Why the VC Hype Cycle Always Gets It Wrong | VC Roundtable | E2307

Introduction and Panelist Backgrounds

• The venture capital roundtable discussion features a panel including Ailen Lee from Cowboy VC, Mike Maples from Floodgate, and Ben Larair from Lar Hippo, with the host Alex, to discuss various topics such as strong second quarter exits, the return of certain models, and the navigation of investing in another boom 10s.
• Ailen Lee's firm, Cowboy VC, raised a $230 million fund and a $140 million opportunity fund in 2023, and has backed companies such as Drata, Standard Colonel, and Benty, with Ailen stating that they are not currently raising for Fun Five and are still investing from Fund 4 2m6s.
• Mike Maples from Floodgate filed with the SEC to raise a $130 million fund in May, and has backed companies such as Last Energy, Hey Adrian, and Applied Intuition, with Mike stating that they are in good shape but unable to disclose further information 4m30s.
• Ben Larair from Lar Hippo closed a $200 million fund last year, and has backed companies such as Zipline, Paul Meadow, and Zen Business, with Ben and Ailen being noted for not being active on Twitter, unlike the host Alex and Mike Maples 6m15s.

Personal Habits and Social Media Usage

• Ailen and Ben discussed how they manage to not be active on Twitter, with Ailen stating that he used to be an active tweeter but stopped during COVID, and Ben explaining that he deleted the apps and hasn't gone back, instead focusing on other productive things 8m45s.
• The discussion also touches on the hosts' and Mike's tendency to rant about various topics on Twitter, with Mike joking that he takes out his frustrations on his children and colleagues instead 12m10s.

Current Business Cycle and Venture Capital Landscape

• The current business cycle is highly kinetic, with significant changes occurring within short periods, such as between Q1 and Q2, making it a good time to assess the venture capital landscape and recent liquidity 2m6s.
• Recent venture liquidity has improved, with VCs raising less money in the past couple of years due to a lack of exits, but the situation has gotten better lately, which may impact future fundraising plans and capital allocation 2m6s.
• Ben's fund is not currently raising money, having raised their last fund the previous year, and is in the early stages of deploying that capital, with a focus on long-term growth rather than short-term liquidity 4m37s.
• Large institutional LPs are more concerned with liquidity from massive funds, such as those invested in SpaceX, Stripe, or OpenAI, rather than the smaller returns from Ben's fund, which allows him to focus on long-term investments without significant pressure from LPs 6m15s.
• Alen notes that the improved liquidity, such as the potential distribution of money from investments like SpaceX, may lead to LPs reinvesting in a diverse range of funds, both large and small, which could be beneficial for the venture capital industry 9m30s.
• The discussion touches on the concept of the denominator effect, where the appreciation of existing investments can lead to an over-allocation to venture capital, and how the return of capital to LPs may help them rebalance their portfolios 11m15s.

Bending Spoons IPO and M&A Activity

• The current situation in the venture capital market is being compared to the "21 denominator effect", where paper gains are hoped to turn into real gains with more staying power, 10s.
• Seed funds have more exit optionality and can proactively take advantage of it in ways that larger funds cannot, with one example being the ability to return liquidity to investors, such as the $350 million returned in the last two years, 42s.
• The Bending Spoons IPO is seen as an encouraging sign, as it provides a vehicle for older companies to exit, and its business model involves acquiring and transforming non-AI native companies, 2m6s.
• The Bending Spoons IPO priced at $29 per share, valuing the company at around $18.5 billion, and its financials show a company in good health, with doubled revenue year-over-year and positive operating and net income, 2m6s.
• Bending Spoons has acquired several older companies, including AOL, Evernote, and Vimeo, and it is seen as a potential vehicle for providing liquidity to old unicorns from the 2000 era that are struggling, 2m6s.
• The return of M&A activity is expected to provide more exit opportunities for pre-AI companies, which are currently trading at low multiples, 2m6s.

Private Equity and Exit Strategies

• Founders Fund is mentioned as a larger fund that will likely receive significant returns from its investment in SpaceX, highlighting the difference in scale between larger funds and smaller seed funds, 42s.
• The discussion touches on the topic of private equity firms and their potential to acquire companies, with Bending Spoons being mentioned as an example, and how this trend may continue in the future, with some firms potentially following a rollup strategy 10s.
• Evernote is brought up as an example of a company that has recently increased its prices, and it is questioned whether this will lead to user churn, with the user in question being undecided on whether to continue using the service 42s.
• The conversation then shifts to Ignite, a company that was backed by Floodgate and sold to private equity for $1.5 billion in February of the previous year, with the sale being seen as a good move in hindsight given the current state of SAS multiples 2m6s.
• The topic of private equity or non-IPO exits for portfolio companies is discussed, with the question being raised of whether companies that are not growing quickly should be encouraged to look for such exits, or if it would be better to hold on and wait for multiples to rise 4m30s.
• The philosophy that companies get bought, not sold, is mentioned, and it is stated that the job of venture capitalists is to always try to figure out ways to create liquidity for their portfolio companies, regardless of whether or not there is pressure to do so 8m10s.

Challenges for Older Companies and Investor Engagement

• It is challenging for companies to decide when to sell, even if they are not performing well, and this decision is often influenced by the presence of motivated founders, unfair data advantages, and a large customer base, which can be leveraged to reimagine the company's direction 10s.
• Some companies from past generations may still have potential, but they need to adapt to the current market, which can involve significant changes such as introducing new products, replacing talent, or completely redefining their business model 42s.
• The current investment landscape is characterized by large funds focusing on finding the next trillion-dollar company, leading to a lack of attention and support for older companies, which can result in dysfunctional boards and a lack of engagement from later-stage investors 2m6s.
• As a result, early-stage investors are having to re-engage with companies from 8-12 years ago to help them get back on track, which can involve taking a more active role in the company and pushing for significant changes to ensure the company's survival and potential for growth 2m6s.
• When it comes to liquidity, it is essential for companies to take serious offers from outsiders seriously and consider them carefully, as these opportunities may not come often, and the first offer is often the best one, according to Eric Hippo's philosophy 4m30s.
• The lack of engagement from later-stage investors can lead to orphan companies, where CEOs may prioritize valuation over active board members or experienced investors, and this can be exacerbated by turnover at investment firms, making it challenging for companies to receive the support they need 6m30s.

Market Conditions and Capital Raising

• Investors build their reputation by being there for the companies they invest in through both good and bad times, and this is often demonstrated by how they handle downturns, which is a key factor that founders consider when asking for references 10s.
• The current market situation, with concerns about data center financing and a potential economic downturn, has led some companies to try to raise as much capital as possible, which can be a double-edged sword, providing a large war chest but also potentially leading to a lack of feedback from the market 42s.

Company Pivots and AI Adoption

• Some companies, like Mutiny, have successfully pivoted to become AI-native, which involved significant changes, including cutting staff and rebuilding their product suite, and this pivot has been successful, with the company now selling its new product 2m6s.
• Forming a Delaware CC Corp can be an important step for new companies, as it provides a real identity, including an address, domain, website, email, and phone number, and companies like Northwest Registered Agent can facilitate this process 4m10s.
• The ability of pre-AI companies to execute a successful pivot to become AI-first companies is challenging and depends on various factors, including the customer base and the problem being solved, but some companies, like Intercom, which became Finn, have been successful in making this transition 6m6s.
• The success of a pivot to an AI-native company also depends on the customer's trust and willingness to adopt new technology, and companies like Mutiny have been successful in leveraging AI to support their customers, such as sellers, in preparing for and building relationships with leads 8m6s.

Startup Growth and Venture Capital Expectations

• The concept of growth in startups involves a combination of ambition and acceptance, where companies are entitled to burn venture capital if they can create enough growth and category dominance to justify it, but if not, they may be better off focusing on being a profit-first company 10s.
• A company called Keep Safe was mentioned as an example, where they decided to operate under the rule of 70s, aiming to grow 70% a year if they were at break-even, or having 30% margins if they were growing 40% a year, and this approach allowed them to become profitable and distribute dividends to their investors, including Floodgate, which invested $1.5 million and received over $10 million in dividends 42s.
• The stages of a startup's growth include starting from 0 to 1, getting product market fit, growing from 1 to X, achieving predictable growth that justifies burn, and eventually reaching profitable growth and decline, and it's the venture capitalist's job to help founders locate where they are in this sequence 2m6s.
• The growth curve for startups has changed, especially with the impact of AI, and now founders need to demonstrate faster growth to raise venture capital, with a potential growth curve of one to five or one to four and a half, and then five to 20, which is a higher bar than the traditional triple triple double double rule for enterprise software 4m30s.
• This new growth curve may prevent capital from flowing into certain types of businesses that want to tackle harder problems or enter industries with more difficult sales cycles, which could be detrimental to the ecosystem 6m40s.

Changing Investment Strategies and Fund Sizes

• The current venture capital landscape is forcing money into companies that are solving short-term problems, resulting in a focus on quick revenue and easy growth, rather than investing in more challenging and potentially groundbreaking ideas 10s.
• This approach is frustrating, as it creates a gap in funding for truly innovative and difficult projects that could lead to significant returns and a competitive moat, but are not attractive to larger funds like those on Sand Hill Road 42s.
• The trend of consensus seed rounds being done at high valuations, such as $50, $60, and $70 million, is also concerning, and may be indicative of a larger issue in the industry 2m6s.
• The "rule of 70" is mentioned, which refers to the idea that companies need to demonstrate certain growth metrics, such as 5x or 4x growth, in order to be attractive to investors, and this has changed from the previous "rule of 40" 4m10s.
• The idea that only companies with instant takeoff and quick growth are attractive to multi-stage funds is changing what venture capital firms can invest in, and creating a challenge for firms that want to focus on early-stage investments 5m20s.
• Raising more money is not seen as a solution to this problem, as it would require a significant change in strategy and focus, and may not be the best use of resources, with one fund manager noting that their fund size is their strategy 7m30s.
• The importance of focusing on talent and early-stage investments is emphasized, and it is noted that managing a large fund with billions of dollars is not the goal, but rather to focus on what the firm does best, which is early-stage investing 9m40s.

Capital Efficiency and Fundraising Advice

• The importance of being cash efficient is emphasized, and startups are advised to only take on as much money as they really need, doing forecasting and modeling to get it right, in order to avoid not raising enough capital or giving up too much of the company 42s.
• A trend is noted where companies aren't needing to raise quite as much money as they had in the past, and founders are cautioned to be careful when raising capital to avoid having to go back for more or taking on venture debt 1m5s.

Fund Size as a Strategic Decision

• The concept of fund size being a strategy is discussed, with the idea that a fund size is a commitment to LPs about what the largest exit will be, and that the power law is real, meaning that the largest exit will be a multiple of the fund size 4m30s.
• Two types of projects are identified: "hot projects" that are loved by multi-stage firms and may not have momentum but have potential for huge upside, and "weird projects" that are not on the radar of multi-stage firms but can still have significant exits 6m15s.
• The example of Anthropic is given as a "hot project" that was not done at a cheap price early on but still had a huge upside, and the example of Smarterdx is given as a "weird project" that exited for a billion dollars 8m10s.
• The idea that different strategies are needed for each type of project is discussed, with the need to build relationships with founders and count on multi-stage firms to derisk hot projects financially 9m40s.

Unconventional Projects and Venture Capital Strategies

• To succeed with unconventional ideas, it is necessary to be prepared to go it alone or gain enough momentum, as the Silicon Valley echo chamber may not provide support, and this approach is similar to venture capital in the 80s or 90s 10s.

Board: A Case Study in Creative Innovation

• Lar Hippo backed Board, a digital board game company, which has a physical product that is doing extremely well and has gained popularity among people, including some of the participants who have purchased and used it 1m4s.
• The company was founded by Brin Putnham, who previously built Mirror, a workout device that was sold to Lululemon, and Board allows users to create their own games and physical pieces, which could help get people and kids off screens and promote collaborative play 2m6s.
• The usage data for Board is impressive, with people using it regularly, and the company is working on allowing users to make their own software, which could lead to more innovative and interactive games 3m30s.
• Children's games are a category that is currently out of favor, but some investors, such as USV, which is based in New York, have shown interest in the space, and Brin Putnham has the qualities that are attractive to multi-stage investors 5m30s.
• The discussion highlights the importance of creative thinking and funding for innovative ideas, even if they are not currently in vogue, and some investors are glad to see companies like Board getting funded 7m10s.

Large Seed and Series A Rounds

• The current venture capital landscape is characterized by extremely large seed and series A rounds, with companies such as StarCloud, General Intuition, Scale Cognition, and Scout AI raising $100 million or more, which does not match the traditional understanding of these funding stages 10s.
• These large rounds are often referred to as seed or series A rounds because they are the first or second institutional rounds, but they do not align with the typical expectations for these stages in terms of valuation, metrics, and future funding rounds 2m6s.
• Many new companies are raising significant amounts of money, with some founders deciding to raise $20 million just a few weeks after starting their business, and the ecosystem is evolving rapidly with numerous competitors and changing market conditions 2m6s.
• The high valuations and large funding rounds can create pressure to spend heavily on tokens and other expenses, but the cost of these tokens may decrease as open-source models improve, potentially reducing the need for large budgets 4m30s.
• Companies that raise large amounts of money at high valuations will face significant expectations for traction, customers, and revenue quality in their next funding rounds, and founders need to be aware of the challenges and risks associated with these high-stakes funding rounds 6m20s.
• The current market dynamics are characterized by "king making," where prominent investors or firms back certain companies to signal to the market that they are the leading players in a particular category, but this strategy does not always guarantee success 8m40s.

Market Dynamics and Future Outlook

• The venture capital market is currently in a phase where companies that have raised large amounts of money are not yet facing significant challenges or collapses, but this will likely change in the next 12 to 36 months as the market becomes more discerning and separates successful companies from those that are not 11m30s.
• The creation of companies worth tens of billions of dollars in a short amount of time will inevitably lead to companies that are also worth tens of billions of dollars going to zero, which is a natural consequence of the speed at which these companies grow 10s.

Historical Context and Lessons from the Dot-Com Era

• The big exits in the dot-com era, such as Amazon and Google, are often remembered, but most people who got rich during that time did so by exiting in a window of time between late 1998 and early to mid-2000, and examples like Mark Cuban's Broadcast.com illustrate the importance of timing in achieving a successful exit 42s.
• Raising a large amount of money in a seed round can limit a company's optionality, and historically, no company that raised over $100 million in its seed round has gone on to have a greater than $10 billion exit, with the largest seed round on record with a exit of that size being $21 million for a company called Whiz 2m6s.
• The venture firms' strategy during the dot-com era was to figure out which companies were real and which were not after the market crashed, and many companies had to give back the money they raised or shut down because they could not possibly live up to their valuation, even with perfect execution 4m10s.

Generational Wealth and Capital Raising Mistakes

• Creating generational wealth is often misunderstood, and having $10 million can be considered generational wealth, rather than needing an excessively large amount of money, and positioning oneself to profit in a variety of scenarios is key to achieving this goal 6m20s.
• Startups may be forced to raise capital early due to high expenses, including token budgets, and not just because they can, and it is a combination of both being forced to meet expenses and making a mistake by getting ahead of themselves too soon 8m30s.

AI Infrastructure and Investment Opportunities

• The current ecosystem of AI is exciting for investors and founders, with a lot of infrastructure, security, and other areas that need to be built, and companies like Etch, Light Matter, and DG Matrix are raising large amounts of money to work on specific areas such as transformer-specific AS6 and solid state transformers 10m50s.
• The conversation touches on the current hype surrounding data centers and AI compute, with companies like Bloom Energy and Micron benefiting from the increased demand for power and memory, 10s.

Consumer-Focused AI and Founding Trends

• Ben, who is more consumer-focused, is still searching for a differentiated application layer boom on the consumer side, and is open to finding companies that can provide something exciting, but is not impressed by companies building on everybody else's infrastructure, 2m6s.
• Ailen shares an observation that the best companies founded in a particular year often do not match the hot theme of that year, citing examples such as Anthropic and Whiz, which were founded during the crypto and web three hype, 5m42s.
• The discussion highlights the importance of having faith and taking risks on companies that may not be immediately popular, and the value of backing founders who may not have the perfect pedigree, 8m10s.

Avoiding Overhyped Categories

• The conversation also touches on the strategy of spending time in university labs to find potential founders and companies, and the importance of not following the current hype, 10m42s.
• The question is raised about what categories are currently overhyped and may not lead to great companies in the future, with the goal of warning founders away from potentially unfruitful paths, 12m6s.

AI Validation and Trust in Workflows

• The importance of having a path to network effects or cumulative increasing returns is emphasized when investing in AI productivity or workflows, as most AI products lack this mechanism at their core design 10s.
• Drata is an example of a company that has grown quickly and is helping mid-market and enterprise relationships with compliance, trust, and visibility, and its evolution is focused on monitoring agents and their trustworthiness 2m6s.
• The concept of having a trusted third party is crucial, especially when it comes to sensitive data and business processes, as it is not advisable to let the current vendor or owner of enterprise workflows consume and control the data 4m30s.
• The idea of "acceptance AI" is introduced, which refers to the need for a credible and neutral third party to validate and certify the work generated by AI, much like an audit firm certifies financials, and this is where companies like Drata can play a significant role 6m40s.
• The potential for AI to create abundance in work products is acknowledged, but it is also noted that the focus will shift from the work generated to the work that is validated and trusted, and this is where the importance of a credibly neutral third party comes in 8m10s.
• The investment in companies like Drata and Octa is seen as a strategic move, as they provide a solution for the need for trusted third parties in the AI-generated landscape, and their role is expected to become increasingly important 10m20s.

Open-Source Models and Cost Efficiency

• The concept of a neutral and trusted entity is important, and what is scarce in the current landscape is correctness and proof of correctness, with a credibly neutral network effects scalable provider being a potential key to unlocking the application layer 10s.
• There is a trend of moving to open-source models, such as GLM 5.2, due to the government restricting access to the latest models from companies like Anthropic and Open AI, with startups considering rolling their own models or using existing open-source models to reduce costs and protect their data 2m6s.
• Startups are finding that open-source models like GLM can provide equivalent results at a fraction of the cost, making them more appealing, and allowing companies to be model-agnostic and not spend as much time fine-tuning, as the pace of innovation is rapid and fine-tuning can become outdated quickly 2m6s.
• The rapid pace of innovation in the field means that even if a company fine-tunes a model, a new and improved version will likely be released soon, making it a challenging and potentially wasteful use of time and resources 4m30s.
• Some portfolio companies have considered using open-source models but have decided against it, realizing that it may not be the best use of their time and money, and instead focusing on other ways to benefit their customers 6m20s.
• From an enterprise perspective, companies are building multimodal models and trying to avoid being beholden to a single model, with the long-term goal of reducing token prices, and generalized models are expected to improve over time 8m10s.
• The fact that open-source models are improving is a concern for companies like Anthropic, Open AI, and Google, as they may not be able to charge high prices indefinitely, and are likely to move further into the application layer, making it a challenging space to invest in 10m0s.

AI Decision-Making and Business Models

• The concept of the "end of decisions" by Maurice Rosen suggests that high-level decisions can be made possible with AI, and the most expensive models will have a real expansive market for a kind of decision-making that is not yet fully reliant on AI 10s.
• The idea is that AI can function as a solver for domains that have historically been too qualitative for software, and the incremental or marginal intelligence gain from a new frontier model version can be incredibly valuable for businesses 2m6s.
• The business model of using AI for high-level decisions makes more sense than using it for tasks like checking email or preparing drafts, and companies that use AI to think in terms of ever-improving compounding loops can gain a competitive advantage 4m37s.
• These companies, referred to as "AI pill" companies, use the best models to gather customer feedback, come up with new product ideas, and AB test different things, but they can also capture and transfer knowledge with cheaper models 6m15s.
• The process of turning a deep work discovery into a deliverable involves progressing down the ladder of model expense, and while some companies may not be capable of building the necessary routing mechanism and collecting context, others may be able to buy the necessary infrastructure 9m20s.
• The use of open source models can be adequate for certain aspects of a product or service, and companies will have to decide what aspects require frontier models and what can be solved with open source models 11m30s.

Infrastructure and Model Routing

• The development of infrastructure for routing and evaluation will be an important area for companies to focus on, and some companies will help with building this infrastructure, allowing others to focus on their core value proposition 13m10s.

Regulation and Ethical Considerations in AI

• The discussion revolves around the role of venture capital firms in the development and implementation of AI technology, with concerns raised about the defensibility of certain business models that rely heavily on AI, but do not own the routing, build the model, or have control over customer data 10s.

AI Integration in Business Operations

• Applied Intuition is cited as an example of a company that has successfully integrated AI into its business operations, creating a real-time performance feedback system that allows for fine-grained analysis and implementation of effective management strategies 2m6s.
• Bedrock Robotics is mentioned as another company that is working on a related concept, developing technology for the digging industry, which is seen as a defensible and innovative approach due to its focus on a specific and underserved market 4m30s.

Government Regulation and Global Competition

• The conversation also touches on the topic of government regulation of AI, with concerns expressed about the potential for over-regulation and the impact on the competitive posture of the US with China, particularly in light of recent developments involving major AI labs and the Trump administration 8m40s.
• The difficulty of evaluating the effectiveness of government policies and the actions of major AI labs is acknowledged, with a recognition that the situation is complex and still unfolding, making it challenging to determine an optimal strategy or assign blame 10m50s.

Historical Parallels and AI Risks

• The development of nuclear weapons and the concerns of scientists who built them are mentioned as a historical example of the need for discussion and consideration of the implications of emerging technologies, such as AI, and the importance of being prepared for potential nefarious actors who may misuse these technologies 10s.
• The current pace of technological advancements, particularly in AI, is noted to be rapid, with countries like China making significant progress, and it is emphasized that the rest of the world is not stopping, unlike during the Manhattan project when the United States had a significant lead 2m6s.

Crunchbase and Competitive Intelligence

• Crunchbase is discussed as a company that has raised several rounds of funding and has access to a lot of proprietary and private company data, which is valuable for venture capitalists and others looking for competitive intelligence and information 4m37s.

Public Perception and AI Discontent

• The rising discontent amongst the populace against AI is acknowledged, and it is suggested that the tech industry needs to take proactive steps to address this issue and get on the right side of public opinion before it becomes an electoral issue, with examples of data center protests being cited 8m14s.
• The negative view of AI by people outside of the industry is highlighted, with friends and acquaintances of those in the industry often being terrified of AI, and it is noted that there is a narrative that some companies, like Open AI, are seen as the "empire" in the way they are perceived by the public 10m45s.
• The issue of government oversight and regulation of AI is touched upon, with the statement that the government may not be trusted to know how to monitor and regulate AI effectively, and that figuring out the rules and guidelines for the use of AI models is a significant challenge 12m28s.

Economic Inequality and AI's Role

• The current economic situation is compared to a cold war, with a growing wealth gap that is worsening by the minute, and it is unlikely that AI will improve this situation in the short or medium term 10s.
• The share of labor compensation as a percentage of GDP has fallen sharply since the 1950s, from the high 60s to around 57, which is considered the root of much discontent 42s.
• There is no clear solution to address the issue of sharing economic gains, and attempts to implement measures such as a billionaire tax may be seen as band-aids or punishments rather than a genuine solution 2m6s.

Regulation of Social Media and AI

• The lack of a natural home for free market capitalists to make a common-sense argument for their views is a concern, as the left and right are becoming more polarized, making it difficult to have adult conversations about the right answers 4m10s.
• The need for regulation of social media is highlighted, particularly in retrospect, as the lack of oversight has had negative impacts on a generation of kids, and the ramifications for AI are even more grave from a security perspective 6m20s.
• The challenge of regulating social media and AI is significant, and parents are left to deal with the consequences of lack of oversight, such as trying to limit their children's access to platforms like Snapchat 8m30s.

Education and AI in the Post-AI Era

• The concern is that many people lack basic skills such as reading and math, and providing them with access to powerful tools like AI during their learning years may not encourage them to develop these skills, and this is a concern for the post-AI era 10s.
• Despite the challenges, there is a long-term optimistic view that technology will continue to improve things, although there may be some setbacks along the way, and the goal is to ensure that future generations are not negatively impacted 1m30s.

Closing Remarks and Guest Information

• Mike can be found online at M2JR on X and his firm's website is www.floodgate.com, and he is investing in companies that focus on acceptance AI, which ensures the correctness of work rather than just generating more content 4m30s.
• Ailen Lee can be found on X and LinkedIn, and his firm cowboy.vc is a generalist firm that invests in companies with founders who have valuable insights, and they are open to investing in various areas 5m20s.
• Ben can be found on LinkedIn, and his firm lurhippo.com is also a generalist firm that looks for great people and founders to invest in, and they prioritize finding talented individuals early on 6m10s.
• The discussion concludes with a positive note, expressing gratitude to the guests, including Mike, Ailen, and Ben, for sharing their insights, and the host, Alex, thanks them for coming on the show 7m30s.