42 – Surprising Jobs Report | First Crack in Regional Banks | Lilly Should be in The Magnificent 7 | Tenet’s Strong Results | Cyber Threats

Vic: [00:00:00] I’m excited to talk through this. We, um, I don’t know. It’s been a busy week. Lots going on. I feel like, uh, I’m having trouble keeping up with all the stories. So good to digest everything.

Marcus: Uh, it’s. We’re going to start with the jobs stuff, but, um, I just get this like calm before the storm feeling. I think it’s a little bit of a PTSD from last year when, uh, SVB came out of nowhere and it kind of feels like it’s been a little calm.

Marcus: January was a little tough personally, and not just for me, I’ve talked to a lot of people that just had. A lot of stuff going on in January. So now they’re, they’re kind of getting their act together in February and it feels like, Ooh, man, we, we, we might be, you know, we got the, the primary coming in March, right?

Marcus: Primary is coming in March. That totally, that totally changes everything. As soon as that’s over, then it’s like [00:01:00] convention season and. Bunch of other shit.

Vic: Are you ready to start talking about that? I do not want to talk about politics. It’s so sad. And just,

Marcus: well, we’re definitely going to see the Biden administration, um, touting a bunch of stuff and talking about a lot of, a lot of stuff.

Marcus: So one way or another, we will be talking about it. Yeah. You know, I hate, I hate politics. I mean, it’s, it’s the

Vic: two least popular candidates in a long time running against each other. Biden and Trump. I don’t think I’m alone in saying I don’t want to eat the way they, one of them.

Marcus: No, you would not be alone.

Marcus: You would not be alone in that. But there’s

Vic: something about, I’ve been trying to do research around. Monetary policy stuff for a long time. There’s something around March and September. There’s some reason that things get, uh, more likely to run into trouble in March and September. I don’t exactly know why, but I’m with you.

Vic: I, I feel like I’m, uh, this March I’m kind of nervous about, but we’re not there [00:02:00] yet. No, we’re not there yet. We’re not there yet.

Marcus: Uh, 42 and it’s time to dig in.

Marcus: All right. So first thing we got a jobs report and you sent me this link and I read it and I was like, I have no idea where there’s jobs, these jobs are coming from. So the U S economy added 353, 000 jobs in January. I think the main thing was, well, first of all, the Dow Jones estimate was 185, 000 last.

Marcus: Episode of health further. We were talking about all the layoffs and this jobs report says that there were 74, 000 new jobs in professional and business services. Now is that 74, 000 jobs from people that were previously laid off and they found a new place to land? Like what, where are these jobs?

Vic: I have no idea where the jobs are.

Vic: I don’t, I mean, do you believe this number? I believe that the [00:03:00] people collecting the data are well intentioned. I don’t think they’re intentionally filing incorrect information. But I agree with you, I don’t know companies that are hiring at that kind of pace double what’s expected. Healthcare is healthcare was the second biggest and healthcare has been looking for workers and, and wants to keep hiring workers.

Vic: Now we’ll talk about some providers later. Um, but the overall economy, I feel like on, on balance, I hear more layoffs than New hiring plans, so I just don’t get it.

Marcus: And especially professional and business services. Like, that’s where I’m just like, huh? So, I mean, I know that there’s tremendous demand for accountants.

Marcus: We know that because, you know, they’re, they’re bills every year now for audits and tax are going through the roof. So that sucks. Um, but I’m trying to think about what other category are you hearing about tremendous demand for [00:04:00] professional and business services labor?

Vic: I mean, the only thing I can think of is there’s a lot of, um, gig economy, part time jobs, sort of, uh, not full time salary jobs.

Vic: I don’t really know how they count this. I think any job counts, even if it’s not full time. Hmm.

Marcus: Okay.

Vic: But it does not make sense to what I’m seeing out in the overall, like the general economy. I was very surprised.

Marcus: Yeah, so anyway, I feel like this is something we need to get an intern on. Like, like pull this report apart a little bit because I cannot make, I just can’t, I can’t make sense of it.

Marcus: Um, I mean I’m happy to see that there are a lot of jobs out there. That’s, that’s great. Yeah, that’s a good thing. Um, I, I just couldn’t make sense of it.

Vic: Yeah, and then Chairman Powell, uh, so that came out Friday, I think it was Friday, Chairman Powell, I think, sort of quickly [00:05:00] rushed around and got himself on 60 Minutes just to say, like, even though the jobs report was hot, we’re still, like, steady as she goes, uh, he’s, you know.

Vic: Maybe not taking a victory lap, but saying that the soft landings in sight, and I’m hopeful, but, but the next story makes me worried.

Marcus: Well, he addressed the next story. He talked about bank failures, and he did say he thought there were going to be, uh, Likely some smaller regional banks that would probably still fail, but generally speaking He thought they had the situation in hand.

Marcus: He wasn’t committed to that, but he said he thought that bank failures were mostly Under control and that you know, if something needed to be done, they would step in and do something

Vic: Yeah, that mean no matter what he has to say that well, he has to

Marcus: say that no matter what well That’s what you want to hear.

Marcus: That’s what I want to hear Uh, you know, especially as we roll into next march But what I don’t want to hear is that New York Community Bank Corp, the bank that bought Signature Bank, uh, [00:06:00] lost 44 percent of its value, and their floating rate notes fell to 87 cents on the dollar. Now, you dug into this story a little bit more than I did.

Marcus: Um, the obvious thing one might, one might look at is say, okay, well, they bought a failing bank with a bunch of bad assets. Maybe they didn’t place enough back to the Fed in the, in the discount window. So, And now they’re just holding a bunch of bad stuff, but you yeah, the story that they’re

Vic: putting out is

Marcus: Signature Bank

Vic: is Signature Bank.

Vic: We bought a bunch of stuff that helped the U. S. economy. And then two things that clipped us over. I think the 100 billion in asset mark, which has. Brings many more, uh, regulatory scrutiny. And then they sort of imply that a lot of those assets weren’t, weren’t great. But when I really looked into it, there only were three loans that were bad and were, were really the cause of all of [00:07:00] this.

Vic: And they didn’t come from Signature. And their commercial lease, the commercial buildings. Right. In New York City. You know, I’m not surprised, I don’t think anyone’s surprised that a commercial building in New York is. Not a good loan anymore. And so the, the worry, I think the reason the debt’s trading down, the stocks training, everything’s trading down and

Marcus: the regional bank index is down too, because

Vic: why not?

Vic: I mean, there’s a commercial lending to big cities. And it really has nothing to do with Signature Bank and their problems a year ago, nor does it have to do with whatever extra scrutiny comes when you’re over 100 billion.

Marcus: So reading this article from MarketWatch, it says that New York Community Bank Corp has 73 percent of its loan portfolio tied to real estate.

Marcus: Following the acquisition. So we know signature bank was a pretty big real estate bank. Um, but I’m sure that they, [00:08:00] they were already a pretty big real estate bank, which is probably why they bought them because they knew that every bank is

Vic: real estate,

Marcus: especially regional. Yeah. Um, but 73 percent that’s big.

Marcus: I mean, I think most regionals are north of 50, but usually not 73%. So that’s very, very, very heavy concentration. Um, the New York real estate, commercial real estate market challenged, obviously a ton of building has happened there, not just in Manhattan, but all over Brooklyn and Queens, a lot of skyscrapers being built, uh, now with the rates where they are, the loan to value just doesn’t work anymore time to reprice all that, you know, all that building, um, I mean, the way we use

Vic: it.

Vic: Real estate assets in big cities like New York, but, but like Chicago, Atlanta, Boston, San Francisco, LA is, is different. We, we don’t, we don’t need as many large, you know, 50 story office buildings, and we need more, um, home offices or [00:09:00] neighborhood places where you can co work. And so I just think this, the structural real estate market is, is, needs to evolve.

Vic: But the banks that are holding these loans. They’re, they can’t move that quickly.

Marcus: It’s a lot of confusing storylines happening at one time. Um, yeah, there’s all

Vic: these jobs, but that’s what I’m saying, right?

Marcus: We got all these jobs. We got these companies now saying, screw you. If you don’t come back to the office, you don’t have a job.

Marcus: We’ve got all these layoffs happening. It’s like, I cannot tie these different macro trends together. There was all, they’re all just happening in parallel and they do not make sense. Lined up next to each other. The only one, the only thing I can say that makes sense about this bank, uh, value, uh, decline is we’ve been saying for nine months now.

Marcus: Really, ever since SVB happened that there’s more of this on the way and that as long as the rates stay high, this is eventually going to happen to be [00:10:00] repriced. So we knew it was going to start happening. This is probably, unfortunately, the first of several stories we’ll hear over the next couple of quarters.

Marcus: That’s like this because there’s no way the rate’s going to decline. Enough or fast enough to bail out these banks can’t

Vic: there’s too many refinances that have to happen too much too much volume. Yes. Yeah, have

Marcus: to happen now.

Vic: Yeah, I think the layoff and the forced return to work no more remote work. I think those are two sides of the same coin.

Vic: I think a lot of companies. Like I was looking at UPS, they’re they’re one of the ones that are forcing every management employee now has to show up at work five days a week. And I think that’s sort of twofold. One it, it encourages people to get back in the office and probably the most senior people.

Vic: It’s just a comfort thing. I’m not sure there’s product, whether it’s productivity or not. I think people like to see workers in the office working around, but I think it’s [00:11:00] more of a, um, a way to, uh, kind of do a layoff without announcing a layoff, right? Cause some people won’t, they’ve moved away from the office in Atlanta.

Vic: They can’t come to work five days a week. They moved to Boulder.

Marcus: And

Vic: so I, I think it’s kind of a better PR way to. To do a layoff and it kind of self selects where you get people that are more dedicated or whatever.

Marcus: Anyway, uh, watch this space. The commercial real estate is finally, uh, hitting the headlines, uh, unfortunately in the form of bank failures.

Marcus: I mean, you know, the, the problem with this stuff is that it’s just so all of a sudden, right? I mean, you don’t hear like whispers. It’s just hits the headline. Volume jumps off a cliff and, uh, then it just starts to roll, you know, and you start to hear about more and more and more that are getting swept up in it.

Marcus: You know, often one thing to think about is a lot of these banks, uh, didn’t go into this commercial real estate by themselves. You know, they syndicated a lot of this debt. [00:12:00] So who else is holding some shares of this bad paper? Um, It’s, uh, I think we’re at the beginning circling back to the Medicare story.

Marcus: Um, you know, we talked about the bad rate news in 20, in 2023 for 2024. We talked about, uh, Cigna selling off their entire Medicare unit, uh, Health Spring, we talked about Humana and the remarks from their C suite, uh, particularly their CEO, Broussard. About, you know, the expectation that for 2025 and 2026 will continue to see more of the same and that they may have to raise rates.

Marcus: They may have to adjust benefits. Um, so we talked

Vic: to Emily about the demographics shifting,

Marcus: right? That’s right. That’s right. And also how if you don’t have control of a pharmacy, you really can’t make the model work. Um, so modern healthcare did a pretty good job. Did a follow up to sort of everything that’s been happening in the MA space, focusing on the fact that if you look across all of the different MA [00:13:00] providers, uh, it is likely that there’s going to be some, some benefit cuts following, you know, this, uh, this rate reduction.

Marcus: So we, we, we talked last episode about the increase in rates. That’s going to get passed on to seniors. Now we’re talking about the cuts also, uh, coming to the benefits. That makes sense.

Vic: Yeah, those are, those are. Related things, right?

Marcus: Right. Um, that that makes sense. I didn’t think they were going to be able to actually raise the rates enough, uh, to continue to get the buy in for the specific kinds of plans.

Marcus: They were trying to get buy in from, especially with seniors that are mostly fixed income. Um, you know, whether it’s social security or pensions or something like that. I think they

Vic: want to keep a free plan too. So they change the plan design, make it not as favorable and then offer a A better plan design, but you gotta pay for that.

Marcus: That’s right. Uh, in this article, this modern healthcare article, they, they lay out Medicare Advantage enrollment for 2024. Uh, they do have a footnote here where they’re talking about Aetna, which is far and away the leader in, uh, Medicare Advantage enrollment growth year over [00:14:00] year, uh, because they’ve got a co branded plan with Alina Health.

Marcus: And so I think a lot of those lives kind of come from that co branded plan. Uh, but the three big, uh, winners in Medicare Advantage enrollment for 2024, 2024. Etna, Humana Health, uh, Etna, UnitedHealthcare, and Humana. So Etna registered 533, 000, uh, new members, UnitedHealthcare, 149, 000, and Humana, 118. After that, you have alignment with a small bump.

Marcus: And basically after that, everyone else lost, uh, enrollment and, you know, you. You put that those losses in enrollment along with the MLR boost, and I think you’ve got a bunch of programs that are just underwater. We already knew bright health was struggling, but, you know, um, just seems like Emma’s is, uh, bad days ahead, certainly for 2024 and potentially going forward.

Vic: Yeah, the small, smaller plans. I think have a lot of challenges in front of them. So Clover, Bright Health, groups like that. [00:15:00] Um, and then there are some in here that really are Medicaid. Centene. Centene and Molina are both, I mean, they have some Medicare Advantage, but their primary business is, is Medicaid and that’s a good space.

Vic: So they may be losing a few lives, the Medicare Advantage, but I don’t think it’s the primary driver. Yeah.

Marcus: Yeah. I think that’s right. And

Vic: then Cigna sold their business. So they lost some lives, but they, you They were exiting.

Marcus: That’s right. Uh, press release that came out on January 31st. Uh, we’re reading this from the HHS website.

Marcus: CMS released their proposed payment updates for 2025 for Medicare Advantage and Part D programs. So, uh, I think this, this was kind of a, a mixed story here. The, the average increase rate, uh, is 3. 7 percent up from the 2024 rates. So this is not the final rule. This is the proposed. I think the final rule goes in April.

Marcus: First, I think is when it, when it comes in, but this is a 16 billion bump from this year, 3. 7 percent just above the current mark of inflation. So slightly [00:16:00] better than inflation, but I think mostly flat from what was already a down projection in 2024. So better than what was expected because we’re coming off of a serious bear case, but not enough to save the, to save the Medicare advantaged market.

Vic: Yeah, I think it was. Yeah, I agree. It was better than expected. I think, um, you know, it’s a, it’s a lifeline to a group of companies that are really struggling.

Marcus: It’s basically hang in there. Yeah, you know, it’s not, oops, sorry, we’re going to, you know, bring all your money back. Um, it’s certainly not that and, and this, this doesn’t have anything to do with the star ratings, uh, you know, assessment models.

Marcus: It’s just the basic model for, you know, what they’re going to pay.

Vic: Yeah, I mean, I think the the federal government is not going to abandon Medicare Advantage, right? So there’s going to need to be three, four, five platforms. We just talked about this really three big [00:17:00] ones, United, Aetna, and Humana. And then there’s other sort of regional ones that are that are interesting and so they’re going to keep them alive.

Vic: They’re going to keep it going. If you’re big enough, you have enough scale. You can operate really well. It’s probably a slowly declining. Business over the next 5 to 10 years, not super exciting, but I think I think that will keep them alive.

Marcus: Another big part of the Biden administration’s health agenda. I think they’re going to be pumping this up big time over the course of this election.

Marcus: So get ready to hear a lot about this after March 5th. They have capped out of pocket costs as part of the Inflation Reduction Act. They’ve capped out of pocket costs at 2, 000 for people with Medicare Part D. So that’s another challenge for those that are supporting Medicare Part D, especially if you don’t have your own in house pharmacy and you can’t sort of really control that formulary.

Marcus: Um, but that’s a that’s a good headline, uh to share with senior citizens, which is a really important demographic for the voters, right? so, [00:18:00] um, they They spent a lot of time talking about the part D programs in that cap of 2000 in this, in this press release.

Vic: Yeah. And I don’t know. That that that was news.

Vic: I mean, I think it’s just like campaigning stuff. They’re campaigning, but it’s not anything new in this in this release.

Marcus: No, it’s campaigning. It’s campaigning for sure. So we’re going to we’re going to see in here a lot of that we’ve been laying out there. They’re a campaign agenda. So we were talking about Milena.

Marcus: So Molina beat their q4 estimates and delivered lower medical costs higher premium. So great job by Molina and generally speaking. It does seem like Medicaid. Is a high opportunity space if you’re specialized in it.

Vic: I think that’s right. It’s, um, it’s a better space, children and poor families. Are going to be needed to be covered forever, and they don’t have the same significant medical expenses like the [00:19:00] seniors do not that there aren’t any, but but it’s not the same volatility and spend.

Vic: So, yeah, they, uh, they reported earnings yesterday. They beat and they, I think they’re doing pretty well.

Marcus: Well, I mean, I think this is a really big deal because the thing to always watching Medicaid is. Right. I mean, it’s a, it’s a high volume, very low margin business. And for, you know, a payer at the, at the highest level, you want to look at their MLR and they were able to beat the analyst estimates, uh, on their MLR of 90 percent coming in at 89.

Marcus: 1%, and now they are saying they expect it to be for the year, 88. 2 percent versus the, uh, analyst’s estimate of 88. 4%, you know, at scale, That’s a lot of money.

Vic: Yeah,

Marcus: you know, every one of those percentage points is a lot of money. And, um, that’s, that’s really impressive. I think there’s a massive opportunity out there for people who can figure out how to, uh, deliver high quality [00:20:00] Medicaid services and recognizing that sort of, you know, when I say high quality, I mean, relative relative relative.

Marcus: You know, delivering high quality Medicaid services at lower costs. I mean, that is a, that’s a, that’s the business. That’s the opportunity. And, um, as a country, we certainly need it. We, we, we need companies to be totally focused in on, on that segment of the population and on that payer model. And this is, I think this is great news.

Vic: Yeah, that’s right. They, they’ve done a good job. I mean, I think they’re regulatory. Capped at 85. They can’t get below 85. So yeah, 90 and then this year, I think they’re going to be down at 88. That’s pretty good. It’s 9 billion. So every percentage point, every basis point, there’s a lot of money. Exactly.

Marcus: Exactly. Uh, and then switching over to CVS health, um, CVS, they beat estimates, but Outlook for the overall year. Uh, they cut, I think the combination of just a dodgy outlook for retail. Um, they’ve, they’ve got a decent size, uh, uh, Medicare advantage book. We just talked about Aetna sort of having the most [00:21:00] enrollees.

Marcus: So I would imagine they’ve sort of repriced everything for the year and said, listen, you know, we’re going to have some higher medical costs as a result of that. So it’s kind of a tale, two cities between Molina and CVS health here. They did beat estimates, but their price, uh, their stock price took a beating on that, um, That that that bearish outlook for the year.

Marcus: Yes,

Vic: I mean, I give CBS credit for the strategic effort and trying to turn the ship from all retail. To more of a health care company, but it’s still turning and they still have a lot of work to do. Yeah.

Marcus: And it didn’t help that they got the Medicare Advantage, you know, bad bag handed to him too. Right. I mean, obviously that I think they probably did not expect the turn in rates to be as sharp as it was when they decided to do that co branded plan with, with a line of health.

Marcus: Right. So, um, kind of a string of bad luck here. For them, but look, they’re a large enough platform. They’ll figure it out. They’ve, they’ve acquired some, some pretty, uh, some pretty good assets over the last two years. So, you know, they, they [00:22:00] deserve and should get more time to, to figure it out.

Vic: Yeah. Yeah.

Vic: They’ll get more time. And the, the retail assets and the Medicare Advantage assets are hard to work through. I mean, a lot of retail space that I don’t know how valuable it is.

Marcus: Yep. Uh, on the, on the farmer side of the ledger. Yeah. The story from wall street journal. I love this, this, this headline, why Eli Lilly deserves to unseat Tesla among the magnificent seven.

Marcus: Um, what a headline. I mean, first of all, for those who don’t know the magnificent seven, uh, largely group of, uh, tech stocks, um, Apple, Amazon, Meta, Nvidia. Um, Google, Tesla, and Netflix. Is that, is that right? Is Netflix in the, in the Magnificent

Vic: seven? Probably. I don’t know.

Marcus: The first six are right for sure.

Marcus: Yeah, definitely. And, uh, and I think, Oh, Microsoft. That’s it. Microsoft. I thought you said Mike. I don’t know. Yeah. Anyway, that’s my name is in there.

Vic: Everyone likes to hate on Elon Musk. Well, I don’t think it’s just that

Marcus: I think [00:23:00] it’s like Tesla is starting to get evaluated as a car company. Yeah. And they’re starting to be compared against the other car companies in the market who have competitive, uh, you know, products and they have, you know, Rapidly lowered their prices year over year.

Marcus: So they’re sort of devaluing the product. So, you know, all those things should go into a reevaluation of the EPS. And also like they have had a ridiculous multiple on that company for a very, very, very long time. And now it’s starting to look like unless they expand their product lines into something that, you know, They’ve got some incredible core technology.

Marcus: So the question is, can they expand that into product lines that do not, uh, require you to get in and drive it? You know what I mean? Because if so, okay, that’s great. But as long as everything is being packaged as a car, it’s gonna be some real limitations to that. Um, on the other side, we’ve got Eli Lilly that is actually expanding.

Marcus: Um, so Obviously, the GLP [00:24:00] stuff, that’s been fantastic for them. So, uh, both Lillian and Novo Nordisk have had a tremendous year as a result of those bets. But, you know, we’re watching Eli Lilly expand really beyond pharma. Yeah, they went

Vic: with their direct platform, which is brilliant.

Marcus: That’s exactly right.

Marcus: Um, they are, they’re, they’re stepping into their strength as a brand, I think, and look, we got to also acknowledge in a time where we’ve had really bad, uh, PR for large parts of pharma, um, you know, starting with all the stuff with the opioid stuff. And then I think the next wave really came around the, um, mRNA vaccines and, you know, not, not necessarily the initial release of them, but like the incessant pushing of them, you know what I mean?

Marcus: And like. Like in the heat of the moment

Vic: at the, at the emergency, okay, you get a pass, but now trying to push it this fall is, you know, too

Marcus: much. That’s right. That’s right. And Lilly is kind of avoided. They’ve [00:25:00] avoided all of that. Right. And so, you know, they’ve, they’ve picked a set of diseases that are chronic, are really problematic for the American population, and they’ve, they’ve hit it big with this GLP one thing.

Marcus: And now they’re. They’re sort of taking that, that pretty good brand in the pharma space and going direct to consumer. And to me, that’s a digital health play. So that that moves them out of being a pure pharma company, moves them into digital health. So I actually thought this headline was, was pretty, uh, pretty prescient and, and something we should actually be, Looking at and taking seriously, um,

Vic: and as healthcare investors, I’m excited to see, you know, either in a healthcare company or, you know, a new one in the magnificent seven.

Vic: Yeah. Healthcare company, a proper healthcare company doing well and getting that attention.

Marcus: Yeah. Great. Very, very cool. Very cool. Uh, Now let’s talk about another company in the magnificent seven, uh, Amazon. So Amazon announced layoffs. Uh, they’ve been announcing layoffs. Like every couple of months, every couple of months.

Marcus: Yeah. A lot of them were [00:26:00] happening in, in AWS or, you know, various parts of the business, the, you know, the retail marketplace, but this was, this last round was, was inside of their medical division. So it was inside of one medical as well as their pharmacy division. Um, modern healthcare did a pretty good job.

Marcus: You know, decent story of what different analysts have said who have been tracking Amazon. You know, they went, they hearkened back to Haven. Uh, you know, they’ve, they’ve said, they’ve sort of questioned the strategy here. Do they have a cohesive strategy? Are they just acquiring a bunch of assets? Um, what, what, what are your thoughts about like, I mean, the layoff to me is not that meaningful because I trust Amazon.

Marcus: It’s a couple hundred people. That’s right. The number of people doesn’t matter. And also they can be very. They can be very strategic when it comes to their layoffs. So I don’t, I don’t obviously want to see this as like a retrenching, but how are you feeling? It’s, it’s, it’s February 8th of 2024. How are you feeling about Amazon and where they stand today from a healthcare perspective?

Vic: I think, um, the, the article we will post it, it was a pretty good summary of [00:27:00] what they have been up to or the last. Maybe decade, several different acquisitions, joint ventures and things that really haven’t manifest like they had predicted at the time. And yet I think Amazon is just a machine and there’s this thing of just like they’re going to keep battering on the walls of healthcare.

Vic: They have plenty of money and they’re going to keep trying different things until something breaks through. And they’re persistent and they got a lot of data on a lot of people. Including me, and they put the consumer first. And they keep trying to figure out how can we deliver really excellent service, great experience in healthcare at a cheaper price.

Vic: At the day, that’s a positive thing. I think our industry has to watch that and respond. But the fact that they are [00:28:00] struggling with one medical and haven’t quite figured it out yet. Gives us another few quarters, but I don’t think it’s a I don’t think they’ve stopped I think they laid off a few hundred people, but they’re just gonna like I don’t know It’s like Alabama football lost people to the draft like okay, but they’re gonna reload for next year It’s not that’s how I think about it.

Marcus: Yeah, so I guess my question is are they actually struggling with one medical? I’ve never heard anyone who uses one medical say anything other than amazing things about it Everyone I know who uses OneMedical loves it, right? So, there may be some level of integration they’re trying to do in the business.

Marcus: Like, I don’t know what these layoffs actually represent. Well, they

Vic: tried to bring OneMedical to all of Prime. Well, it’s not everywhere. It’s not in Nashville. So, they can’t actually do that, right? That’s what I mean. So, they couldn’t, they tried to scale it and it didn’t really take off. I think like they had mapped out.

Vic: Yeah. Because it, They didn’t have the, [00:29:00] the people on the ground. That’s right. Yeah. The thing about healthcare that, you know, is our opportunity but we have to be fast at responding is we have some time because you have to, you know, lay hands on a patient and treat them. And you can do some things over telemedicine and virtually, but not everything.

Vic: And so I think that it’s difficult to virtualize healthcare. And so Amazon has had trouble with that.

Marcus: Here’s a question for you. What kind of conversations do you think Amazon has had with Epic?

Marcus: And do you get why I’m asking this?

Vic: I

Marcus: don’t know that they’ve had conversations with

Vic: EPIC. Okay. So maybe,

Marcus: so let me, let me unpack it more. Yeah. Let me, let me, let me, let me try to, let me try to take you someplace reasonable. One Medical is a primary care business. Yeah. Primary care [00:30:00] is great, but if you’ve got something really going on, you’re going to get referred.

Marcus: Yeah. And once you get, maintain visibility into what’s happening, once they get into the path of the specialty, you, you sort of lose track of what’s happening. Yeah. Right? Um, so you lose that customer data piece and you lose that ability to be customer obsessed because everything’s now happening. Yeah. in some black box that you can’t see anymore.

Marcus: Um, one medical has partnered with several health systems. Um, the most recent was Hacksack Meridian, but I think there have been others that they’ve, that they’ve partnered with because most health systems cannot execute the. The primary care walk and they want their referral business, but they want the referral business.

Marcus: That’s exactly right. And I think truthfully for one medical to really be able to deliver. They have to have a health system partner wherever they are. I think otherwise they’ve got that disconnection [00:31:00] from a data consumer obsession. Tracking experience perspective. That makes Amazon, Amazon, right? Amazon has all the data to your point.

Vic: They know every book I’ve read so they can recommend the next thing on Kimball.

Marcus: Exactly. Yeah. So, you know, we were talking about how the Epic lockout is a problem for startups, but I feel like the Epic lockout is a problem for Amazon, right? If Amazon is to actually be able to deliver on healthcare, I’m sorry, but you still need The health system, like this is, this is the tricky thing, right?

Marcus: You still need the health system and health systems have given it to Epic. Yeah. You know, privately held company and was in Madison, Wisconsin, that is super anti all things, uh, VC and Bay area tech and all these other kinds of things. So it, it just feels like. That is still the, [00:32:00] the, the final frontier for so much of this retailization of healthcare, consumerization of healthcare is that at the end of the day, you have anything real that happens.

Marcus: You got to get referred to labs. You got to get referred for x ray. You got to get referred for whatever, you know, we want to dig into that a little bit more. Let’s let’s, let’s get your blood work looked at by someone, you know, some specialist, that’s a health system. At the end of the day, that’s a health system and does one medical have the ability to integrate and keep that total closed loop situation.

Vic: I just don’t know if they do. They don’t right now. They don’t. The thing that I am concerned about, but it hasn’t happened yet is that one, like you say, one medical and maybe three or four other platforms are beginning to aggregate The primary care across the country. Yep. And [00:33:00] I don’t know how many Hackensack Meridians.

Vic: You would need, say, five, I’d say you have Hackensack in the New Jersey tri state area, maybe get something in California and get an asset in Dallas and one in Chicago, and you can put a center of excellence, and you don’t need the people to come in that often. I don’t think we need as many like tertiary acute care centers as we have.

Vic: And so over the next couple of years, the patient flow. If Amazon decided to, they could start funneling it to a small subset of five, eight centers of excellence. Staff them with really great docs in that thing. And they’re gonna need a EMR like system. But I [00:34:00] don’t know if they need to connect with the 700 epic installations.

Vic: I think they could do it with seven.

Marcus: I mean, I think you’re right, but they have to have a partner. In enough geographies for it to feel like something Amazon should be doing. Right. Like the, the idea that they’re only going to be in a couple of markets. I mean, whole foods. I remember when whole foods used to feel like a special thing, whole foods is everywhere.

Marcus: Now they’re everywhere. Right. And, and Amazon should feel like it’s everywhere. And right now one medical is not everywhere. It’s not here in Nashville. Right. So, so that just, just in terms of like brand affinity, The fact that Amazon, you and

Vic: I are not one medical customer because we can’t really use it in Nashville.

Marcus: Exactly. And that’s does have an impact on the way that I feel as an Amazon customer about Amazon and their health care stuff, right? It just, it just makes me feel [00:35:00] like, okay, you’ve only got it in certain markets. You don’t care about this market. Like it’s, it’s, it’s a weird, like brand association, like negative brand association thing.

Marcus: And I feel like this is one of those areas where. Because health systems are so fragmented, um, even if they were to partner with HCA, which would, which would, I think, be the

Vic: biggest, or maybe not the biggest, but one of the biggest,

Marcus: it would be a very big one, and it’s also non epic.

Vic: Yeah,

Marcus: right. So that’s, that’s why I kind of picked them.

Marcus: It’s very big, and they control their tech stack in a very clear way. So let’s say they partner with them. That one would make sense because you’re talking about a lot of great markets. Yeah, um, growth markets, markets where whole foods are also present. Um, and you could put the one medical, you know, sort of attached to it.

Marcus: I mean, HCA would have to decide to stop doing their care now business, I think. Um, and sort of decide this is, this makes sense for us and, and better to partner with Amazon, then, you know, try to compete with them with, with our care now platform, um, [00:36:00] which might make sense of

Vic: care now, as they want that further referrals.

Vic: Yeah, right. So if they got all the referrals from the whole one medical platform, I think, I mean, I don’t speak for anyone at HCA, but I think they would be happy with the referral systems. They’re not really looking for earnings out of, out of care now.

Marcus: Yeah. Okay. Really quickly, big disclaimer. We have no inside information.

Marcus: I don’t know. Right. We don’t know anything we’re talking about here. I’m making up

Vic: things about care now. Yeah. That’s my personal opinion without inside information.

Marcus: Yeah. Yeah. Okay. Well, look, I mean, I just, I think that, you know, There’s an interesting challenge. Um, these companies that are attacking the primary care side of things and don’t have a payer attached to it are going to keep running into.

Marcus: And I, and I think it’s, I don’t think it’s just Epic, but man, I think Epic’s a big, big part of it. And I think Epic’s a big, big problem for a lot of folks, for a lot of folks. Um, [00:37:00] because. You have to integrate with the health system in order to be a viable health care solution. You might work for millennials.

Marcus: That’s fine. Millennials don’t care about that. They don’t need to use health systems. They’re just sort of in and out primary care. That’s fine. But once you hit 40, once you have one chronic

Vic: disease, yeah. Right. So I have heart disease. And it’s managed, but, but I, I need to be monitoring my cholesterol, my blockages with a cardiologist, not a primary care, not like whoever shows up on the telemedicine call, right?

Vic: That’s not going to work. That’s not going to work. When I was 21 and I didn’t have a chronic disease. Now, if you have a chronic disease in 21, then you still need that, right? Once you have one chronic disease, and I forget the stats, but it’s like 80 percent of Americans. Have one or more. I think you have to have a relationship with a doc and like a longitudinal data [00:38:00] in order to get proper care.

Vic: Now,

Marcus: and ideally you need that integrated with your primary care physician too, because that’s the one who you’re going to see more regularly. Like, and they help you navigate the whole system. It’s, it’s

Vic: very complicated. I mean, we’re in the middle of it. I can’t manage my own stuff.

Marcus: Not only do they help you.

Marcus: You can’t do it without them. And I don’t mean you, you, you’re not smart enough. You can’t. You cannot get around a PCP and go direct to a specialist. Yeah. So it’s like help you sounds like a nice thing to do. No, no, no, no, no. They are the gatekeeper to the healthcare system. If you don’t have a PCP, you can’t just like, well, you, yes, you can’t, you can’t, who, who referred you?

Marcus: Oh, well, you’re not, you weren’t referred. Well, it’s not going to be approved by insurance. Yeah, you can’t, you need the PCP. That’s like, like, that’s, that’s the, that’s the, like, it makes a lot of sense to [00:39:00] want to start with the PCP because you are the gatekeeper and you’re the referral pattern. You control it.

Marcus: It’s not a nice thing you’re doing. You, you, you have control, but if you are an Amazon owning a one medical where data and the full consumer experience matters, once you refer off. And I’m like, I’m dealing with this right now. You know, once you refer off, if you, as the PCP are not managing, making sure the care protocol is consistent with all the specialists and you’re pulling that back in and you’re advocating for that person, Amazon, you’re.

Marcus: Your stellar brand is going to get pulled down by bullshit healthcare status quo. Yes, you know what I’m saying? Yeah, like, it’s, it’s, it’s not an, it’s not an Amazon issue. It’s healthcare status quo is so bad that the deeper you weighed into it, you actually like diminish your overall customer consumer brand promise.

Marcus: Right.

Vic: Yeah. And [00:40:00] I agree that, that Epic is a. Problem blocking problem for us, but I have confidence that it’s either going to be fixed with regulation or with technology or something. It can’t continue like it is.

Marcus: This is, this is the first you having faith in regulation and me being like, you’re out of your mind.

Marcus: Uh, okay, great.

Vic: Well, we, we, we, as the federal government and taxpayers below that created the whole EMR thing. So I think it’s going to eventually get,

Marcus: no one’s even tracking it. Well,

Vic: okay.

Marcus: I think they’re going to, they’re not publicly traded. They’re not publicly traded. So they lose, they fly under the radar of all that scrutiny.

Marcus: At the end of the day, it’s like, I look, I, it would

Vic: just open architecture. That’s what has to be pushed on just transparency, open architecture of [00:41:00] data. And we’ll see. I mean, I don’t, I don’t know. I, maybe I’m wrong.

Marcus: I, I wish I was not so skeptical of this, but yeah, I think we’ll have to see. But anyway, I’m glad we had that like little, it wasn’t so much a debate, but just exploration of like how we feel about how Amazon’s actually doing with this.

Marcus: Because I, you know, I think everybody is, doesn’t give them. Enough benefit of the doubt for like their strategy or, you know, doesn’t give them enough time. You know, the public traders are always going to talk about them. I think the issue is much more just fundamental blockages that exist in the healthcare system that are going to impair their ability to do healthcare at the Amazon standard.

Marcus: And I think every time they, they see that they’re like, uh, maybe we should pull back because I think that’s, you know, There’s a lot to lose here, trying really hard to do this in this industry that, you know, they’re, they’re, their expectations [00:42:00] are so low relative to our expectations that it’s hard to pull everything up.

Vic: Yeah. And so they take a, they take like a strategy that. Looks interesting. They throw a ton of money resources people time at it. They realize. Oh Gosh, it’s this is hard and we’re getting sucked into this quagmire of shit and then they pull back But they keep coming because I think it’s too much money.

Vic: It’s too much money. Yeah, and there’s too much opportunity And there’s a lot of problems to be solved And so I think six months from now, they’ll do something else And I just I think eventually Whether it’s Amazon, or Apple, or Google, or United, or someone. They’re going to push through and there’ll be a better system.

Marcus: All right. With that, we’re going to take a break. Let Doug share a little bit about Jumpstart Foundry. Come back and talk about, [00:43:00] Oh my gosh, control your phone, Vic. All right. Like I was saying, we’re going to let Doug talk about Jumpstart Foundry and

Doug Edwards: we’ll be right back. Thanks guys. For the opportunity to talk about our pre seed fund, Jumpstart Foundry.

Doug Edwards: My name is Doug Edwards, CEO of Jumpstart Health Investors, the parent company of Jumpstart Foundry. We’re so excited to be able to talk about, uh, early stage venture investing, certainly the need for us to change the crazy world of healthcare in the United States. We are spending 20 percent of our GDP, north of 4 trillion a year on healthcare with suboptimal outcomes.

Doug Edwards: Jumpstart Foundry exists to help us find and identify and invest in innovative companies that are going to make a difference in healthcare. In our country, every year, Jumpstart Foundry invests a fund, raises a fund and deploys that across 30, 40, 50 assets every year, allowing ease of access for our limited partners to invest, to help us make something better in healthcare.

Doug Edwards: Some of the benefits of Jumpstart [00:44:00] Foundry is there’s no management fees. We deploy all the capital that’s raised every year in the fund. We find the best and brightest typically around single digit percentage of companies that apply for funding from Jumpstart. And we invest in the most incredible, robust, innovative solutions and founders in the United States.

Doug Edwards: Over the last nine years, Jumpstart Foundry has invested in nearly 200 early stage, pre seed stage companies in the country. Through those most innovative solutions that Jumpstart Foundry invest in, we also provide great returns and a great experience for our partners. We partner with AngelList. To administer the fund, making that ease of access, not only with low minimums, but the ease of investing in venture much better.

Doug Edwards: We all know that healthcare is broken. Everyone deserves better come alongside us with jumpstart foundry invest in making the future of healthcare better and make something better in healthcare. Thank you guys. Now back to the show.

Marcus: All right. So continuing on talking about health [00:45:00] systems, uh, tenant, uh, what I think you and I kind of refer to them as like the number two.

Marcus: Yeah, in the for profit space, um, had certainly

Vic: publicly traded. Yeah, yeah, yeah, yeah,

Marcus: yeah, big for profit publicly traded, uh, had a great Q4. Um, so basically mirror image of the HCA results in terms of like what the headlines were.

Vic: Yeah, I mean, they had a great quarter, they’re getting more volume of patients, higher acuity patients, and they can hire people now.

Vic: Sounds like HCA. That’s a good, that’s a good setup. Yeah, it’s very much like HCA.

Marcus: Um, so not much to sort of talk about there other than hospitals are certainly rebounding. Uh, especially the high performing for profits with, you know, good payer mixes and good markets. They are, they’re definitely rebounding the pandemics over 2024 and, uh, Medicare

Vic: advantage.

Vic: You know, M. O. R. going up equals high acuity, 75 year old patients coming in to tenant and [00:46:00] needing significant surgeries. That’s right. Which is good for margins.

Marcus: And you can’t stop that right away. You know, you’re going to have, you will eventually pull back on, on, on the benefits and, and the coverage, but you can’t stop it right away.

Marcus: It’s just mostly going to pile up in losses for the payers and, and wins for the providers.

Vic: Yeah, I was talking about, uh, this with a friend of ours at Hedgeye, not Emily, but another guy named Tom. And it’s sort of like this, uh, Momentum thing in health care, once it gets going, you have several quarters of HCA tenants, all the all the profits, even the nonprofits, they’re going to start to get more patient volume, higher acuity.

Vic: Yeah. And it doesn’t turn on a dime on either direction.

Marcus: That’s right. That’s right. Uh, so we, we didn’t talk about this, but we’re actually shifting into a Novant story. Um, Novant acquired three hospitals from tenant and back in November. So Novant is, uh, a Carolina based, um, Health system, you know, pretty small compared to, uh, advocate, um, Atrium.

Marcus: Yeah, small, [00:47:00] but pretty well run. I mean, it’s small, but well run. Yes, but they’ve been there. They’ve had aspirations of growing. So they picked up three tenant hospitals and, um, in South Carolina. So, you know, they’re trying to build their footprint. Um, and then they went to try to buy some. Some hospitals from community health systems, um, in the North Carolina area, two hospitals and the FTC blocked them.

Marcus: Um, it was a 320 million proposed acquisition and, uh, yeah, they were blocked.

Vic: And this does not make sense to me. I don’t know how the FTC understands the nuance to say, we’re going to allow something in South Carolina and not in North Carolina. That doesn’t make sense. I don’t, I don’t think that they have that kind of like ability to squint and see how one is fair and one’s not.

Marcus: Yeah. I mean, they may have said, you know, we, we let the tenant one slip through and now we need to stop these guys before they [00:48:00] keep rolling stuff up. Um, there could be something about that. There could be something about recognizing that. If, if Novant continues to, uh, you know, clean up across the Carolinas, you’re really only going to have, uh, uh, advocate atrium and Novant.

Marcus: So there really will only be two players and in those two States, um, and maybe, maybe they’re trying to get out in front of that. Um, I don’t know. Uh, probably. Yeah. I mean. Yeah, for sure. Definitely. Yeah, that’s right. Definitely. Yeah. In Nashville area. I mean,

Vic: I think it’s, I mean, this is me being cynical about regulators now, but I’m just being positive a minute ago, but I think it’s simply Navant is headquartered in Charlotte and this is in the larger metro area of Charlotte and they don’t, they don’t like them acquiring assets in their home market.

Vic: That has nothing to do with it. It doesn’t make sense. And so we’re going to have a [00:49:00] struggling system that wanted to sell now just stuck. Doesn’t make sense to me.

Marcus: Yeah. Anyway, um, you know, more FTC blocking health system mergers, making health systems harder to operate. Um, Yeah, I mean, I don’t know what else to say, uh, more health system problems, uh, in Chicago area.

Marcus: I believe that that Lurie Children’s Hospital is part of the Northwestern system. Uh, I think it is, um, but they’re Lurie Children’s Hospital had a cyber attack. Um, it’s very large children’s hospital in Chicago and they had a cyber attack to shut them down for, for a day. They had to shut down all their digital patient records.

Marcus: Again, this is becoming far too common. Um, uh, criminal actors in this case, uh, back, back in November when Arden, uh, was hit, uh, apparently the, that was, you know, Russians, uh, that, that, that attacked them. [00:50:00] This is just becoming such a massive, massive problem for health systems, uh, their inability to protect themselves from cyber attack.

Vic: Yeah, it is. It’s a chronic thing. We’re, we’re seeing it accelerate. And it’s the main reason EPIC claims for being so closed down, um, because they’re, they’re don’t want to be open to anyone so that they can’t get attacked. But I think we have to figure out a way to protect the data and also allow for innovation.

Vic: Yeah, I mean, look. When we do it in banking, so like, I don’t understand why healthcare is that much different.

Marcus: Yeah, it’s, it’s, uh, it’s, it’s really troubling because I mean, if you, if you want to think about what is actually happening here, once the cyber attacks happen, these hospitals in an, in an effort to protect the data of the patients, right, [00:51:00] they just shut the systems down.

Marcus: So now everyone’s running around pen and paper and using their phones to try to keep operating. The business, but like E. M. R. S. Are not functioning and care quality cannot be good when an entire system is dependent on used to running an E. M. R. And then, and they can’t, um, so really, really, uh, I don’t know.

Marcus: We haven’t even gotten to the world where A. I. Is, uh, Is a factor yet, you know, from a social engineering perspective. And yeah,

Vic: it’s not slowing down. It’s

Marcus: going to get worse. Exactly. Um, there was a, we don’t have it for this show, but for front of ours, uh, Nick, he, he sent me a link to a CNN story that showed, uh, an FBI high ranking, uh, FBI agent.

Marcus: was talking to Senate during the budget hearings about the need to continue to invest in our cyber defense and was talking about how [00:52:00] China is focused on 2027. They’ve got sort of that year circled as a major year of that, that we, we interpreted that there’s going to be a lot of cyber attacks that are, that are um, uh, hurled at the United States.

Marcus: And if I’m remembering him correctly, he said, and I’ll, I’ll get the, the, the question The link to this, we could put in the show notes, uh, but I think he said they currently have us, uh, outnumbered 50 to one, uh, in terms of their resources and, and, and the assets that they’ve put towards, um, cyber attacks 50 to one today, we’re looking at potentially not continuing to, to invest at the level that we should.

Marcus: And AI is about to go online, you know, we already know that our democracy has been hacked, uh, by the Russians, you know, leveraging social media and, you know, everything that happened with Cambridge Analytica. So, it just feels like America created the internet, we’ve created all this technology, like, we’re the ones who put these EMRs online, and, you know, We’re not prepared to protect ourselves from [00:53:00] bad actors, you know, from outside of the country.

Marcus: These attacks, many of these attacks are not coming from inside the country. Um, and it’s just like you think about the fentanyl stuff, you know, how that stuff is coming on the shores. It’s like we’re being attacked in all these non military ways. Right. Just eroding, uh, the fabric of our country, uh, whether it’s, you know, bringing drugs in or, or, you know, flooding, you know, the minds of young people on tick tock.

Marcus: Yes, I said it, uh, or, you know, cyber attacking our hospitals. It’s just all these vulnerabilities in this hyper connected world. Um, it’s, uh, it’s really daunting.

Vic: Yeah, I agree complete. It’s very scary. And first of all, I think it’s much easier to attack than defend. And so well said, it’s, it’s a much bigger challenge to try to fend off all these attacks from unknown threat actors, right?

Vic: And I’m sure we have [00:54:00] people attacking, but not at the same scale, and we’re not trying to do harm in the way they’re trying to do harm, right? And then our society is based on civil liberties and freedom and allowing people. You know, for the most part, to go about their life and do what they want to do.

Vic: And that makes it very hard to defend.

Marcus: Yes.

Vic: Because you just, and I want to be able to open up my phone and get access to my healthcare records. But I don’t want anyone, you know, who’s not supposed to get it, to get it. And that combination of giving people like the right to complete freedom and open, open systems while also protecting it is just a huge challenge, but you’re right.

Vic: We’re not investing like we should. Yeah. And that’s a problem.

Marcus: Yeah, I mean, look, give me liberty or give me death. We value liberty over safety. Right. Not a question in America. And I think that’s [00:55:00] great. I think that’s great. Look, we’re talking absolute ideals here, right? It’s great. I don’t want to be safe but like locked up in my house.

Marcus: That’s not what I want for my life.

Vic: It’s great, and we invested a bunch of money in the Manhattan Project to build the atomic bomb. It’s great. Because we needed to have it first. That’s right. That, that’s right. This is the same kind of thing. We have to have more firepower than the evil groups around the world that don’t have anyone’s best interest at heart.

Vic: Yep. And I, I’m worried that we’re not investing in the same, the same percent of GDP or the same. Amount of brainpower effort that we were when we were really worried about, you know,

Marcus: World War. Yeah, World War Two. Yeah. Yeah. Okay Speaking of investment company called ambience health care. I mean talk about naming yourself what you do.

Marcus: Yeah ambience health care got 70 million dollars from open [00:56:00] AI and Optum ventures, but not just those Um, uh, Andrews and Horowitz was also in, uh, and Kleiner Perkins was also in. So I saw this, this was the series B funding round and based on everybody that was involved in it, I kind of turned to you and I said, okay, well, that’s it for ambience, uh, I mean, cause we know, uh, HCA has already placed their bet.

Marcus: Um, On this stuff, they’re partnering with a company. And I think it was a Microsoft based company that’s doing the ambient stuff. And now we’ve got OptumVentures and OpenAI and Kleiner and A16Z. It’s like, okay, great. I mean, probably not a space for a pre seed fund to be playing anymore.

Vic: I mean, in venture markets, it’s a power law, right?

Vic: So the, the big winner gets two thirds of the market, the second and third fight over 30%. And did nothing else. There’s another 5 percent that gets divvied up by a bunch of things that lose money. And you’re right. There’s already [00:57:00] two or three first movers that are really strong. And it makes sense. This is an easy use case.

Vic: That is really, everyone likes the docs like it, the health systems like it, the patients like it, everyone likes it, and it’s, it helps workflow. So it’s a, it’s a great use case and it is finished. I don’t know which of the two or three will win. It doesn’t matter. It doesn’t matter. One of them’s going to win.

Vic: It

Marcus: doesn’t matter. But, but, uh, please do not reach out to Vic or myself. Do not send us an

Vic: ambient AI

Marcus: thing. We will not be investing. And

Vic: for health systems that are listening. They should figure out which of these they want to pilot and, and pilot one of them. That’s right. These are the, these are the ones that are going to win.

Marcus: That’s

Vic: right.

Marcus: That’s right. Uh, no, no, we’re not going to throw more money at this problem. Uh, there are, there, there’s plenty of other problems to solve, right? It’s my favorite thing about healthcare. There’s so many things to follow, but, uh, to, to work on when you get people who don’t know the industry and they don’t know all this, the [00:58:00] niche problems that are multimillion dollar problems, by the way, um, they want to focus on things that are very obvious and act like.

Marcus: Nobody else has ever thought of them, right? And this to me is a perfect example. Anyone could think of, of how ambient technology could be really helpful in stopping doctors from looking at a screen and typing instead of actually looking at their patient and paying attention and watching the patient, you know, respond.

Marcus: So, this is so obvious and that’s why it’s being you know, funded by the biggest in the game.

Vic: Yeah, it is what it is. We invested in one in 2015. Yeah, it just was way too early, way too

Marcus: early. It’s way too early. The tech wasn’t there. Nobody believed in it. So, yep, that’s just kind of the way it is. All right.

Marcus: And then final story, um, uh, Google, uh, has replaced the brand name Bard with Gemini, uh, which sort of the, the fundamental name of their, their revolutionary LLM model. They’ve released ultra 1. 0 and they’ve actually rolled out a dedicated app on [00:59:00] Android, not on iPhone, um, on iPhone. They’re just rolling out an update to the Google app where you’ll be able to access, um, the, uh, uh, Gemini AI.

Marcus: I already have access to Gemini AI, so I’m looking forward to seeing what this does. What this update does and yeah, I have my

Vic: phone and this just came out today. I just saw it today, but I’m going to add it this weekend is play with. It’s not, not that expensive. So just see what it’s like.

Marcus: Yeah. Yeah.

Vic: So finally, Android users have a, have a tool to play with.

Marcus: Yes. Yes. This is why I have an Android backup phone so I can play with it at home. Um, but yeah, look, I mean, I think this is, this is a, this is a big deal. Um, not having a dedicated mobile app. Was holding Google back from being a serious competitor in the LLM space. Um, everyone got really excited about Gemini, especially the multimodal capabilities that, that they presented in the demo.

Marcus: And they said, ah, this is not real. This is not real well. It’s real now it’s released. It’s got a dedicated app and, uh, and look, they’re in the game. And I think that’s, that’s, uh, that’s really great. So

Vic: [01:00:00] yeah, Google has been behind, but there’s a ton of big brains, a lot of IP. I mean, they are going to. Be a player in this.

Vic: It just depends on like what format, where do they, where do they focus?

Marcus: Yeah. And look, I mean, they’ve only really been behind, we’ve talked about this. They’ve only been behind in the commercialization. They have not been behind in the underlying tech. Yeah. They’re they’re they let, they started. That’s exactly right.

Marcus: So, so now, you know, I just think as a, someone who has a Google one account and I use that personally for like my YouTube and, you know, things like that. Right. But then also. Uh, for all things jumpstart and even like my personal LLC, I mean, I’m a hundred percent all in Google workspace and you start layering on Gemini with all of the stuff I’ve already been building out in my Google workspace and my email.

Marcus: And do it in a, in a, in a way that’s, that’s safe across all the Google platform. I mean, yeah, [01:01:00] I, I, there’s not even a question, which one I’m going to use. Like seriously, if this, if this thing gets rolled out to go to Google workspace in an enterprise safe way, where all of my stuff stays in an isolated container, but I now have an LLM interface on top of it.

Marcus: Yeah. I’m not using chat GPT. I’m just telling you right now, like, why would I do that?

Vic: We already have all our stuff on Google drive. So, I mean, Google has been ahead on the intellectual property forever. It’s a cultural thing. They were not confident that the tech was ready. It was safe. It was whatever.

Vic: And they have a lot of people that work there in a, in a, in a big, a big and, you know, important culture and open AI is not that way. And so they’ve been, they caught it with a little flat footed based on that, I think, but they, they’ve sort of turned and coming.

Marcus: Agree. All right, man. Uh, good show that that’s, uh, right at an hour.

Marcus: Um, lots to cover. [01:02:00] And I think we did a pretty good job discovering, uh, some stuff about Amazon there in that conversation. That was, that was good.

Vic: Yeah. I mean, I think it’s always fun to like talk through these things and then there’s a. I don’t know, there’s like a little, um, thing I didn’t expect that ends up being what my takeaway is.

Vic: Yeah,

Marcus: yeah, exactly. Um,

Vic: are we interviewing anybody next week? I don’t know because, uh, we had the Pullman lineup this week and it got moved. Yeah, that was my fault. Yeah, but that might be moved to next week. I don’t know. All right. Well, we’re ramping up. It’s, it’s not quite at one a week yet, but by the, you know, by the first quarter, we’ll start having that.

Marcus: Yeah. Yeah. All right. Well, until then, yeah. See you soon. Bye.