're sober, you say, okay, we, we've got these challenges. And then your [01:04:00] board would ask you, okay, how are you going to deal with those challenges? And then you gotta tell your board, I can't even do that because I gotta try to fight to stop this next wave of challenges from happening.

Yeah. You know, I gotta work with the a HA or whatever. Right, right. You know, to, to do everything I can to try to stop this next wave of challenges from actually happening. 

Vic: Yeah. And at some point. I mean, Providence is a big system. Extension's an even bigger system. Yes. Yes. I think they're probably too big to fail.

I mean, I don't know what we would do if they actually fail, and so it maybe it's his job to be sounding this alarm. I, I think it 

Marcus: is. Yeah. I think it is. I I, I think the, the general public does not understand Yes. What is about to happen to the health systems across America. Right? Yes. I, I mean, like, like that's right.

It, it already has happened to our academic medical centers. It like it's already happened. Right. It's not going to happen. It's happened to [01:05:00] them already. 

Vic: Yeah. And in the next year it's gonna happen to all the nonprofits and some of the for-profits in huge job losses. That's, that's everybody. Huge 

Marcus: decreases in service availability, right?

Yes. I mean, you know, these are, these are massive issues for communities. 

Vic: Yes. And then when we go to the next story, it's not like we have capacity today. No. So one of our, uh, listeners sent this in. Thanks for that. If you see stories, let us know. This was an op-ed in the LA Times by two emergency medicine doctors.

Um, and they are describing how bad it is in the emergency departments across the United States. Um, with, you know what, what most of our listeners will know, what boarding is, where you, you are, you have no room to send the patient to, to admit them upstairs to the hospital so that they're in the ED for [01:06:00] 12 hours, 18 hours, 24 hours, 36 hours, and then it just backs up like any supply chain.

Then you can't put the new people coming into the ED 'cause you have the borders in there. Then they're in the hallway and then they're pointing out that it's difficult to train new physicians. Because you're doing it in the waiting room and you don't have the equipment, and you have whatever the other people waiting, looking at, looking at you.

And it's dangerous and not, not good medicine and not good training. And, and that's the state of our health system today before these new pressures come. 

Marcus: Yeah. And, and, and you know, not all Eds are the same. I mean, I think particularly in, you know, rural communities as well as, um, many like urban communities, especially ones where the population is, um, you know, concentrated amount of African Americans, um, the eds are, are even more so.

[01:07:00] Right. Because, because there's just a lot of trends around Yeah. Socioeconomically, this is that, this is how, you know, those populations engage with healthcare. 

Vic: Yeah, that's right. And it's, it's bad 

Marcus: now and getting worse. Yeah. All right. Fierce Healthcare. CVS sets the scoop up nearly 700 Rite Aid stores. I think Walgreens is also buying some as well.

Yeah. Walgreens 

Vic: is buying the patient files. Okay. Okay. Um, which also is important. Okay. Um, CVS is buying, um, well there it says 6 25 stores. They're buying, well, I guess it's six in, uh, they're buying roughly 700 stores. Yeah. Um, Kroger, Albertsons are buying some of a couple stores, but a lot of patient records Walgreens are buying a patient records.

So you, you, if you have stores nearby, you may not want the physical store, but you want to get the patient record and then you need to try to convince them to come to your pharmacy. But you have all their medical history and their [01:08:00] medications. Either way, I think it's healthy to have Rite AIDS assets go to other places that can serve these people.

Marcus: That's, it's a, that's a great outcome. That's a great outcome. Uh, alright. Watershed health rolls out, large scale data sharing platform across Austin, Texas region. Yeah, so 

Vic: this is, was a really, um, I think, optimistic thing to, to bring in after some of the not so optimistic things. So, um, we all remember the HIE initiatives where the government was trying to encourage health systems to share data across a region and it was not successful.

I mean, it maybe they, some regions got it done technically, but it didn't really change the way care was, was managed. This is a, a private, um, effort in Austin, so the public private with the mayor where they are really focusing on coordination across systems. So the data is. [01:09:00] Maybe, you know, table stakes, but they're trying to actually see where the patient referrals are and, and make the systems work more efficiently together, which is great.

If, if we can do it in Austin, maybe we can do it in other cities. And it's, it's much better. 

Marcus: I feel like I hear about these HIE, the HIEs initiatives, or 

Vic: I haven't heard of any HAE that works. 

Marcus: That's, that's, that's kind of my Yeah, I, I mean, I'm just putting my bias out there. I, I, um, you know, occasionally I feel like we see these, you know, HHIE startups.

Yeah. Those are really bad. I'll say that. 

Vic: Well, I mean, relying on a government, uh, consortium to be your early adopter is just not a recipe for success. 

Marcus: Yeah. And then the, and then you try to run your, like, run it through your head, like, how does this thing scale? Yeah. How does it consistently make money?

It's just, it's hard. Yeah. And so, so look. Austin is a [01:10:00] very, um, you know, it's, it's a very, very innovative region. It's a very, very innovative county. Travis County. 

Vic: Yeah. And Dell Medical Center is, is, they do 

Marcus: really innovative. Yeah. They do all sorts of amazing things as a county. Right. And so I love that. I just don't see how it scales beyond Austin.

Yeah. I don't know me, city News, how a new PE-backed RCM company plans to fix the transactional bowels of US healthcare might 

Vic: come on. So this is one where New Mountain is a, you know, decent size private equity firm. Yeah. They're taking three of their assets and putting them together to create a new revenue cycle management company.

Um, and I, I am have some hope, but I think they're taking sort of, you know, probably three assets that are. Struggling and trying to get synergies and get some [01:11:00] momentum and, um, just interesting to see. I mean, with the things going on at Change Healthcare with United, I think we, we need bigger RCM businesses to, to come up and so it'll be interesting to see if how it works.

Marcus: Kettering Health suffers system wide tech outage from cyber attack cancels elective procedures. Yeah, I mean, to your point, 

Vic: this is in Ohio. Yeah. We just, and they, it's a ransomware attack. 

Marcus: Let's move to pharma. Yeah. Uh, okay. So this was kind of crazy. Yeah. I mean, you know, because we had just seen Novo do the, the partnership with, uh, was it himss?

Vic: Yeah. Yeah. PIs and also CBS, I think. Okay. 

Marcus: Yeah. So they just done a couple of like pretty innovative partnerships. Yeah. Yeah. But I mean, I guess we had not maybe as closely tracked. I mean, I, I think we had, we'd seen the sentiment, you know, as we've been reading the stories about Novo versus Lily, and we just, it just feels like Lily was just like kind of wiping the floor a little bit there, you know what I mean?

Um, and, [01:12:00] uh, especially since Ozempic was the brand that led the way. Yeah. Like that was, they were sort of first 

Vic: outta the gate, at least from brand point of view. That was the, 

Marcus: that was the brand. Uh, but Novo's just sort of, uh, lost ultimately to Lilly in, in this, in this game. And so their CEO was pushed out.

Um, and, uh, you know, it's not, not a great moment for a big, big, big healthcare CEOs. 

Vic: Yeah. That's rough. Yeah, that's right. So, I mean, I think he, he had done an okay job sort of responding. To all the compounding, um, kind of off market competition, but obviously not good enough. 

Marcus: Yeah. Uh, GSKs blood cancer treatment combinations are approved in Japan.

The trial shows statistically significant progression-free survival, which results, um, it's a blood cancer treatment called B [01:13:00] Brep. 

Vic: Yeah, that's right. And so it's not, um, approved here yet, but really promising new treatment for, for cancer, which is great. 

Marcus: Yeah. It was conducted in patients with multiple myeloma, uh, which is, that's been a, that's been a tough one for sure.

Uh, so we always love to see that, uh, med City news, sleep apnea relief in a pill. APM ME Drugs. Phase three data set stage for FDA submission. The obstructions, the obstructive sleep apnea drug, reduced breathing interruptions in a phase three clinical trial. The once nightly pill, which is based on research from Brigham and Women's Hospital, activates muscles that keep the upper airway open during sleep.

So is this the end of the CPAP? 

Vic: Yeah, I mean if it, it's, it's in phase three right now, but it's promising. Um, and CPAP is rough, rough, rough. It's, it's hard to rough, it's hard to keep up with it. It's, it's, some people can't even [01:14:00] tolerate it. And so moving it to a pill medicine. It's really promising. Yeah.

Marcus: Yeah. 

Vic: I, I, I, a lot of people don't treat, I, I know a couple, couple people their sleep apnea because they don't want to deal with a sleep ap. 

Marcus: I know a couple people on CPA, so I, I'm gonna make sure I send them this link. Yeah. 'cause uh, I'm sure they'll be thrilled to know that there's an alternative to that thing.

Yeah. None of them speak fondly about their CCP a p experience. Yeah. Regeneron to buy 23 and me out of bankruptcy for 256 million. You know, I gotta say, I, uh, I feel like I learned about Regeneron during COVID. Mm-hmm. Um, and I think this is a really smart company. 

Vic: Yeah. They're a great, I think Regeneron is really good, I think is a really smart company.

I, I like them, 

Marcus: you know, and, and to me 

Vic: this feels, and it's a good outcome for 23 and me. I mean, they will, I mean, there's a lot of personal data there, but Regeneron will treat it better than anyone else. Better than they 

Marcus: did in independently, actually. Yes, that's 

Vic: right. That's right. 

Marcus: Yes. You 

Vic: know? Yeah. So it's a good 

Marcus: outcome.

Yeah. Yeah, I, I mean, you know, they're talking about [01:15:00] this racist privacy concerns. This Regeneron takes control of millions of in I, not, to me, 

Vic: the concerns were already there. Yeah. Yeah. Not, not to me. 

Marcus: I was, I was worried about this like, floundering company that can't actually secure the data. Yeah. I'm like, okay, now this lease is a grown up in the room.

Yes. Uh, no, I'm, I'm fine with that. So, so glad to see 23 and me now has a home and we'll see where the, where the data can lead that company. Yeah. Yeah. Pfizer pledges 1.25 billion for a drug candidate and promising, but competitive area of immunotherapy therapy. 

Vic: Yeah. So this is, I mean, it's a big week for new therapies.

So immunotherapy in cancer is, you know, very promising. Mm-hmm. I don't know the science well enough, but this came outta China, which is kind of interesting. Um, so they're licensing the technology from China. 

Marcus: Okay. Uh, Medtronic to separate the diabetes business. The medical device maker has been working to turn around the division over the past few years.

Uh, Medtronic's, you know. Been through several of these kind of carve up [01:16:00] over, over the life of its, of its, uh, yeah. Of the company. And, you know, here's another one. 

Vic: Yeah. The, the diabetes business was not, is not growing very well and, and sort of, uh, you know, maybe it's a cash cow, but, but they're gonna spin it out into another public company and I think that's probably better.

Yeah. Than they'll have two, you know, a, a growing business and one that is not growing, but cash. 

Marcus: Yep. Alright. The next frontier to treat cancer, electricity scientists are testing electric fields and pulses against the range of dis of diseases including rheumatoid arthritis and brain cancer. 

Vic: Yeah. So this is in the, about health and US category.

It's pretty scary to me. Um, but people are using it to treat brain cancer. They have a picture of a guy, if you go down wearing the, like the cap, there he is. Oh. And it sends. Electrical current through one side of your [01:17:00] brain to the other disrupting cellular division, which, you know, is kind of important.

But cancer grows and divides much faster than other cells. So it slows the growth of the cancer. But I, I think it has to have significant other effects too. So, um, I think it's promising that, that people are looking into this, but, but it, I don't know if I'd be the one trying it. So I don't know you, you're not signing up 

Marcus: for electroconvulsive therapy, but I mean, no, 

Vic: this guy who they interviewed, he, he has, you know, a couple months left to live and this could give him more time.

So I guess it depends on your perspective maybe. 

Marcus: Yeah, for sure. Yeah, for sure, for sure. Yeah. I mean, look, glio is, is is a terrible cancer. Yeah. So I'm, I'm all for as many shots on goal. Yeah, that's 

Vic: right. That's right. That's why I bring people's attention. It's. It's interesting science, uh, but disrupting [01:18:00] cellular division, I don't know how long term a solution that is.

You ready for the AI rundown? Yeah. 

Marcus: Yeah, let's go. Alright. So the first one I sent you this on Instagram. Yeah. Uh, this is from the deep AI is the, the handle on the Instagram account. And it is a, uh, a radiology doctor who is talking about how many years he has spent in school and in the field mm-hmm.

Studying to be able to do what he does. And, and he is pointing out that this, uh, AI tool that I think you went and found out is um, is a tool that is a company in Y Combinator right now. Yeah, that's right. Um, basically like did it right away. And so his, his 20 years I think he talks about Yeah. Yeah. His 20 years of practice, uh, is now 

Vic: Yeah.

Immediately it's a, if people aren't watching, you should check out the video. 'cause it's very, it's a visual thing. Well, he shows you the x-ray of a. You know, I think it's a woman or whatever, a lung. Lung X-ray. Yeah. It's a couple of lungs. Um, and [01:19:00] to my eyes, if you're not a radiologist, you can't see very much there.

Yeah. But, but 

Marcus: it's great. You know, he, he, he talks you through it. Yeah. 

Vic: Right. And then the AI overlays its analysis with like this heat map kind of thing, and it just jumps off the page, like very obvious, like, I don't know. A 3-year-old could, could point it out. Right. Um, and he, he ends with like a, I'm gonna lose my job, I'm gonna lose 

Marcus: my job.

Yes, 

Vic: yes. 

Marcus: Uh, you know, and many would say no, it's gonna help you go much faster. Yeah. And all these other kinds of things. And we've talked, it's both endless. Probably. We talked endlessly about how radiologists are, you know, the, the probably the most adept, um, you know, clinicians Yeah. When it comes to, uh, adopting new technology just because of the nature of imaging.

Yeah. Um, yeah. But he's not gonna be reading X-rays anymore. Not gonna be doing, not gonna be doing exactly what he was doing before. Yeah, that's right. Um, alright. And this was a, uh, a post on x, uh, Andrew Wilkinson, who's the CEO of Tiny, [01:20:00] um, he. Was basically showing that he has used Gemini 2.5 Pro, uh, in order to make a legal agreement.

And his argument is that I just saved $5,000 doing this. You know, and, and look, Andrew Wilkinson's like a real guy. He's like a legitimate 

Vic: Yeah. 

Marcus: Person. Yeah. Okay. He's like, I just saved $5,000 draft drafting this legal agreement and, you know, Google, Gemini 2.5 Pro ranks number one on legal bench, which is kind of the benchmark for accuracy.

Um, 83.6% accuracy. So, you know, you kinda take your chances and clean up that final 17%. Right. But 

Vic: yeah. 

Marcus: Um, there's a lot of, you know, especially if you are a business person who has read a lot of contracts and you understand the basics of what they need to, to look like. Yeah. Uh, you know, and, and this is just where we are today, right?

Yeah. I mean, I think we're, that accuracy number we have to expect is gonna go up, up, up, up, up, right. 

Vic: Yeah. And it, to me, it's, uh, just brought home why you need to be paying attention to this stuff. You know, pretty much [01:21:00] all the time. I had lunch with a lawyer here in town, maybe I think it was last week, and I was asking him about ai and he said, we have this tool, I think it's called Harold, whatever, it's like a law specific one.

And he is like, it's okay. It's not that it's not really worth doing. It has some value, but it's not, um, good. But we have it in our systems. Like all of their stuff is in there. Yeah. Um, and now a week later, like that entire business, Harold, whatever it is, AI is no longer a thing. Yeah. Because you can just use Gemini, you can use the main model Gemini from Google, but, but Crock is there.

Open ai. They're all in the top five. Harold's not even on the list. No. 

Marcus: No. 

Vic: And so you no longer, there's no reason for a point system where just like the, these AI frontier models are just like, just like sucking in businesses from, from everywhere. Um, pretty quickly. 

Marcus: I mean, that, that, that is kind of the scary part, right?

Yeah. I mean, most of the [01:22:00] commentary I saw on X we're gonna, we're gonna run through like Google io. Yeah. Yeah. But most of the commentary I saw about it was just like a quarter of San Francisco startups just got killed by Google io. Right, right. Yeah. Alright. Coming to a brain near you, a tiny computers Wall Street Journal story in the next 12 months.

And the number of people with a brain computer interface is set to double now from pretty low, low base. 

Vic: Yes. Yes. But I think there's four different companies working on this. Um, and so people know Neuralink. Yep. We talked last week about Cyron. Right. Which is partnered with Apple. Yeah. And then because of that announcement, I think the Wall Street Journal then now covered the, the space, the landscape.

And it's sort of, it's a description of all the different ones and they have different approaches. Less invasive, more invasive, um, but it's, it's coming and it's coming, you know, fairly quickly. 

Marcus: Precision Neuroscience is another one. And then, uh, paras. Yeah. 

Vic: Yeah. So I think it's good. Um, 

Marcus: [01:23:00] oh, no, this is good.

Yeah. Yeah. This is for sure. Good. Yeah. I mean, we have, we have so many people who, um, have, have these limitations that brain Yeah. Interface computers. That is good. That's what I'm talking 

Vic: about. I think people are gonna use it for augmentation Okay. As well. 

Marcus: I know, but I, I let, let's, let's stick, let's stick with the core use case here.

Right. Okay. You know? Yeah, yeah. I was jumping head, making, making people's lives better, you know, who are currently impaired in some way, shape or form. That's, that's fantastic. Clearly good's fantastic. Yes. Uh, fierce Healthcare, Microsoft rolls out age agentic AI orchestrator begins with cancer care. 

Vic: Yeah.

So this, uh, this is a real interesting, and it's healthcare use of an agent, right? So there already are, um, cancer tumor boards where. The patient comes in and you have all the different medical specialties that will advise the patient on how to treat his or her cancer. Um, and so Microsoft has [01:24:00] taken that concept and they have a bunch of agents with different specialties and then a, and like an orchestrating agent, and they're introducing it into the cancer space for the same reason that health systems have created these boards of humans.

'cause the technology is changing incredibly quickly. Mm-hmm. And no one specialty can keep up with it. Um, and so I think it's, it's interesting and they're. Partnered with health systems, and so we'll see how effective it is. But it's a good use of agents. I think 

Marcus: former Apple Design guru, Johnny, ive to take expansive role at Open ai.

Open AI is buying Johnny Ives startup in a $6.5 billion deal. How do you call something a startup when you buy it for $6.5 billion anyway? Well, when 

Vic: there's no product in 30 people, what would you call it? 

Marcus: I, well, it's just You're just buying him, aren't you? You're buying him. You're buying him, but you're buying him for [01:25:00] $6 billion.

I mean, it is Johnny. Ive, yeah. Yeah. You know, I mean, I, you know, talk about a guy who knows what he's worth. Yeah, yeah, that's right. The designer of the iPhone. Yeah. Yeah, I know. I mean, it's like the greatest device in the history of like humankind, so, yeah. But I mean, you have to go on a startup 'cause there's no product.

Like they don't have anything. I'm okay. Fine. 

Vic: Yeah. I mean, it's just him and his buddies. 

Marcus: Yeah. 

Vic: It's pretty 

Marcus: amazing. 

Vic: It's pretty 

Marcus: amazing. 

Vic: Yes. That's a hell of a brand. That's a hell of a brand. He was mean, he was brilliant for a lot of reasons. He's brilliant. But he, but he also was brilliant to leave Apple with enough time to get through his non-compete till now, because it probably was like two year non-compete.

Yeah. And I think he left two years ago. Yeah. Um, and he's been, I don't know what he is been doing, but waiting. 

Marcus: Yeah. I mean this, nothing left to say, you know, I mean, the speculation is open AI is, you know, trying to be the operating, the AI operating system and, and they feel that they have to have their own device [01:26:00] line.

They cannot just be embedded in other people's devices. They're probably right. Yeah. This is going to be incredibly difficult for them. Um, I, I don't, I don't care that you have Johnny. Ive, I mean, uh. You're, you're, you're fighting everybody right now, so, so we'll, so we'll see. We'll, we'll see what the combination of Sam Ballman and Johnny I produces, but like, 

Vic: you know, I mean it's trending towards glasses right now.

Okay. Meta. Meta and Google both glasses. He'll come up with some new thing. Um, I mean, but you're gonna look distribution. Yeah. No, kind of. It's hard to make it that much difference. Designing glasses. That's right. That's 

Marcus: right. That's right. OpenAI launches a new AI coating agent. Um, they bought Windsurf, right?

Yeah, but 

Vic: they haven't done integrated. I don't think it's even closed yet. Yeah. So if it still in the process. Okay. Okay. Um, but yeah, this would, this will will feed, they'll, they'll merge those two together, I think. 

Marcus: Yeah. I mean, dude, so this, this is, okay, so when we talk about like, LPs, right? I mean, [01:27:00] you know, I feel like we as gps have not even had had this conversation last night at dinner.

We have not even had the time to really sit back and say, okay. How should we rethink what use of funds for a startup should be? I think in, I think in the Valley they've fully done this, but that is not redistributed, that's not distributed to the rest of the world. Right? Like, like you and I have not yet nailed Yeah, that's right.

What the use of funds needs to be. And obviously it's an, it's a going concern here, like this development of what's happening. Yeah. But clearly, like in a very short period of time, software development is the, the cost is effectively gonna go to zero. 

Vic: Yeah. I mean, I, I think we have, so you're right. We haven't got to the point where we have discussed this and agreed on anything.

My opinion is you still need the technical co, you need one person technical co-founder. I mean, [01:28:00] but I think that's all. 

Marcus: Are you sure? I mean, that's my, are you, are, are, are you sure that a technical co-founder can't be made as an agent? I'm not sure. I mean, I'm not sure, man. I, I, I'm not sure that a technical co-founder is not just the, the coding interface for a visionary founder.

And how is that different from Vibe coding? I know we're, I know like kind of what Vibe coding is able to do today, but like, just can't you see the technical co-founder as an agent that is the interface to all of the Ts in the blah, blah, blah, and it kind of does all the things you're struggling with right now?

Yeah. Can't you see an agent kind of taking away that struggle for you and fighting with, with, with the different coding ais and like dealing with the, with the log files and the blah, blah blah, and then reporting back to you, Hey Vic, these stupid ais, they don't, they don't listen, you know, I'm working on it.

I'll get back to you in a week. It's [01:29:00] like, I think that's gonna happen. Yeah. I don't think you're gonna need a technical co-founder. 

Vic: Okay. Whether it's one or two. I mean, I think you need a founder to figure out what, I think you need a founder. What does the market need? I think you that and then fit a product to them.

That part and the context. The understanding like empathy with the user. Yes. And then bringing technical capabilities to solve that pain point. And refining it. Refining it, 

Marcus: refining it. And forcing the re refinement. 

Vic: Yes. That function, obviously I'm biased 'cause I invest in those people, but that function I think is how products are built.

Marcus: Yes. And launched. Yes. I think the reality is AI is, is a fair. Distance from that level of human [01:30:00] context. That's, that's, that's like the one thing that I think AI has, has a ways to go in the business world. 

Vic: Yeah. So, so we're fighting over a nuance. I I don't you think this is like really important? Oh, yeah, yeah, yeah, yeah.

So then I think that, um, I mean, I am the visionary side, right? So for me it is really important in that iteration process to understand much more deeply what is the technical capability, what can be done? And I'm willing to pay some ownership in this company to have someone leverage all those agents, but, but know deeply enough how to work with them and push them and say, this, this agent is not.

Creative enough to combine these two libraries together in some way that I can't fully explain now. That [01:31:00] may just be, 'cause I don't understand it well enough and I haven't seen the product yet, but we're debating whether it's one person or two. There's no, you don't need anyone else. Like 

Marcus: I think it's actually a pretty big deal if it's one person or to you.

So you're the visionary. I would consider myself in my own world a visionary. Yeah. But also I spent a lot But you started though, I spent a lot, lot of my life as a technical co-founder. Right. And then you, so you have both. I spent a lot of my life as a technical co-founder. Right. Okay. Right. And I also am the person who told you don't even bother learning how to code.

I know that turned out to be right, that that was right. I, so I'm going on record now and I'm telling you the things that a technical co-founder does, I think an agent can do. Like, like when I, when I think about what are the features, it's harder to get all of the market stuff [01:32:00] and the nuances of like how you're selling to people and all that part much, much harder, much, much harder.

There's something messy and wet and organic and biological about that piece. Yeah. That, you know, and, and EQ based and all this other kind of stuff. Technical co-founder is not that. Okay. You know what, the technical co-founder is an engineer whisperer. 

Vic: Yeah. I mean, hopefully it's the translation between strategy and engineering.

A good technical co-founder. Yeah. 

Marcus: That, yeah. And, and, and an AI could do that. 

Vic: Yeah. 

Marcus: An ai That, that that's a, that's a, that's an algorithm, man. An AI can do that. 

Vic: So we, we can take you down about, but what, where I think you were going is when, say I put in million dollars in a startup. Yeah.

90% of that money, I think maybe 80% is going to a team of developers to build the ui, [01:33:00] build the, I lost my password. How do I get all all of the table stakes that are not gonna really make a difference, but you gotta wire up and that's gone now. You don't need that anymore. No. And then a bunch of it goes to customer support, billing, uh, accounts receivable, uh, all, all of those like operational things.

Yeah. And what I've been getting excited about, and I don't fully have it formed right now, but there's like this, um, global state information state that, um, I mean a lot of the time and effort and people cost is. The marketing department asking the product department, how do we gonna present these features?

And then they send it off and then the sales people take it and then they get inbound questions and, and I think you could centralize that information story into some kind of global state, have it managed and sort of [01:34:00] updated and so to update it and improve continuously with ai. And then ais are sort of interacting with that corpus in a way that's much more efficient.

And if you have humans, you have humans, but you don't need as many humans. And the humans you have are really efficient 'cause they're not tied up in all this other inefficient things. So the cost to get from zero to one, I think is it's 90% less. And then the cost to go from one to a hundred is probably 95% less, 99% less.

And that's gonna drive a lot of competition. So where I think it might be that you need to is you're gonna have 300 startups all attacking the same narrow problem. And you might need to have, um, the ability to move more quickly or iterate faster or use the tech better. But that's just because I don't understand how [01:35:00] all the, like you started from tech and came up to vision.

So it's easier. I think 

Marcus: every, I think so. I, I was, I was saying this yesterday, I think every person you add is a crutch that makes you use AI less.

Y you, you're, you're, you're not as constrained. Yeah. You're not as constrained. Definitely slows you down. 

Vic: There's no question. It 

Marcus: slows you down. Okay. Well I thought you just said another person speeds you up. 

Vic: No, another person tells me like, you shouldn't go this way. You can just cut right across. 

Marcus: Uh, you don't need a full-time person for that.

You could glean that in community and all sorts. There's a million other ways you could get that insight. Yeah, yeah. You don't need a full-time person on the team to get that. 

Vic: Yeah, that's, that's probably 

Marcus: true. Yeah. Alright. It's our new phone strategy. Yeah. Yeah. Uh, open AI's biggest data center secure is 11.6 [01:36:00] billion in funding.

The eight building Texas project is a central piece of open AI's efforts to re reduce its reliance on Microsoft for computing power. Power. 

Vic: Yeah. So they've been talking about this for a couple months. It's finance now and gonna start. Um, and I think great. I mean, having this competition in the US with GRS in Memphis and.

Google is all over the place and open AI is gonna have their own facility outside of Microsoft. Is, is good. 

Marcus: Nvidia pushes further into the cloud with its GPU marketplace. The Chip Giant has created DGX Cloud leptin, a new service that will make its AI chips directly available to developers across a variety of cloud platforms.

Vic: Yeah. So it is, um, well this story and the next one, maybe I'm mixing up, but this, is this the one where they can weave in other proprietary chips as well? Uh, yes. Yeah. So [01:37:00] all the, all the, you know, massive tech scale scalers are, are developing their own chips in addition to Blackwell and, and the Nvidia chips.

And so they now have opened up their architecture to allow that, uh, which I think is smart. It keeps them sort of in their core with their, um. Um, whatever their sort of underlying communications, uh, tool is, that really is the thing that makes it all work together. If you don't allow Amazon and Google and people to put in their own chip, then they have to make a choice that's much harder.

Yep. I agree. Uh, and this is kind of the, this is what I was talking about. Okay. That the other one is, um, that they're doing a cloud service, I think for, to, um, allow core weave and other like their own clouds to be sold to and customers kinda competing with Amazon and all the cloud platforms. Oh, 

Marcus: okay. I I misread 

Vic: that last, there was a big conference, an aspect in, uh, in Singapore or somewhere that, [01:38:00] that uh, Nvidia keynoted.

Got 

Marcus: it. Alright. Google io finally. And by the way, this is a long show. Long show. Yeah. Um, but Google io finally, uh. We have put a link in the show notes. It is, uh, to a YouTube video from Google. Uh, it's already got 1.68 million views, so people are paying attention to it. Um, and it is IO 25 in under 10 minutes.

So a very, very quick way to get a rundown of all the things that Google announced. Um, I would say this was, uh, this was definitely the Empire Strikes back, you know, as, as far as I'm concerned. And I feel like when this whole thing kicked off you and I just, we, you know, when we talked about Google, we said a Google invented this.

You know what I mean? Um, be like. Their distribution, their brand, their cloud platform. It's gonna be really di like I know OpenAI [01:39:00] is growing incredibly quickly, fastest growing product, you know, maybe in history, all these other kinds of things. Um, but we just should not sleep on Google. Yeah. Because they, you know, they, they've got all the stuff.

They've got all the stuff and they reminded us that they've got Yeah. All the stuff. Yeah. Uh, with this io I mean, glasses, real time language translation, um, uh, just so much stuff. They announced so much stuff across all the product lines. Um, agent mode and Gemini AI mode and Google search, which to me, I like, I played with it and I was like, why do I need perplexity?

Yeah, yeah. Right, right. Like immediately I was like, perplexity is done. I, I do not see any for perplexity with AI mode Google, right? Yeah. So 

Vic: I like your Empire Strikes back comment. I think that, uh, they were hamstrung by how, how much money they were printing for years and [01:40:00] years and years and were kind of fat and happy and not, not super lean and efficient.

And then they got punched in the eye and OpenAI was beating them, and they had ridiculously stupid early products that were technically fine, but had been sort of overly managed to do things that weren't useful. And they have woken up. And yes, the, the number of products that they released in one day, it was just like, bang.

And they caught up on every front. Every front. They have the leading model, not that anyone's focused on that anymore, but they, they have this. Agent tool that I've been using. That's really good. Yep. They have this flow thing, which is a, a way to create full, full video, but they now can do sound, which soro can't do sound.

So [01:41:00] they do sound effects and voice and everything. 

Marcus: Um, the image generation, they fix the words. Yes. Like now you can, now you can actually use an image gen generation tool Yeah. To make images. 

Vic: Yeah. And then the, um, they are willing to sort of fight against the innovative dilemma. And they're start self-destruct.

They're, they're cannibalizing search. Yes. Directly, like in the search window. They're pointing you to AI and that's what they need to do. And it will destroy search, but just search was already gonna be destroyed. 

Marcus: It was, it was already being destroyed. 

Vic: But big companies, there probably aren't any that have been willing to admit that.

And on this scale, do it. And then it frees them up to do things like they now can pull your Gmail records to make search better. And I haven't tried that 'cause it makes me a little nervous. Yeah. But, but it, [01:42:00] but it's, it's really powerful. They know a ton about me and if I let them see Gmail and then the, um, the Google Meet thing, oh God, which we are gonna end with is, is game changing.

Like I, last week, okay, last week, I said to someone I hate meet, like, let's just use Zoom. Yes. I was, it's easier. I was on it with you. Yes, yes. And I have changed now because, because of the innovation that they're bringing and real time, like in the moment, translation from Spanish to English. It's just a game changer.

I mean, you, I don't care how long you study Spanish for me, be able to be able to speak English and someone else speaks Spanish and we fully understand each other on video is, is just a incredible, 

Marcus: uh, [01:43:00] what, what, how, how about basically AI having eyes and you talking to it while you're just like showing it stuff and it's like correcting you?

I have that 

Vic: in my phone right now. Yeah. I was using it yesterday and it is really good. I showed it my screen with Google Cloud 'cause I was frustrated with how bad Google Cloud is to the interface. Um, and it, it knows Google Cloud and help me is like a tutor. Um, it's incredible. Really good. And they have, you're right, they have the data with search, gmail, YouTube, they have all the engineers.

They have Waymo. As you get into the real world. And, and they now are willing to cannibalize their own business. And so it's gonna be fun. I mean, I, I think, uh, OpenAI also hiring Johnny Ivy is really good. Yeah. Yeah. There's gonna be a healthy competition, but it's in the US and it's gonna be great for [01:44:00] users.

Marcus: Yeah. No, and, and, and look what they did with IO this week literally, is exactly what I've been waiting for because I, I personally have not gone nearly as all in on AI as I should, because I'm like, it's just not enough in my tool set. Mm-hmm. Yet, you know what I mean? Yeah. Like my tool set is, as we've discussed, Google Workspace, slack.

HubSpot Asana, you know, like, this is what I use. Okay. And so I'm not swapping out what I use to all of a sudden be, you know, I just, I, no, I'm, I still am an old school Google searcher, not because I don't want the better results from, you know, pick, pick your LLM. Yeah. It's just my workflow is my workflow.

Right. Bring it to me. And that's what they did. Yeah. They brought it to me. And so now I'm like, well, I'm done. Like, that's it. I, I'm, now I can get productive with it. 'cause it's, it's in everything I use and it's basically best of breed. Yeah. [01:45:00] So now I have confidence that Google is going to keep up with best of breed.

Right. So I'm not, I'm not gonna play these games about like, 

Vic: you can build something and they're not gonna like, take enough money and you have to go do something else. Exactly. Yeah. 

Marcus: And, and dude, the stuff that I played with wasn't even in here. I mean like, like the Stitch with Google we were talking about like, like yeah.

Like UI interfaces. Have you played with that? 

Vic: I haven't played with it. Some dude. Oh my God. The backend is what's killing me. The UI is not. I mean, it's, it's, it's valuable, but I'm, I can't, I can't roll product. Listen, listen. Yeah. I know. I don't care about DUI. You're, 

Marcus: you're, yeah. You're, you're a white belt, you know?

Right. You're, you're a developer white belt. And, and it take every, this is why, it's why people, people quit their jobs and go to bootcamps 

Vic: Yes. 

Marcus: To get over this frustration that you're in right now. Yeah. So, you know, I, I, I wish I could feel bad for you, but I remember sitting in a dark room by myself, beating myself over the head with Apache, you know?

Yeah. With, 

Vic: with no support. Not the same support tools I have. No, 

Marcus: no. And talking to other programmers and them literally telling me, screw you. Like, learn it on your own. So I, I, I wish I [01:46:00] could feel bad for you, but I don't. Um, okay. So, uh, last thing here, uh, is, is the Google Live, live language translator, which is, I, I feel like this was the thing everyone talked about forever.

Mm-hmm. And this is actually going to change the world. 

Vic: Yeah. And I think it's directly applicable to healthcare. All these other things are derivatively applicable. Yeah. This, it's gonna have an effect. Yeah. But. Translation is really difficult in healthcare. And you have to find the, the one unit and wheel it over.

And now you can just pull your phone out and say, well, let's just jump on a meet. Yeah. 

Marcus: And it, it automatically does it. And dude, there are whole companies out here offering these translation services now. They've gone, don't exist. They're gone. Right. They're gone. They're gone. It's, 

Vic: it's just free. They're gone.

And that is great for the rest of us, but it's oof. It's changing the way I think about my investment, uh, plans. The whole, this whole thing is changing everything, right? Yes. I [01:47:00] mean, yeah. And it's very quickly, so we'll put it in the, in the show notes. I really think you should watch the entire 10 minutes, but this is like a two minute, um.

Example or demo of how the English to Spanish translation works. And it's, it's a woman that's speaking and it, it's her tone of voice. It's her inflection. It, it's not a static like robotic thing. It, it mirrors the natural person's pace and tone and inflection in a way that's just really compelling. Yep.

Marcus: Absolutely. Uh, so, man, uh, we're. Almost a, an hour and 50 minutes. So there was a lot there. You're out next week? Yes. Uh, I gotta find a guest host. We'll see who I can pick up. Yeah, I, I've tried twice and failed. Um, if I can't find anybody it'll just be me reading the news out. Okay. Um, but there will be a show [01:48:00] Promise, promise, promise there will be a show.

Uh, and thank you for pulling together a really good show. I hope you have a great time on your trip. 

Vic: Yeah. Great. I'll be listening. 

Marcus: Alright, man. Bye.