1 00:00:02,720 --> 00:00:13,960 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News. 2 00:00:18,480 --> 00:00:22,400 Speaker 2: Hello and welcome to another episode of the Odd Lots podcast. 3 00:00:22,520 --> 00:00:24,919 Speaker 3: I'm Joe Wisenthal and I'm Tracy Alloway. 4 00:00:25,200 --> 00:00:28,000 Speaker 2: Tracy, I think one of the most interesting dynamics going 5 00:00:28,040 --> 00:00:30,800 Speaker 2: on right now is that you have a White House 6 00:00:30,840 --> 00:00:33,400 Speaker 2: and a lot of people in both parties, but specifically 7 00:00:33,440 --> 00:00:36,199 Speaker 2: the White House right now, that are very set on 8 00:00:36,720 --> 00:00:41,040 Speaker 2: reindustrializing manufacturing in the US. At the same time, actually 9 00:00:41,200 --> 00:00:45,240 Speaker 2: existing US manufacturers are talking about, Wait, everything you're talking 10 00:00:45,240 --> 00:00:47,519 Speaker 2: about is throwing our business into extreme chaos. 11 00:00:47,640 --> 00:00:50,519 Speaker 3: Yeah, and we've had a lot of anecdotal evidence so 12 00:00:50,640 --> 00:00:53,680 Speaker 3: far of this happening. So we've already mentioned at this 13 00:00:53,760 --> 00:00:57,120 Speaker 3: point the Dallas Fed Energy Survey and a bunch of 14 00:00:57,200 --> 00:01:00,720 Speaker 3: businesses in the oil patch saying that things are slowing down, 15 00:01:00,960 --> 00:01:05,319 Speaker 3: they're having difficulty planning for long term capital investments. There 16 00:01:05,400 --> 00:01:08,400 Speaker 3: was one anonymous company that basically said they were asked 17 00:01:08,440 --> 00:01:12,480 Speaker 3: by a Canadian client if they could move production to Canada, 18 00:01:12,600 --> 00:01:16,160 Speaker 3: which again seems to be the opposite of what you 19 00:01:16,200 --> 00:01:20,119 Speaker 3: would assume the Trump administration is trying to achieve here. 20 00:01:20,920 --> 00:01:24,960 Speaker 3: We've talked to Rian Peterson about factories slowing down production 21 00:01:25,160 --> 00:01:27,559 Speaker 3: and things like that. And I think the big question 22 00:01:27,640 --> 00:01:31,280 Speaker 3: here is, Okay, tariffs are on pause, but are we 23 00:01:31,360 --> 00:01:36,080 Speaker 3: going to see lingering issues, lingering uncertainty because the assumption 24 00:01:36,720 --> 00:01:40,520 Speaker 3: of business people is Trump could always turn them back 25 00:01:40,560 --> 00:01:43,160 Speaker 3: on he could always start threatening them. And then the 26 00:01:43,200 --> 00:01:46,400 Speaker 3: other thing I would ask is, there's actually so many 27 00:01:46,720 --> 00:01:49,160 Speaker 3: questions that you could ask about all of this. But 28 00:01:49,320 --> 00:01:52,280 Speaker 3: Trump keeps talking about how he wants to do both 29 00:01:52,560 --> 00:01:57,520 Speaker 3: basic industrial manufacturing in the US, but also every once 30 00:01:57,560 --> 00:01:59,520 Speaker 3: in a while he talks about, you know, doing really 31 00:01:59,840 --> 00:02:04,280 Speaker 3: advanced stuff, and he wants to do everything I guess, 32 00:02:04,320 --> 00:02:07,080 Speaker 3: and it seems really difficult to me to thread the 33 00:02:07,120 --> 00:02:11,760 Speaker 3: needle between like very expensive high tech stuff where you 34 00:02:11,800 --> 00:02:14,919 Speaker 3: have to pay people a lot, and then very I 35 00:02:14,919 --> 00:02:17,560 Speaker 3: don't want to say it's cheap, because factories still cost 36 00:02:17,639 --> 00:02:20,680 Speaker 3: quite a lot, but less expensive basic stuff. 37 00:02:20,720 --> 00:02:22,000 Speaker 4: I don't know. Here's the thing. 38 00:02:22,480 --> 00:02:24,600 Speaker 2: I want to set up a factory in the United 39 00:02:24,600 --> 00:02:26,560 Speaker 2: States that's at the cutting edge of production. 40 00:02:26,840 --> 00:02:27,560 Speaker 4: But some of the. 41 00:02:27,440 --> 00:02:29,600 Speaker 2: Tools I might need for my factory might be made 42 00:02:29,639 --> 00:02:32,080 Speaker 2: in Germany, or maybe they're made in China or Vietnam. 43 00:02:32,200 --> 00:02:34,680 Speaker 2: And this seems like an issue. A couple of days ago, 44 00:02:34,720 --> 00:02:37,320 Speaker 2: we had headlines a company called has, which I have 45 00:02:37,360 --> 00:02:39,040 Speaker 2: to admit I had not heard of. They make c 46 00:02:39,200 --> 00:02:43,079 Speaker 2: and see lathes talking about how they were like canceling 47 00:02:43,480 --> 00:02:46,480 Speaker 2: over time, pausing all hiring, et cetera. Anyway, remember we 48 00:02:46,480 --> 00:02:50,040 Speaker 2: were out in San Francisco and we visited Impulse Labs. 49 00:02:50,200 --> 00:02:53,120 Speaker 2: They make that amazing stove. We had this great steak 50 00:02:53,200 --> 00:02:54,680 Speaker 2: and boils water in like two seconds. 51 00:02:54,760 --> 00:02:55,639 Speaker 3: Oh, it was so good. 52 00:02:55,800 --> 00:02:58,360 Speaker 2: Like that stove seemed like one of those products that 53 00:02:58,400 --> 00:03:01,960 Speaker 2: I would expect to see on TikTok from a Chinese 54 00:03:02,000 --> 00:03:04,440 Speaker 2: propaganda video about how good they have it over here. 55 00:03:04,560 --> 00:03:06,840 Speaker 2: But it's actually an American company like that, I said, 56 00:03:06,840 --> 00:03:09,840 Speaker 2: think it actually exists here, and I kind of want 57 00:03:09,840 --> 00:03:12,040 Speaker 2: to know what building that stove is like in a 58 00:03:12,080 --> 00:03:13,119 Speaker 2: world of teriff. 59 00:03:12,880 --> 00:03:15,640 Speaker 3: Yeah, and looking back on it now that we have 60 00:03:15,720 --> 00:03:18,680 Speaker 3: Trump as president, there are a bunch of broader themes 61 00:03:18,720 --> 00:03:21,919 Speaker 3: that it definitely touches on. So it's an electric stove, 62 00:03:22,040 --> 00:03:25,639 Speaker 3: as you mentioned, electric battery in it. Yeah, electric versus 63 00:03:25,639 --> 00:03:28,280 Speaker 3: gas has been in the midst of the culture war 64 00:03:28,480 --> 00:03:31,640 Speaker 3: at various times recently. But then also it feeds into 65 00:03:31,639 --> 00:03:36,400 Speaker 3: green technology. We're not really certain how Trump feels about 66 00:03:36,440 --> 00:03:40,080 Speaker 3: green tech. He wants America to do cool stuff, presumably 67 00:03:40,120 --> 00:03:45,120 Speaker 3: make cool products, but does that include electric things, batteries, 68 00:03:45,240 --> 00:03:47,400 Speaker 3: green stuff? Again, I don't know. 69 00:03:47,720 --> 00:03:49,720 Speaker 4: Well, let's find out some more. 70 00:03:50,360 --> 00:03:53,280 Speaker 2: He cooked us an amazing steak several months ago, but 71 00:03:53,440 --> 00:03:55,800 Speaker 2: now we're not tager steak. We're talking about the reality 72 00:03:55,800 --> 00:03:59,280 Speaker 2: of us manufacturing. Back on the show, Sam Dimico, founder 73 00:03:59,320 --> 00:04:02,840 Speaker 2: and CEO of Impulse Labs. Sam, thanks for joining us. 74 00:04:03,000 --> 00:04:05,400 Speaker 4: Yeah, good morning everyone. It's been a fun week or so. 75 00:04:06,800 --> 00:04:09,600 Speaker 2: I'm enjoying it in the news business. If you're having fun, 76 00:04:09,640 --> 00:04:12,080 Speaker 2: I'm at least relieved that someone in industry is also 77 00:04:12,440 --> 00:04:15,800 Speaker 2: enjoying it. Let's start with this question. Listeners can go 78 00:04:15,880 --> 00:04:18,159 Speaker 2: back and check out our episode where we ate this 79 00:04:18,240 --> 00:04:20,560 Speaker 2: amazing steak, and like I said, you make this amazing 80 00:04:20,600 --> 00:04:22,320 Speaker 2: stove and it hits a battery in it and boils 81 00:04:22,400 --> 00:04:24,560 Speaker 2: water in two seconds and it will never burn an egg. 82 00:04:24,839 --> 00:04:27,440 Speaker 2: All this stuff, but just describe, like what do you 83 00:04:27,440 --> 00:04:30,520 Speaker 2: build here? And what are the inputs of the stove, 84 00:04:31,120 --> 00:04:33,400 Speaker 2: where do they come from? And then what do you assemble? 85 00:04:33,560 --> 00:04:35,400 Speaker 5: So this is a really good question because you'll you 86 00:04:35,480 --> 00:04:37,839 Speaker 5: might see how my brain works, because I'll like build 87 00:04:37,839 --> 00:04:39,960 Speaker 5: it up from the base lego layer up. I'll try 88 00:04:40,000 --> 00:04:42,080 Speaker 5: to avoid that because our listeners love this stuff. 89 00:04:42,160 --> 00:04:42,360 Speaker 4: Yeah. 90 00:04:42,440 --> 00:04:46,479 Speaker 5: Basically, think of this like you mashed a Tesla power wall, 91 00:04:47,080 --> 00:04:50,440 Speaker 5: so like a Tesla home battery product with an induction 92 00:04:50,600 --> 00:04:55,360 Speaker 5: stove with like a tablet computer, and then a bunch 93 00:04:55,360 --> 00:04:58,480 Speaker 5: of sensor technology that requires us to do custom ceramic 94 00:04:58,520 --> 00:05:01,880 Speaker 5: parts and other things that aren't in the normal induction 95 00:05:01,960 --> 00:05:02,920 Speaker 5: stove supply chain. 96 00:05:03,520 --> 00:05:05,200 Speaker 4: So that sounds like a lot. 97 00:05:05,279 --> 00:05:07,719 Speaker 5: And what that means is the surface area of the 98 00:05:07,800 --> 00:05:10,920 Speaker 5: types of stuff we touch as inputs is quite substantial. 99 00:05:10,960 --> 00:05:12,720 Speaker 5: It is probably the best way to put it. It's 100 00:05:12,760 --> 00:05:18,359 Speaker 5: like everything from lithium ion battery cells all the way 101 00:05:18,680 --> 00:05:22,000 Speaker 5: to those customer ceramic parts in our temperature sensor which 102 00:05:22,080 --> 00:05:26,240 Speaker 5: lets you hold exact temperature in the pan, to like chips, 103 00:05:26,279 --> 00:05:28,120 Speaker 5: some of which are made in the United States, but 104 00:05:28,760 --> 00:05:30,960 Speaker 5: most are not packaged in the United States, if that 105 00:05:30,960 --> 00:05:31,560 Speaker 5: makes any sense. 106 00:05:31,600 --> 00:05:31,800 Speaker 4: Yep. 107 00:05:32,279 --> 00:05:35,080 Speaker 3: So where are you actually getting these things from? Like 108 00:05:35,200 --> 00:05:38,600 Speaker 3: walk us through I guess the evolution of your suppliers, 109 00:05:38,640 --> 00:05:41,040 Speaker 3: because I imagine it must have changed a little bit 110 00:05:41,120 --> 00:05:41,599 Speaker 3: over time. 111 00:05:41,839 --> 00:05:43,880 Speaker 5: Yeah, so I'll go through kind of like the transition 112 00:05:43,920 --> 00:05:45,680 Speaker 5: of the company, because this is like key to kind 113 00:05:45,720 --> 00:05:49,160 Speaker 5: of understanding how to build complex hardware. There's an Elon 114 00:05:49,600 --> 00:05:51,840 Speaker 5: tweet I think it's actually a reply, but it's buried 115 00:05:51,839 --> 00:05:54,160 Speaker 5: in the replies, but basically says the factory is the product. 116 00:05:54,920 --> 00:05:58,919 Speaker 5: And this is incredibly true, where basically your supply chain 117 00:05:59,480 --> 00:06:01,960 Speaker 5: is how you build stuff. It's kind of like you're 118 00:06:02,000 --> 00:06:06,000 Speaker 5: picking a bin of legos effectively, and those legos may 119 00:06:06,040 --> 00:06:08,320 Speaker 5: mostly already exist, and you try to minimize the number 120 00:06:08,360 --> 00:06:10,640 Speaker 5: of new parts you have to make because like making 121 00:06:10,680 --> 00:06:12,960 Speaker 5: a new Lego brick is complicated and requires you to 122 00:06:12,960 --> 00:06:15,120 Speaker 5: make a new injection mold in that case. But if 123 00:06:15,120 --> 00:06:16,840 Speaker 5: you've got a bin of legos, and that bin of 124 00:06:16,920 --> 00:06:20,600 Speaker 5: legos is expansive and cheap, and then there's a lot 125 00:06:20,640 --> 00:06:23,000 Speaker 5: of experience with team knowing how to put those legos together, 126 00:06:23,480 --> 00:06:26,599 Speaker 5: like you have huge tailwinds and advantages. So basically first 127 00:06:26,640 --> 00:06:29,360 Speaker 5: year or so of the company, we essentially built prototypes 128 00:06:29,400 --> 00:06:32,039 Speaker 5: of like what we expected to need. And so the 129 00:06:32,080 --> 00:06:34,400 Speaker 5: example there would be like we built like a single 130 00:06:35,240 --> 00:06:39,080 Speaker 5: heating element temperature controlled stove prototype that ran off a 131 00:06:39,080 --> 00:06:42,039 Speaker 5: battery that we sourced from like some low volume battery 132 00:06:42,080 --> 00:06:45,320 Speaker 5: manufacturer or build ourselves. We needed to get the architecture right. 133 00:06:45,360 --> 00:06:47,560 Speaker 5: We needed to know how to build the product like 134 00:06:47,600 --> 00:06:50,039 Speaker 5: from a like it's almost like the specs you see 135 00:06:50,200 --> 00:06:52,719 Speaker 5: on like best buy dot com. You kind of needed 136 00:06:52,720 --> 00:06:54,960 Speaker 5: to figure out what those were and maybe some of 137 00:06:54,960 --> 00:06:57,320 Speaker 5: the high level stuff and also enough to tell like 138 00:06:57,360 --> 00:07:00,520 Speaker 5: your industrial designer and industrial designer is like the Johnny 139 00:07:00,520 --> 00:07:04,200 Speaker 5: Ive type character that like defines how the product looks 140 00:07:04,279 --> 00:07:07,120 Speaker 5: and feels and kind of like the interaction model and 141 00:07:07,120 --> 00:07:07,719 Speaker 5: stuff like that. 142 00:07:08,000 --> 00:07:09,640 Speaker 4: So we need to do that prototyping. 143 00:07:09,880 --> 00:07:12,160 Speaker 5: But then at that point we basically were like, Okay, 144 00:07:12,320 --> 00:07:14,800 Speaker 5: we know what we're going to make roughly, we don't 145 00:07:14,800 --> 00:07:17,080 Speaker 5: know how we're going to make it exactly. Let's go 146 00:07:17,160 --> 00:07:21,040 Speaker 5: start talking to what I call contract manufacturers to like 147 00:07:21,200 --> 00:07:24,680 Speaker 5: help us basically bring this thing to production. And we're 148 00:07:24,720 --> 00:07:28,160 Speaker 5: still like around twenty five people as a small team. 149 00:07:28,200 --> 00:07:30,040 Speaker 5: There's a couple of different ways to actually go and 150 00:07:30,080 --> 00:07:32,440 Speaker 5: design and build a product, and I think this is 151 00:07:32,480 --> 00:07:35,440 Speaker 5: something that is not well understood even by hardware founders 152 00:07:35,440 --> 00:07:38,720 Speaker 5: in many cases. So if you're a defense tech founder, 153 00:07:38,760 --> 00:07:40,640 Speaker 5: your options are cut out for you because you can't 154 00:07:40,920 --> 00:07:43,560 Speaker 5: go overseas and have a Chinese company or a cream 155 00:07:43,600 --> 00:07:46,960 Speaker 5: company or a Taiwanese company co design the product. 156 00:07:47,000 --> 00:07:49,440 Speaker 4: With you because that violet export controls. 157 00:07:49,640 --> 00:07:51,760 Speaker 5: So you see hardware founders talk about this, there's kind 158 00:07:51,760 --> 00:07:53,000 Speaker 5: of a I would I would almost call it like 159 00:07:53,040 --> 00:07:56,160 Speaker 5: a split between folks that can use the consumer hardware 160 00:07:56,440 --> 00:07:58,400 Speaker 5: supply chains and folks who can't. 161 00:07:59,000 --> 00:08:01,920 Speaker 4: And so base we had kind of a choice. 162 00:08:01,920 --> 00:08:04,960 Speaker 5: We'd go to like appliance contract manufacturer, or we could 163 00:08:05,000 --> 00:08:08,440 Speaker 5: go to a consumer electronics contract manufacturer. And we basically 164 00:08:08,440 --> 00:08:11,360 Speaker 5: realized it was easier to teach the consumer electronics guys 165 00:08:11,680 --> 00:08:13,920 Speaker 5: how to do the specific appliance stuff because a lot 166 00:08:13,920 --> 00:08:17,040 Speaker 5: of this faciliar plant stuff is handling large sheet metal 167 00:08:17,040 --> 00:08:19,240 Speaker 5: parts and like big boxes and stuff like that. 168 00:08:19,520 --> 00:08:20,200 Speaker 4: So we went to a. 169 00:08:20,160 --> 00:08:25,240 Speaker 5: Consumer electronics manufacturer and then effectively co opted their entire R. 170 00:08:25,160 --> 00:08:27,400 Speaker 4: And D team to help US co design the product. 171 00:08:29,120 --> 00:08:32,920 Speaker 5: But the advantage of this approach is that we got 172 00:08:32,960 --> 00:08:35,559 Speaker 5: to essentially co design it through their supply chain and 173 00:08:35,600 --> 00:08:38,720 Speaker 5: their existing supplier relationships. We did not have to boot 174 00:08:38,800 --> 00:08:41,319 Speaker 5: up that from scratch, which would have taken us I 175 00:08:41,360 --> 00:08:43,880 Speaker 5: don't know, fifty to one hundred people, because we would 176 00:08:43,920 --> 00:08:46,320 Speaker 5: have had, like, there's all these subdisciplines in hardware, and 177 00:08:46,360 --> 00:08:48,520 Speaker 5: even if you only need to fractionally use them, like 178 00:08:48,840 --> 00:08:51,320 Speaker 5: use zero point one percent of them or something like that. Well, 179 00:08:51,360 --> 00:08:53,160 Speaker 5: that would be one headcount if you did it in 180 00:08:53,200 --> 00:08:55,200 Speaker 5: the United States, or did it or even if you 181 00:08:55,200 --> 00:08:57,200 Speaker 5: did it in Mexico and just were going alone. And 182 00:08:57,240 --> 00:08:59,200 Speaker 5: so that's how we've actually been able to maintain a 183 00:08:59,200 --> 00:08:59,880 Speaker 5: really small team. 184 00:09:00,000 --> 00:09:03,400 Speaker 2: So I'm guessing the it sounds like the appliance manufacturer 185 00:09:03,400 --> 00:09:07,360 Speaker 2: I'm guessing is in China. Talk to us about what 186 00:09:07,480 --> 00:09:12,080 Speaker 2: is the You know, there is this existing manufacturing tech 187 00:09:12,120 --> 00:09:14,679 Speaker 2: supply chain in the United States, as you said, it's 188 00:09:14,679 --> 00:09:18,400 Speaker 2: centered around defense for good reason. You can't outsource that stuff. 189 00:09:18,880 --> 00:09:21,840 Speaker 2: Talk to us about that capacity that exists in the 190 00:09:21,920 --> 00:09:25,000 Speaker 2: United States currently or that could you know, like we 191 00:09:25,080 --> 00:09:27,960 Speaker 2: hear the Gundo and all of these defense tech companies 192 00:09:27,960 --> 00:09:31,040 Speaker 2: in southern California that are doing cool stuff. Talk to 193 00:09:31,120 --> 00:09:32,640 Speaker 2: us about like these different options. 194 00:09:32,840 --> 00:09:33,080 Speaker 4: Yeah. 195 00:09:33,120 --> 00:09:35,120 Speaker 5: So I'm a friend and investor with a number of 196 00:09:35,120 --> 00:09:37,840 Speaker 5: these folks. So it's actually really interesting to be like, look, 197 00:09:37,880 --> 00:09:41,560 Speaker 5: what they're doing is admirable, but the volumes here are 198 00:09:41,880 --> 00:09:44,880 Speaker 5: different by orders of magnitude. Okay, so let's actually put 199 00:09:44,920 --> 00:09:47,080 Speaker 5: startups on the shelf, because instantly the startups will need 200 00:09:47,160 --> 00:09:50,160 Speaker 5: like substantial public private partnership money to really scale, so 201 00:09:50,200 --> 00:09:52,000 Speaker 5: it's a volume and some of that stuff is actually, 202 00:09:52,200 --> 00:09:54,880 Speaker 5: to my knowledge is like potentially forthcoming, which is pretty exciting. 203 00:09:55,320 --> 00:09:58,080 Speaker 5: But I need capacity now, so where would I go 204 00:09:58,120 --> 00:10:00,440 Speaker 5: in the US to do it? And it's basically there's 205 00:10:00,480 --> 00:10:03,600 Speaker 5: a couple different categories of contract manufacturer in the United States. 206 00:10:04,080 --> 00:10:07,480 Speaker 5: The most famous ones are Jabel and Flextronics, and I 207 00:10:07,520 --> 00:10:09,640 Speaker 5: actually this is over ten years ago. I've worked with 208 00:10:09,679 --> 00:10:13,080 Speaker 5: Jabel on a project that was a I'll be ambiguous here, 209 00:10:13,160 --> 00:10:14,760 Speaker 5: but you can figure it out if you poke a bit, 210 00:10:14,760 --> 00:10:19,800 Speaker 5: but a ambitious ahead of its time augmented reality project okay, 211 00:10:19,840 --> 00:10:22,640 Speaker 5: but effectively like there was a decision to make something 212 00:10:22,679 --> 00:10:25,240 Speaker 5: like this in the United States. Also, Motorola successfully did 213 00:10:25,240 --> 00:10:26,760 Speaker 5: a bunch of stuff in the United States as well, 214 00:10:27,080 --> 00:10:31,040 Speaker 5: and historically always did. The issue is into the twenty tens, 215 00:10:31,040 --> 00:10:33,760 Speaker 5: and this must be a I think the Great Financial 216 00:10:33,800 --> 00:10:37,080 Speaker 5: Crisis was actually a much bigger story to this than 217 00:10:37,320 --> 00:10:40,200 Speaker 5: any sort of like China trade policy decision. It was 218 00:10:40,240 --> 00:10:43,400 Speaker 5: like the Great Financial Crisis plus China blasting through with 219 00:10:43,480 --> 00:10:47,880 Speaker 5: investment in manufacturing was the real story. But effectively, none 220 00:10:47,920 --> 00:10:50,160 Speaker 5: of these companies deal with startups anymore or if they do, 221 00:10:50,240 --> 00:10:51,679 Speaker 5: it's specific kind of thing. 222 00:10:52,559 --> 00:10:55,600 Speaker 3: So I remember when we were in San Francisco and 223 00:10:55,720 --> 00:10:58,440 Speaker 3: you were making that very very good stake for us. 224 00:10:58,880 --> 00:11:01,880 Speaker 3: We asked you about tariffs, right because they were already 225 00:11:02,120 --> 00:11:06,400 Speaker 3: floating around, given what was happening with election odds between 226 00:11:07,120 --> 00:11:10,640 Speaker 3: Trump and his competitor, and now here we are. 227 00:11:10,760 --> 00:11:10,920 Speaker 4: Well. 228 00:11:11,000 --> 00:11:13,559 Speaker 3: I think at the time we were talking about twenty percent, 229 00:11:14,360 --> 00:11:18,960 Speaker 3: and you seemed kind of like confident that you could 230 00:11:19,000 --> 00:11:22,160 Speaker 3: handle that. I think you said that that was your 231 00:11:22,200 --> 00:11:24,679 Speaker 3: assumption that we were going to have tariffs, and that 232 00:11:24,880 --> 00:11:27,440 Speaker 3: if they came online, you were going to be prepared, 233 00:11:27,480 --> 00:11:29,720 Speaker 3: and you'd already been doing some stuff to handle it. 234 00:11:30,640 --> 00:11:34,960 Speaker 3: I know what we've seen on China is dramatically higher 235 00:11:35,080 --> 00:11:40,120 Speaker 3: than twenty percent so far, but how well positioned do 236 00:11:40,200 --> 00:11:42,360 Speaker 3: you feel for something like that? 237 00:11:42,760 --> 00:11:44,880 Speaker 5: Yeah, So I have a funny story, is one of 238 00:11:44,920 --> 00:11:50,040 Speaker 5: our key suppliers cut prices enough to almost compensate for 239 00:11:50,160 --> 00:11:52,600 Speaker 5: these tariffs as it. So China's reaction to some of this, 240 00:11:52,679 --> 00:11:53,840 Speaker 5: by the way, is like I don't know if it's 241 00:11:53,840 --> 00:11:57,640 Speaker 5: state subsidy or like they're viewing this stuff as temporary 242 00:11:57,640 --> 00:11:59,680 Speaker 5: and like some of these let's call it well funded 243 00:11:59,679 --> 00:12:02,200 Speaker 5: companies is like, no, they can power through it and 244 00:12:02,200 --> 00:12:05,559 Speaker 5: not upset their existing supply relationships. But my sense is 245 00:12:05,679 --> 00:12:08,440 Speaker 5: like there's something else that people aren't really factoring in, 246 00:12:08,440 --> 00:12:11,840 Speaker 5: which is just how expensive the US is versus everything else. So, like, 247 00:12:12,440 --> 00:12:14,760 Speaker 5: we got a lot of requests from consumers for like 248 00:12:15,280 --> 00:12:17,240 Speaker 5: they're like, I have a thirty six inch stove, but 249 00:12:17,280 --> 00:12:18,640 Speaker 5: I want to take it out and put an impulse in, 250 00:12:18,640 --> 00:12:19,400 Speaker 5: which is thirty inch. 251 00:12:19,679 --> 00:12:20,960 Speaker 4: How do you solve that problem? 252 00:12:21,160 --> 00:12:23,960 Speaker 5: So we ended up designing and building an adapter that 253 00:12:24,040 --> 00:12:25,720 Speaker 5: you can just put in and then you put our 254 00:12:25,800 --> 00:12:28,320 Speaker 5: thirty inch stoven and it looks pretty nice too, And hopefully 255 00:12:28,320 --> 00:12:30,640 Speaker 5: that goes on the website relatively soon. But I'm maybe 256 00:12:30,640 --> 00:12:33,679 Speaker 5: spoiling this from marketing team. But basically we quoted that 257 00:12:33,720 --> 00:12:35,240 Speaker 5: out in the US because we're like, this is a 258 00:12:35,280 --> 00:12:37,000 Speaker 5: stamped sheet metal part, we should just be able to 259 00:12:37,040 --> 00:12:39,680 Speaker 5: do that. In the US, that's simple seven hundred dollars, 260 00:12:40,040 --> 00:12:42,160 Speaker 5: and it was like sub two hundred in China. So 261 00:12:42,440 --> 00:12:44,719 Speaker 5: from a tariff standpoint, I don't know, Trump needs to 262 00:12:44,800 --> 00:12:46,520 Speaker 5: up to hundre percent or something like that. 263 00:12:46,600 --> 00:12:50,400 Speaker 2: So this is the headline American manufacturer who is heavily 264 00:12:50,480 --> 00:12:53,600 Speaker 2: reliant on Chinese parts. Trump increased the terriff for three 265 00:12:53,679 --> 00:12:55,960 Speaker 2: hundred percent. Now I'm just kidding, but anyway, go on, 266 00:12:56,080 --> 00:12:56,320 Speaker 2: go on. 267 00:12:56,600 --> 00:12:58,400 Speaker 5: But that's that's a simple seat metal part and you 268 00:12:58,440 --> 00:13:00,439 Speaker 5: can imagine simple shoot. Yeah, And then I kind of 269 00:13:00,520 --> 00:13:03,120 Speaker 5: like was like why and this was a Bay Area vendor. 270 00:13:03,480 --> 00:13:06,400 Speaker 5: I won't dox them because they're actually great, but who 271 00:13:06,440 --> 00:13:09,280 Speaker 5: are their customers? And it's like, if your customers are 272 00:13:09,320 --> 00:13:14,600 Speaker 5: like Google street view vehicles, medical device companies that make 273 00:13:14,720 --> 00:13:18,679 Speaker 5: like yeah, LiPo, like not liposeection, but those like cool. 274 00:13:18,400 --> 00:13:20,760 Speaker 4: Sculpting machines, oh yeah, and like. 275 00:13:21,040 --> 00:13:26,360 Speaker 5: Defense companies, you probably don't have cost sensitive customers. And 276 00:13:26,440 --> 00:13:28,559 Speaker 5: the volumes and mixed level like when you get a 277 00:13:28,600 --> 00:13:30,520 Speaker 5: big order from a customer, it's one hundred unit, it's 278 00:13:30,600 --> 00:13:34,400 Speaker 5: not like one hundred thousand units. And so a lot 279 00:13:34,400 --> 00:13:39,480 Speaker 5: of the US manufacturing capability is like exquisite and medium 280 00:13:39,559 --> 00:13:42,400 Speaker 5: or low volume, or if it's high volume, it's incredibly 281 00:13:42,440 --> 00:13:46,720 Speaker 5: automated and not retooling. So like, yeah, there's giant injection 282 00:13:46,800 --> 00:13:50,040 Speaker 5: molding firms in the US that make like lawn shares 283 00:13:50,600 --> 00:13:53,440 Speaker 5: or whatever, but like, good luck being able to call 284 00:13:53,440 --> 00:13:55,280 Speaker 5: them up and being like can you make me like 285 00:13:55,360 --> 00:13:57,920 Speaker 5: the underside enclosure for my stove or something like that. 286 00:13:57,920 --> 00:14:00,400 Speaker 4: They'd be like, no, go away. So that's the point 287 00:14:00,400 --> 00:14:01,239 Speaker 4: of like China. 288 00:14:01,080 --> 00:14:04,600 Speaker 5: Being like extremely eager to take your business even if 289 00:14:04,640 --> 00:14:08,400 Speaker 5: you're like a crank startup founder like me, versus the 290 00:14:08,520 --> 00:14:12,160 Speaker 5: US being like almost like actively dissuading you from talking 291 00:14:12,160 --> 00:14:12,439 Speaker 5: to them. 292 00:14:12,600 --> 00:14:15,240 Speaker 2: I've heard this, Like people will say, like, you know, 293 00:14:15,320 --> 00:14:19,120 Speaker 2: you can WhatsApp the uh maker of some factory owner 294 00:14:19,160 --> 00:14:21,400 Speaker 2: at one in the morning. I saw some tweets about 295 00:14:21,400 --> 00:14:22,720 Speaker 2: this at one in the chat. 296 00:14:22,800 --> 00:14:23,320 Speaker 4: Yeah, and you can't. 297 00:14:23,360 --> 00:14:25,720 Speaker 2: Yeah, you can chat the factory owner like one in 298 00:14:25,720 --> 00:14:27,000 Speaker 2: the morning and they'll get back to you with a 299 00:14:27,040 --> 00:14:28,080 Speaker 2: quote in like five minutes. 300 00:14:28,320 --> 00:14:28,760 Speaker 4: Yeah. 301 00:14:28,880 --> 00:14:33,720 Speaker 5: I've gotten battery vendors email me cold being and these 302 00:14:33,720 --> 00:14:36,400 Speaker 5: guys like represent fairly large scale battery vendors. They're like 303 00:14:36,680 --> 00:14:38,880 Speaker 5: email me cold and they're like, what's your spec? And 304 00:14:38,920 --> 00:14:41,160 Speaker 5: I just like email them back like three lines and 305 00:14:41,200 --> 00:14:43,800 Speaker 5: then I get like a quoted design from them. 306 00:14:43,920 --> 00:15:03,520 Speaker 3: It's weird, okay, just on the pricing note, I mean, 307 00:15:03,560 --> 00:15:07,920 Speaker 3: it does feel like the outlook for American inflation certainly 308 00:15:07,960 --> 00:15:12,920 Speaker 3: depends on how companies decide to pass on or not 309 00:15:13,080 --> 00:15:16,720 Speaker 3: pass on all these additional tariff costs. Do you get 310 00:15:16,720 --> 00:15:20,280 Speaker 3: the sense that some of that depends on your relationship 311 00:15:20,320 --> 00:15:23,400 Speaker 3: with your supplier and how important you are for that business. 312 00:15:23,440 --> 00:15:26,400 Speaker 3: So I imagine, for instance, we've had news this week 313 00:15:26,440 --> 00:15:30,960 Speaker 3: saying that Walmart is trying to negotiate even lower prices 314 00:15:31,160 --> 00:15:34,760 Speaker 3: with its Chinese suppliers. I don't think it's been successful 315 00:15:35,320 --> 00:15:39,360 Speaker 3: just yet, but you can imagine Walmart is a huge, huge, 316 00:15:39,440 --> 00:15:43,240 Speaker 3: gigantic business and a really important one for a lot 317 00:15:43,280 --> 00:15:46,560 Speaker 3: of Chinese companies. So maybe they'll end up being successful 318 00:15:46,560 --> 00:15:51,400 Speaker 3: at it versus a startup that's only making a limited volume. 319 00:15:51,600 --> 00:15:54,640 Speaker 3: Maybe the suppliers don't care about that business that much 320 00:15:55,000 --> 00:15:56,160 Speaker 3: and we'll treat it differently. 321 00:15:56,640 --> 00:15:58,480 Speaker 5: Yeah, So, I mean I think there's a couple questions 322 00:15:58,480 --> 00:16:03,120 Speaker 5: going on too, because again, China runs a different industrial policy, 323 00:16:03,240 --> 00:16:05,080 Speaker 5: Like there's kind of this debate on the tariff side, 324 00:16:05,120 --> 00:16:06,560 Speaker 5: but it's like what is trying to actually do? And 325 00:16:06,680 --> 00:16:09,440 Speaker 5: could we rerun their playbook? And it's like China has 326 00:16:09,440 --> 00:16:12,520 Speaker 5: the equivalent of like state level champions. It's almost like 327 00:16:12,600 --> 00:16:16,000 Speaker 5: bid is like Guandong Province's champion, so you can be 328 00:16:16,000 --> 00:16:19,000 Speaker 5: like that's California's champion, and then c ATL is like 329 00:16:19,440 --> 00:16:22,240 Speaker 5: Texas is champion kind of thing, and the money flows 330 00:16:22,280 --> 00:16:25,680 Speaker 5: from this national government into the provincial governments. The provincial 331 00:16:25,680 --> 00:16:29,040 Speaker 5: governments actually like are the ones helping boost a lot 332 00:16:29,040 --> 00:16:31,520 Speaker 5: of these things because there's almost like delegated control. But 333 00:16:31,600 --> 00:16:33,680 Speaker 5: what this means is there's an aspect of competition here 334 00:16:33,720 --> 00:16:37,840 Speaker 5: where in China. It's not just like especially at the 335 00:16:37,880 --> 00:16:40,800 Speaker 5: Walmart level, like you're in competition with your rival province 336 00:16:40,840 --> 00:16:41,640 Speaker 5: to get that business. 337 00:16:41,840 --> 00:16:42,840 Speaker 1: Oh yeah, yeah. 338 00:16:43,120 --> 00:16:46,040 Speaker 2: This is a really important aspect of Chinese capitalism that 339 00:16:46,080 --> 00:16:50,480 Speaker 2: I think people don't really realize is how intensely the 340 00:16:50,520 --> 00:16:53,760 Speaker 2: province levels compete with each other. And you know we 341 00:16:53,840 --> 00:16:55,280 Speaker 2: have that here right like you. 342 00:16:55,240 --> 00:16:57,000 Speaker 3: Know, I think we'll have more of it here. 343 00:16:57,280 --> 00:16:59,800 Speaker 5: But the thing but people don't understand the way the 344 00:17:00,360 --> 00:17:05,399 Speaker 5: works there different. It's like because it's a single party system. Yeah, 345 00:17:05,560 --> 00:17:08,239 Speaker 5: it's almost like Gavin Newsom's boss is Donald Trump, vers 346 00:17:08,400 --> 00:17:11,120 Speaker 5: is their arrivals with different systems. 347 00:17:11,160 --> 00:17:13,760 Speaker 2: This is a really important point. The governors of American 348 00:17:13,800 --> 00:17:17,919 Speaker 2: states are incentivized to win re election. The provincial leaders 349 00:17:17,920 --> 00:17:20,919 Speaker 2: in China are incentivized to rise up within the Chinese 350 00:17:20,920 --> 00:17:23,959 Speaker 2: Communist Party, and they do that based on various goals 351 00:17:23,960 --> 00:17:26,399 Speaker 2: that are set. And so even though you have some 352 00:17:26,600 --> 00:17:30,240 Speaker 2: analogy of state versus state competition with exists here and 353 00:17:30,320 --> 00:17:33,879 Speaker 2: on service that might have looked like provincial competition, the 354 00:17:33,960 --> 00:17:38,160 Speaker 2: reality is that in the US system, it's not obvious 355 00:17:38,240 --> 00:17:42,679 Speaker 2: that any given governor is actually optimizing for economic performance 356 00:17:42,920 --> 00:17:46,320 Speaker 2: as opposed to reelection. And of course sometimes that might 357 00:17:46,359 --> 00:17:49,439 Speaker 2: be correlated good economy more likely to be reelected, but 358 00:17:49,520 --> 00:17:51,359 Speaker 2: certainly not at all. And I think this is like 359 00:17:51,440 --> 00:17:54,600 Speaker 2: a very interesting difference. But let's say we accept this 360 00:17:54,640 --> 00:17:57,560 Speaker 2: premise and I kind of do that is not great 361 00:17:57,960 --> 00:18:01,040 Speaker 2: for the world to be so dependent on China for 362 00:18:01,320 --> 00:18:05,200 Speaker 2: manufactured goods, et cetera, Like is there a middle path here? 363 00:18:05,240 --> 00:18:07,680 Speaker 2: Like what would you're Okay, someone hears this from the 364 00:18:07,680 --> 00:18:10,399 Speaker 2: White House, Like, Sam, you're into manufacturing, You've worked with 365 00:18:10,440 --> 00:18:12,359 Speaker 2: all these companies. We want to be able to have 366 00:18:12,400 --> 00:18:14,919 Speaker 2: a competitive stovemaker here in the US that doesn't have 367 00:18:14,920 --> 00:18:17,720 Speaker 2: to rely on a sheet metal company in China or 368 00:18:17,720 --> 00:18:21,120 Speaker 2: a final assembly in China. Like give us some outlines 369 00:18:21,160 --> 00:18:23,440 Speaker 2: of what you think needs to be fixed here or 370 00:18:23,560 --> 00:18:24,600 Speaker 2: dressed addressed here. 371 00:18:24,640 --> 00:18:28,520 Speaker 5: So let's actually look at who has solved this problem. Okay, Yeah, 372 00:18:28,640 --> 00:18:31,000 Speaker 5: what BS he had to deal with. It's funny that 373 00:18:31,359 --> 00:18:32,840 Speaker 5: when I say who and then I use. 374 00:18:32,800 --> 00:18:34,080 Speaker 4: This single, we all know it's Elon. 375 00:18:34,200 --> 00:18:36,960 Speaker 5: We know we all know it's Elon, And so how 376 00:18:37,000 --> 00:18:39,679 Speaker 5: the ever living crap this guy pull us off? Yeah, 377 00:18:39,720 --> 00:18:42,359 Speaker 5: and I think I've spent way too much time thinking 378 00:18:42,440 --> 00:18:45,360 Speaker 5: in reverse engineering this because it's really important. But I'll 379 00:18:45,440 --> 00:18:48,760 Speaker 5: use a very simple example. Do you all remember when 380 00:18:49,080 --> 00:18:51,600 Speaker 5: people were making fun of him for building a factory 381 00:18:51,640 --> 00:18:53,400 Speaker 5: any tent in the Fremont parking lot. 382 00:18:53,760 --> 00:18:56,000 Speaker 2: I do remember the tent. People shouldn't made fun of him, 383 00:18:56,080 --> 00:18:57,760 Speaker 2: especially in retrospect. 384 00:18:57,400 --> 00:18:59,520 Speaker 5: I mean it was it worked, so to refresh this 385 00:18:59,560 --> 00:19:02,359 Speaker 5: for the list. This was like during the Tesla Model 386 00:19:02,359 --> 00:19:05,200 Speaker 5: three ramp. They realized they like over automated and over 387 00:19:05,200 --> 00:19:08,840 Speaker 5: complicated the factory with exquisite shit. They then were like, 388 00:19:08,880 --> 00:19:11,120 Speaker 5: this line is misconfigured and we can't fix it because 389 00:19:11,280 --> 00:19:13,880 Speaker 5: there's not enough room in the building. But the problem 390 00:19:14,000 --> 00:19:17,360 Speaker 5: is if you wanted to build a building next to it, 391 00:19:18,000 --> 00:19:20,680 Speaker 5: Let's just say that California is a den of vipers 392 00:19:20,720 --> 00:19:24,240 Speaker 5: and those vipers' names are Nimbi's and you would not 393 00:19:24,560 --> 00:19:28,800 Speaker 5: be able to permit a new building in the time 394 00:19:28,840 --> 00:19:32,520 Speaker 5: that it would take or in Tesla's remaining time left, 395 00:19:32,560 --> 00:19:34,879 Speaker 5: if that makes any sense. Yeah, and you probably couldn't 396 00:19:34,920 --> 00:19:37,560 Speaker 5: get it done in three years, even just because we've 397 00:19:37,640 --> 00:19:41,960 Speaker 5: essentially made building in the built world next to engineers 398 00:19:42,040 --> 00:19:45,239 Speaker 5: illegal effectively, because like if it's a rich area, there 399 00:19:45,240 --> 00:19:47,840 Speaker 5: are nimbi's, and the nimbi's have infinite power. And so 400 00:19:48,119 --> 00:19:50,640 Speaker 5: what Elon did was he realized, you know what those 401 00:19:50,720 --> 00:19:53,360 Speaker 5: like graduation tents or like the tents they. 402 00:19:53,359 --> 00:19:54,480 Speaker 4: Put over the. 403 00:19:56,240 --> 00:19:59,879 Speaker 5: Football stadiums in like the Winner, like you go one 404 00:19:59,880 --> 00:20:02,080 Speaker 5: of the and they basically just put it in the 405 00:20:02,080 --> 00:20:05,240 Speaker 5: parking lot, and they moved all the factory and they 406 00:20:05,280 --> 00:20:08,480 Speaker 5: set up a mostly manual line to continue producing model 407 00:20:08,480 --> 00:20:11,159 Speaker 5: trees and ended up working. They ended up reconfiguring the 408 00:20:11,160 --> 00:20:15,159 Speaker 5: line inside, and the company didn't die. But there's a 409 00:20:15,160 --> 00:20:17,640 Speaker 5: million examples of this where it's kind of like Elon 410 00:20:17,800 --> 00:20:21,399 Speaker 5: versus the built world, where he just decided to say 411 00:20:21,520 --> 00:20:25,480 Speaker 5: no and figure out some sort of like I wouldn't 412 00:20:25,520 --> 00:20:28,600 Speaker 5: call it illegal, but like almost illegal loophole. And then 413 00:20:28,640 --> 00:20:32,879 Speaker 5: he also assembled probably the best team in litigation in 414 00:20:32,960 --> 00:20:34,760 Speaker 5: terms of like permitting and all that type of stuff. 415 00:20:34,760 --> 00:20:38,080 Speaker 5: So he's gotten an advantage versus everyone else in terms 416 00:20:38,080 --> 00:20:39,359 Speaker 5: of busting through all this stuff. 417 00:20:39,440 --> 00:20:44,160 Speaker 3: Hey, an almost illegal loophole is still illegal loophole, right, yeah. 418 00:20:44,440 --> 00:20:46,040 Speaker 5: I mean it's like you have to be kind of 419 00:20:46,080 --> 00:20:48,760 Speaker 5: like a goblin here, right, Like you gotta be like, okay, 420 00:20:49,000 --> 00:20:51,880 Speaker 5: let's figure out this tension of parking lot thing that 421 00:20:52,720 --> 00:20:55,639 Speaker 5: a mere mortal wouldn't have gotten that dring. It's like 422 00:20:55,640 --> 00:20:57,800 Speaker 5: you basically have to be out in space where like 423 00:20:58,040 --> 00:21:00,399 Speaker 5: these ideas would just be laughed at by like a 424 00:21:00,440 --> 00:21:01,200 Speaker 5: mere mortal here. 425 00:21:01,280 --> 00:21:02,120 Speaker 4: Right. Wait. 426 00:21:02,240 --> 00:21:04,800 Speaker 3: So the other thing that Elon is kind of well 427 00:21:04,840 --> 00:21:08,080 Speaker 3: known for doing is a lot of vertical integration over 428 00:21:08,119 --> 00:21:11,720 Speaker 3: the years, so you know, not just sourcing supply from 429 00:21:11,880 --> 00:21:17,280 Speaker 3: overseas and particular companies, but actually controlling all those different 430 00:21:17,320 --> 00:21:21,520 Speaker 3: stages of production, having investments in some of those companies 431 00:21:22,000 --> 00:21:24,520 Speaker 3: so that he can order whatever he wants at the 432 00:21:24,520 --> 00:21:28,119 Speaker 3: scale he wants, however fast he wants. Is that something 433 00:21:28,160 --> 00:21:32,040 Speaker 3: that could potentially happen as some of these tariffs get 434 00:21:32,160 --> 00:21:36,040 Speaker 3: ratcheted up, or is the concern for companies that, you know, 435 00:21:36,240 --> 00:21:39,720 Speaker 3: maybe you invest in a Chinese supply, well, I don't 436 00:21:39,760 --> 00:21:41,600 Speaker 3: even know if you could buy a Chinese supplier. I 437 00:21:41,640 --> 00:21:43,800 Speaker 3: don't think you could buy it wholesale. But let's say 438 00:21:43,840 --> 00:21:47,679 Speaker 3: you invest in, I don't know, a Mexican company, Suddenly 439 00:21:48,119 --> 00:21:50,440 Speaker 3: Trump changes his mind on something. There's a lot of 440 00:21:50,520 --> 00:21:54,680 Speaker 3: uncertainty over how he feels about international capital flows. All 441 00:21:54,720 --> 00:21:58,320 Speaker 3: of that is that a risk or is vertical integration 442 00:21:58,560 --> 00:22:02,080 Speaker 3: one possible solution to some of the pressures we've been 443 00:22:02,080 --> 00:22:02,679 Speaker 3: talking about. 444 00:22:03,280 --> 00:22:04,920 Speaker 5: So I mean, I'll always blunt and say that I'm 445 00:22:04,920 --> 00:22:06,760 Speaker 5: not sure if anyone's going to make any decisions in 446 00:22:06,760 --> 00:22:09,399 Speaker 5: this direction within the next ninety days unless they've got 447 00:22:09,440 --> 00:22:10,240 Speaker 5: insider information. 448 00:22:10,520 --> 00:22:12,640 Speaker 4: Yeah, So that's that's for one. 449 00:22:12,680 --> 00:22:14,639 Speaker 5: Like I think, I think basically, like the frothiness of 450 00:22:14,680 --> 00:22:17,480 Speaker 5: the current situation makes it hard to plan ahead. And 451 00:22:17,520 --> 00:22:19,600 Speaker 5: I'll say that, like you know from my position as well. 452 00:22:19,800 --> 00:22:22,600 Speaker 5: But yeah, vertical integration is clearly I mean, there's like 453 00:22:22,600 --> 00:22:25,080 Speaker 5: two different types of vertical integration. And I think what 454 00:22:25,200 --> 00:22:28,080 Speaker 5: I would caution people is like a lot of tech 455 00:22:28,119 --> 00:22:33,280 Speaker 5: founders take after Elon literally but not understanding why, like 456 00:22:33,320 --> 00:22:36,240 Speaker 5: the real reasons why. So I'll say, where you can 457 00:22:36,280 --> 00:22:39,720 Speaker 5: get screwed by vertical integration is like it's I was 458 00:22:39,760 --> 00:22:43,080 Speaker 5: hinting at this earlier, but basically, let's imagine I build 459 00:22:43,080 --> 00:22:46,040 Speaker 5: something like the stove and I obviously there's metal parts 460 00:22:46,040 --> 00:22:48,160 Speaker 5: in there, so I need like a metal tooling designer 461 00:22:48,560 --> 00:22:51,000 Speaker 5: to like design the stamping tools that like end up 462 00:22:51,000 --> 00:22:53,320 Speaker 5: stamping at metal parts. But let's imagine I only need 463 00:22:53,320 --> 00:22:56,480 Speaker 5: that tooling designer for like a month for the whole 464 00:22:56,520 --> 00:23:00,880 Speaker 5: program for two years, and so if I vertically integrate, 465 00:23:00,920 --> 00:23:03,040 Speaker 5: like I go and hire that person to work on 466 00:23:03,080 --> 00:23:05,280 Speaker 5: my team, there's no way that someone's going to go 467 00:23:05,359 --> 00:23:08,959 Speaker 5: work for me for two months. And if I end 468 00:23:09,040 --> 00:23:12,040 Speaker 5: up stocking up every discipline I would need to basically 469 00:23:12,080 --> 00:23:14,840 Speaker 5: be fully self sufficient, I might have one hundred to 470 00:23:14,840 --> 00:23:18,040 Speaker 5: two hundred people and be burning hundreds of millions of 471 00:23:18,080 --> 00:23:22,320 Speaker 5: dollars on a program, which is fine if I'm building 472 00:23:22,320 --> 00:23:24,960 Speaker 5: stuff at the scale of Elon, right like if I 473 00:23:25,320 --> 00:23:27,080 Speaker 5: If I'm doing it that way, it's like SpaceX can 474 00:23:27,200 --> 00:23:31,600 Speaker 5: likely fill that tooling engineer's time with a million different things, 475 00:23:31,640 --> 00:23:34,879 Speaker 5: not just like one model of starlink dish, But me, 476 00:23:34,960 --> 00:23:36,479 Speaker 5: as a much smaller startup, cannot do that. 477 00:23:51,800 --> 00:23:55,080 Speaker 3: You know, you mentioned how you don't think anyone is 478 00:23:55,119 --> 00:23:58,320 Speaker 3: making major decisions right now, and we started out this 479 00:23:58,400 --> 00:24:01,879 Speaker 3: conversation talking about whether or not all this back and 480 00:24:01,920 --> 00:24:05,960 Speaker 3: forth on tariffs was going to generate long term uncertainty, 481 00:24:06,000 --> 00:24:09,080 Speaker 3: and we know that the one thing both the business 482 00:24:09,160 --> 00:24:14,320 Speaker 3: industry and markets actually hate is a lot of uncertainty. 483 00:24:14,960 --> 00:24:18,359 Speaker 3: What would it take for you to, I guess, feel 484 00:24:18,480 --> 00:24:22,080 Speaker 3: better about making some long term plans. 485 00:24:22,440 --> 00:24:24,479 Speaker 5: Yeah, so, I mean this also goes to I can 486 00:24:24,520 --> 00:24:26,680 Speaker 5: also mention the vertical integration side of this for a 487 00:24:26,720 --> 00:24:28,680 Speaker 5: little bit as well, which is like the level of 488 00:24:28,720 --> 00:24:31,200 Speaker 5: vertical integration we did was basically like we control every 489 00:24:31,240 --> 00:24:33,679 Speaker 5: aspect of our supply chains. It's not like if we 490 00:24:33,760 --> 00:24:36,000 Speaker 5: go and move stuff, we still know how like all 491 00:24:36,080 --> 00:24:39,520 Speaker 5: the subcomponents are designed, which is very different from how 492 00:24:39,600 --> 00:24:42,119 Speaker 5: like stoves are normally assembled, which are closer to like 493 00:24:42,480 --> 00:24:45,399 Speaker 5: pre Testla cars, And so our ability to kind of 494 00:24:45,440 --> 00:24:48,719 Speaker 5: like have control and micromanagement of the whole of everything 495 00:24:48,720 --> 00:24:51,280 Speaker 5: that goes in the product is unique, despite the fact 496 00:24:51,320 --> 00:24:53,680 Speaker 5: that there are layered sub suppliers and stuff like that. 497 00:24:54,080 --> 00:24:57,600 Speaker 5: But yeah, that said, like my senses, as soon as 498 00:24:57,640 --> 00:25:00,359 Speaker 5: there are deals going in place in like cell the East, 499 00:25:00,359 --> 00:25:04,280 Speaker 5: Asia or Mexico, like we're not realizing that there's gonna 500 00:25:04,280 --> 00:25:07,119 Speaker 5: be some random Mexico tariffs or something like that, this 501 00:25:07,200 --> 00:25:09,560 Speaker 5: gets a lot easier in terms of constraints because like 502 00:25:09,840 --> 00:25:12,600 Speaker 5: we were very conscientious to select our suppliers to make 503 00:25:12,680 --> 00:25:16,080 Speaker 5: sure that we were able to locate manufacturing somewhere that 504 00:25:16,119 --> 00:25:18,560 Speaker 5: was lower zero tariff. But yeah, the big issue too 505 00:25:18,680 --> 00:25:21,879 Speaker 5: is like I think the fact that the tariffs were 506 00:25:21,880 --> 00:25:25,439 Speaker 5: seen as while accomplishing multiple goals, meant that they couldn't 507 00:25:25,480 --> 00:25:28,520 Speaker 5: succeed in any way. And the example I would give 508 00:25:28,600 --> 00:25:33,200 Speaker 5: is like, why are we taxing inputs for domestic manufacturers. 509 00:25:33,520 --> 00:25:35,399 Speaker 5: I went and actually looked at this right now, and 510 00:25:35,400 --> 00:25:37,040 Speaker 5: I'm like, I want to manufacturing the United States something. 511 00:25:37,119 --> 00:25:39,240 Speaker 4: I'm like dead set on doing that at some point. 512 00:25:39,440 --> 00:25:42,280 Speaker 5: If I imported my bomb build of material, so like 513 00:25:42,320 --> 00:25:44,239 Speaker 5: the list of crap that's in your product, if I 514 00:25:44,240 --> 00:25:48,639 Speaker 5: imported that to the US and started manufacturing it right now, 515 00:25:48,640 --> 00:25:50,720 Speaker 5: it's like I'm sub just that China one and twenty 516 00:25:50,760 --> 00:25:54,119 Speaker 5: five percent tariff. I'm not magically going to get a 517 00:25:54,160 --> 00:25:57,080 Speaker 5: ceramics vendor that knows how to make our temperature sensor tomorrow. 518 00:25:57,480 --> 00:25:59,440 Speaker 5: It's going to take probably six months to figure out 519 00:25:59,480 --> 00:26:03,520 Speaker 5: and qualify vendor. Plus, like you're not guaranteeing the same process. 520 00:26:03,960 --> 00:26:07,960 Speaker 5: So like standing up a factory takes like eighteen months 521 00:26:08,000 --> 00:26:11,000 Speaker 5: for the stuff and it's sort of recursive down the 522 00:26:11,000 --> 00:26:13,840 Speaker 5: supply chain. So like if I was suggesting some of 523 00:26:13,840 --> 00:26:16,200 Speaker 5: the administration, it would be like, we should figure out 524 00:26:16,240 --> 00:26:18,560 Speaker 5: a way where you can basically get all of the 525 00:26:18,600 --> 00:26:23,560 Speaker 5: input tariffs refunded and then maybe figure out like how 526 00:26:23,640 --> 00:26:27,720 Speaker 5: to move the levels of abstraction down over time, because 527 00:26:27,720 --> 00:26:30,000 Speaker 5: like doing final assembly of our stove is like it's 528 00:26:30,000 --> 00:26:33,560 Speaker 5: not something where like we need to rely on cheap 529 00:26:33,640 --> 00:26:35,879 Speaker 5: labor or anything like that. It's like it's like the 530 00:26:36,160 --> 00:26:41,000 Speaker 5: hard steps are mostly automated. The expensive subcomponents assemblies is 531 00:26:41,040 --> 00:26:44,439 Speaker 5: almost completely automated, like the circuit boards and stuff like that. Like, 532 00:26:44,520 --> 00:26:47,679 Speaker 5: this is not something that is like hard, like impossible 533 00:26:47,680 --> 00:26:49,359 Speaker 5: to move to the US, if that makes any sense. 534 00:26:49,480 --> 00:26:52,879 Speaker 2: This actually strikes me as a very interesting phenomenon, which 535 00:26:52,920 --> 00:26:56,040 Speaker 2: is that when people think about the constraints to US production, 536 00:26:56,400 --> 00:26:59,240 Speaker 2: they say, oh, our labor is more expensive. What you're 537 00:26:59,280 --> 00:27:01,639 Speaker 2: saying is so many which more interesting. What you're saying 538 00:27:02,160 --> 00:27:05,160 Speaker 2: is that it's not that the labor is expensive. It's 539 00:27:05,200 --> 00:27:08,119 Speaker 2: not that there's like a bunch of expensive assembly line labor. 540 00:27:08,560 --> 00:27:11,800 Speaker 2: It's that what little labor there is are well paid people, 541 00:27:11,920 --> 00:27:14,879 Speaker 2: and well paid people are Nimbi's and Nimbi's don't like 542 00:27:14,920 --> 00:27:18,639 Speaker 2: new factories, and that that is the dynamic, not on 543 00:27:18,760 --> 00:27:21,840 Speaker 2: the floor wage costs, but the political economy of the 544 00:27:21,880 --> 00:27:26,160 Speaker 2: people running advanced plants preventing the production of the advanced plants. 545 00:27:26,440 --> 00:27:26,640 Speaker 4: Yeah. 546 00:27:27,000 --> 00:27:29,040 Speaker 5: Actually, I would even be like, you're like, why can't 547 00:27:29,040 --> 00:27:31,720 Speaker 5: we have Shenjin in the United States? Yeah, well you 548 00:27:31,720 --> 00:27:33,920 Speaker 5: would need to put it in the Bay Area because 549 00:27:33,920 --> 00:27:36,440 Speaker 5: that's where that's where the engineers that are like the challenges. 550 00:27:36,520 --> 00:27:40,840 Speaker 4: Yeah, and Dean Preston's going to block you is the story. 551 00:27:41,040 --> 00:27:42,760 Speaker 5: Because also, by the way, like if you go look 552 00:27:42,760 --> 00:27:45,080 Speaker 5: at kind of like the Sierra Club breed of Nimby, 553 00:27:45,240 --> 00:27:48,120 Speaker 5: like those folks are starting to actually get more favorable 554 00:27:48,160 --> 00:27:51,800 Speaker 5: towards housing construction, but when they hear the word factory, 555 00:27:51,800 --> 00:27:55,240 Speaker 5: they assume like the river has turned yellow, not like, yeah, 556 00:27:55,280 --> 00:27:57,720 Speaker 5: we make some trash and it gets trucked out into 557 00:27:57,720 --> 00:28:00,720 Speaker 5: a landfill like consumer ly trins factory. It's like Amazon 558 00:28:00,760 --> 00:28:03,159 Speaker 5: warehouse like in terms Basically, the thing is these factories 559 00:28:03,200 --> 00:28:06,440 Speaker 5: are more like Amazon warehouses in terms of industrial emissions 560 00:28:06,440 --> 00:28:09,520 Speaker 5: than like probably less actually because there's no vehicles driving 561 00:28:09,520 --> 00:28:14,880 Speaker 5: through it. Then the like heavy industry plants of your 562 00:28:15,200 --> 00:28:18,600 Speaker 5: and the labor situation looks more like again like an 563 00:28:18,600 --> 00:28:22,159 Speaker 5: Amazon warehouse than the Triangle shirtwaist factory or whatever. And 564 00:28:22,200 --> 00:28:25,360 Speaker 5: we clearly allow Amazon warehouses in our communities, so. 565 00:28:25,320 --> 00:28:25,800 Speaker 4: Why not this. 566 00:28:26,400 --> 00:28:29,320 Speaker 5: But basically the thing is if you go to Byd 567 00:28:29,760 --> 00:28:32,760 Speaker 5: or similar places and you go to the HQ and 568 00:28:32,760 --> 00:28:34,760 Speaker 5: you see all their lineup of amazing vehicles, and like 569 00:28:34,800 --> 00:28:36,760 Speaker 5: you go inside their showroom, there's just like they literally 570 00:28:36,760 --> 00:28:40,400 Speaker 5: build everything. Yeah, you walk outside and directly across the 571 00:28:40,440 --> 00:28:43,040 Speaker 5: street there are high rise apartment buildings for the workforce. 572 00:28:43,600 --> 00:28:47,720 Speaker 5: Contrast that with Tesla where they're Fremont Factory. You walk 573 00:28:47,760 --> 00:28:50,080 Speaker 5: outside and it's all low rises. The Tesla does not control. 574 00:28:50,680 --> 00:28:52,800 Speaker 5: And then you go and ask the factory workers where 575 00:28:52,800 --> 00:28:54,800 Speaker 5: they're coming from, and they're all coming from like the 576 00:28:54,840 --> 00:28:58,600 Speaker 5: Central Valley. They're commuting two hours a day plus to 577 00:28:58,800 --> 00:29:02,200 Speaker 5: work at a factory because there is not enough housing 578 00:29:02,200 --> 00:29:04,000 Speaker 5: that is affordable for those factory wages. 579 00:29:04,400 --> 00:29:08,560 Speaker 3: Well, Elon also wants his workers to sleep in the 580 00:29:08,600 --> 00:29:11,880 Speaker 3: office in the factory. Right. And also, I mean in America, 581 00:29:11,960 --> 00:29:15,840 Speaker 3: I would assume we're kind of talking about company towns here, 582 00:29:15,880 --> 00:29:20,360 Speaker 3: like corporate compounds for employees in America. That's I think 583 00:29:20,400 --> 00:29:22,280 Speaker 3: a lot of people might push back on that. 584 00:29:22,880 --> 00:29:25,480 Speaker 5: Well, so I'll give an example of this where if 585 00:29:25,520 --> 00:29:29,320 Speaker 5: you want cheap, the problem effectively is like, so Shanzen 586 00:29:29,400 --> 00:29:33,520 Speaker 5: actually has an interesting conundrum that is worth discussing here 587 00:29:33,560 --> 00:29:37,920 Speaker 5: because in China the primary savings vehicle is also real estate, 588 00:29:38,040 --> 00:29:40,680 Speaker 5: right almost to a fault, and they almost have like 589 00:29:40,920 --> 00:29:43,200 Speaker 5: let's call it like universal prop thirteam, Like they don't 590 00:29:43,200 --> 00:29:44,120 Speaker 5: really have property texts. 591 00:29:44,160 --> 00:29:45,960 Speaker 4: You buy the thing and it just like you hold it. 592 00:29:46,560 --> 00:29:49,520 Speaker 5: And because of that, home prices are really expensive, like 593 00:29:49,560 --> 00:29:53,320 Speaker 5: we're talking million plus in Shanzhen. No problem, And so 594 00:29:53,600 --> 00:29:56,320 Speaker 5: how do you actually get workers, some of which are 595 00:29:56,320 --> 00:29:58,880 Speaker 5: paid like and by the way, the engineers at these 596 00:29:58,880 --> 00:30:01,520 Speaker 5: factory detention are are not paid super well. But like 597 00:30:02,040 --> 00:30:04,400 Speaker 5: you can imagine with purchasing power parity whatever, it's like 598 00:30:04,720 --> 00:30:06,920 Speaker 5: it's even like sixty seventy K in the United States 599 00:30:06,960 --> 00:30:08,239 Speaker 5: kind of thing is probably the way to put it. 600 00:30:08,600 --> 00:30:10,800 Speaker 5: But like, imagine I wanted to get a sixty K 601 00:30:11,680 --> 00:30:17,400 Speaker 5: junior engineer working at Tesla's factory in Fremont today, there's 602 00:30:17,440 --> 00:30:20,440 Speaker 5: a housing price issued convincing them to move to the 603 00:30:20,440 --> 00:30:23,920 Speaker 5: Bay Area, right, And so in a sense, it's like 604 00:30:24,160 --> 00:30:28,680 Speaker 5: the US needs to solve housing near where the top 605 00:30:28,760 --> 00:30:29,840 Speaker 5: technical talent is. 606 00:30:30,280 --> 00:30:31,080 Speaker 4: And then one way to. 607 00:30:31,040 --> 00:30:36,480 Speaker 5: Solve that housing problem without running into let's call it 608 00:30:36,720 --> 00:30:39,280 Speaker 5: people being upset their home prices have gone down, is 609 00:30:39,360 --> 00:30:42,480 Speaker 5: to do this factory town factory compound approach, where like 610 00:30:42,520 --> 00:30:44,600 Speaker 5: you have to work at Tesla to get the Tesla housing, 611 00:30:45,040 --> 00:30:48,440 Speaker 5: which then means that the Tesla housing doesn't necessarily deflate 612 00:30:48,840 --> 00:30:50,280 Speaker 5: Palo Alto households or whatever. 613 00:30:50,760 --> 00:30:53,600 Speaker 2: I just have one last question, which is you talked 614 00:30:53,600 --> 00:30:56,960 Speaker 2: about how in you know, in the versioning defense tech 615 00:30:57,080 --> 00:31:00,680 Speaker 2: sector and other areas public private partnership. I don't know 616 00:31:00,840 --> 00:31:03,920 Speaker 2: if there's new administration has any interest in that. It 617 00:31:03,960 --> 00:31:06,520 Speaker 2: doesn't seem like it, but maybe on defense I wouldn't 618 00:31:06,520 --> 00:31:10,600 Speaker 2: be surprised. But talk to us about like VC funding 619 00:31:10,760 --> 00:31:14,560 Speaker 2: and their demands and their willingness or unwillingness to sort 620 00:31:14,560 --> 00:31:18,600 Speaker 2: of fund Basically, where's the funding come from for real 621 00:31:18,920 --> 00:31:23,880 Speaker 2: risky upfront capital outlay if we're talking about US manufacturing. 622 00:31:24,400 --> 00:31:26,880 Speaker 5: Yeah, So, I mean, I think some folks successfully raise 623 00:31:26,920 --> 00:31:28,840 Speaker 5: for this in like twenty twenty one, twenty twenty two, 624 00:31:29,160 --> 00:31:32,280 Speaker 5: but there's like it's honestly, there's a missing piece here, right, 625 00:31:32,360 --> 00:31:35,040 Speaker 5: So the problem is the US has an awesome stock 626 00:31:35,080 --> 00:31:36,400 Speaker 5: market well until this week. 627 00:31:36,560 --> 00:31:39,560 Speaker 4: Yeah, But basically, if. 628 00:31:39,520 --> 00:31:42,040 Speaker 5: I want a three x return on something, there are 629 00:31:42,160 --> 00:31:45,000 Speaker 5: a million different competing things to do, So I have 630 00:31:45,080 --> 00:31:48,920 Speaker 5: to be uniquely obsessed with reindustrialization to like kind of 631 00:31:49,160 --> 00:31:51,800 Speaker 5: do something like that, like basically build a plant that 632 00:31:51,880 --> 00:31:54,440 Speaker 5: maybe three x's or something like that. It does not 633 00:31:54,600 --> 00:31:58,400 Speaker 5: have VC shape returns, is the problem. Yeah, and their 634 00:31:58,560 --> 00:32:02,240 Speaker 5: LPs are folks that are allocating into other types of 635 00:32:02,240 --> 00:32:05,760 Speaker 5: businesses or other types of investment vehicles, not just VC 636 00:32:06,240 --> 00:32:09,360 Speaker 5: that have those return profiles. So it's this weird game 637 00:32:09,440 --> 00:32:13,600 Speaker 5: of like the VC mandate is to basically fund advanced 638 00:32:13,640 --> 00:32:18,760 Speaker 5: technologies with disproportionate return, But hey, I want to build 639 00:32:18,760 --> 00:32:21,880 Speaker 5: a lift the m myron phosphate battery plant. We still 640 00:32:22,000 --> 00:32:25,800 Speaker 5: we seem to keep not succeeding at that because you 641 00:32:25,840 --> 00:32:28,880 Speaker 5: don't have like an advantage versus a Chinese plant. But 642 00:32:28,920 --> 00:32:31,480 Speaker 5: if I had went and invented like a new type 643 00:32:31,640 --> 00:32:35,640 Speaker 5: of battery material that three x is my energy density, 644 00:32:35,920 --> 00:32:37,200 Speaker 5: a VC would love to back that. 645 00:32:37,760 --> 00:32:39,640 Speaker 4: But even then it's like do you invent that? How 646 00:32:39,640 --> 00:32:40,400 Speaker 4: do you actually get. 647 00:32:40,360 --> 00:32:44,280 Speaker 5: Enough funding to build a plant to supply that to 648 00:32:44,360 --> 00:32:46,720 Speaker 5: all the automakers, you end up in this missing what 649 00:32:46,760 --> 00:32:49,480 Speaker 5: I think it's called like a missing middle situation. And 650 00:32:50,040 --> 00:32:51,959 Speaker 5: maybe this is more of an ask of private equity, 651 00:32:52,000 --> 00:32:53,760 Speaker 5: but like we need to get a little more ambitious here, 652 00:32:54,120 --> 00:32:56,920 Speaker 5: and maybe the right answer is like the government plus 653 00:32:56,920 --> 00:32:59,720 Speaker 5: private equity plus the banks need to get together and 654 00:32:59,720 --> 00:33:03,000 Speaker 5: figureigure out how to address some of these gaps. Basically 655 00:33:03,320 --> 00:33:05,320 Speaker 5: Elon again, I'll go pick on Elon because he's again 656 00:33:05,320 --> 00:33:05,960 Speaker 5: he's the only got. 657 00:33:05,800 --> 00:33:06,400 Speaker 4: To figure this out. 658 00:33:06,760 --> 00:33:09,160 Speaker 5: It's traditionally been the case where like you need to 659 00:33:09,160 --> 00:33:12,280 Speaker 5: figure out the kind of like increasingly growing lily pads 660 00:33:12,320 --> 00:33:14,560 Speaker 5: to hop to when you're like a frog. Yeah, and 661 00:33:15,040 --> 00:33:17,560 Speaker 5: eventually you get to a big one. But this is 662 00:33:17,600 --> 00:33:19,880 Speaker 5: not how like we built giant factories in World War Two. 663 00:33:20,000 --> 00:33:23,040 Speaker 5: It's like, this is not how we did this sort 664 00:33:23,080 --> 00:33:25,840 Speaker 5: of scale out in the past, requiring sort of like 665 00:33:26,120 --> 00:33:28,720 Speaker 5: you're almost like not doing the thing you eventually need 666 00:33:28,720 --> 00:33:30,720 Speaker 5: to do going you have to kind of. 667 00:33:30,760 --> 00:33:32,040 Speaker 4: Keep growing again. 668 00:33:32,080 --> 00:33:34,160 Speaker 5: I think Elon has solved this by being his own 669 00:33:34,480 --> 00:33:37,360 Speaker 5: fund in a sense, like he raises from VC, but 670 00:33:37,400 --> 00:33:41,160 Speaker 5: in some sense he's like an aggregation point where he's 671 00:33:41,200 --> 00:33:43,280 Speaker 5: like the general partner of Elon Industries. 672 00:33:43,320 --> 00:33:45,880 Speaker 4: Effectively, and that's a hybrid VCP fund. 673 00:33:45,960 --> 00:33:49,440 Speaker 2: Yeah, Sam Demiko, perfect guest to talk right now. Thank 674 00:33:49,480 --> 00:33:51,520 Speaker 2: you so much for coming back on odd Lunch. 675 00:33:51,560 --> 00:34:06,000 Speaker 4: That was great. Thanks for hosting Tracy. 676 00:34:06,080 --> 00:34:10,600 Speaker 2: In that conversation, we talked about Nimbi's and Yimbie's provincial 677 00:34:10,640 --> 00:34:15,839 Speaker 2: competition between China and how that compareson contrast versus state competition, 678 00:34:16,480 --> 00:34:21,560 Speaker 2: the limits to VC funding models in terms of domestic reindustrialization. 679 00:34:21,600 --> 00:34:23,040 Speaker 2: We hit a lot there that was a very like 680 00:34:23,600 --> 00:34:25,320 Speaker 2: that was a media Odd Lots conversation. 681 00:34:25,480 --> 00:34:27,799 Speaker 3: There was so much there. I really thought, you know, 682 00:34:27,920 --> 00:34:29,839 Speaker 3: sound was going to come on and be like, oh, yeah, 683 00:34:29,880 --> 00:34:32,840 Speaker 3: we're looking for a new supplier in a country that 684 00:34:33,160 --> 00:34:37,400 Speaker 3: is not China, or we're thinking about maybe switching some 685 00:34:37,520 --> 00:34:41,400 Speaker 3: production domestically. That didn't come up, which kind of tells 686 00:34:41,440 --> 00:34:45,680 Speaker 3: you something. But yeah, he hit some pretty big structural 687 00:34:45,800 --> 00:34:46,719 Speaker 3: themes I think. 688 00:34:47,400 --> 00:34:50,640 Speaker 2: Yeah, I mean, this is just the thing, like a 689 00:34:50,719 --> 00:34:53,920 Speaker 2: lot of people accept this premise that the US should 690 00:34:53,960 --> 00:34:59,120 Speaker 2: not be so dependent on China for various manufactured. 691 00:34:58,440 --> 00:35:00,600 Speaker 3: Goods, right and others as well. 692 00:35:00,680 --> 00:35:02,640 Speaker 2: Yeah, I mean this was big under the Biden administration, 693 00:35:02,800 --> 00:35:04,000 Speaker 2: is obviously big under Trump. 694 00:35:04,120 --> 00:35:04,279 Speaker 4: One. 695 00:35:04,360 --> 00:35:07,440 Speaker 2: Many people are concerned about this, but like when you 696 00:35:07,560 --> 00:35:10,960 Speaker 2: just look at the reality of actually existing supply chains, 697 00:35:11,880 --> 00:35:15,600 Speaker 2: that doesn't exist, and like, okay, like these immediate tariffs 698 00:35:15,640 --> 00:35:18,799 Speaker 2: go into plays, they don't exist, and I think, you know, look, 699 00:35:18,840 --> 00:35:22,840 Speaker 2: we're recording this right now, April tenth to eleven forty seven. 700 00:35:23,239 --> 00:35:27,240 Speaker 2: We see the Nasdaq it's down four point eight percent 701 00:35:27,320 --> 00:35:30,879 Speaker 2: again after Wednesday's big rally. It's sort of I think 702 00:35:30,880 --> 00:35:33,960 Speaker 2: today is about syncing in. Even with all else aside, 703 00:35:34,120 --> 00:35:38,120 Speaker 2: this gigantic tariff on China is massively disruptive and there 704 00:35:38,160 --> 00:35:42,800 Speaker 2: is no short term path for reshaping supply chains, right. 705 00:35:42,880 --> 00:35:45,520 Speaker 3: And I think the other interesting point that Sam brought 706 00:35:45,600 --> 00:35:48,520 Speaker 3: up was this idea, well, you know, there is an 707 00:35:48,560 --> 00:35:52,759 Speaker 3: adjustment cost, and there's a certain amount of time you 708 00:35:52,840 --> 00:35:56,799 Speaker 3: need to actually make that adjustment to your point, And 709 00:35:57,200 --> 00:36:00,520 Speaker 3: it would be helpful if the administration maybe a sempted 710 00:36:00,680 --> 00:36:04,440 Speaker 3: certain things that it thinks are important to the kind 711 00:36:04,480 --> 00:36:08,399 Speaker 3: of American manufacturing that it wants to actually see that 712 00:36:08,520 --> 00:36:11,360 Speaker 3: hasn't happened. I don't know why not. I thought it 713 00:36:11,400 --> 00:36:14,479 Speaker 3: was kind of funny. Did you see, So the US 714 00:36:14,520 --> 00:36:19,319 Speaker 3: has been importing more eggs because of egg prices, egg shortages, 715 00:36:19,480 --> 00:36:22,560 Speaker 3: and apparently those are going to be tariff too, so 716 00:36:23,080 --> 00:36:24,400 Speaker 3: kind of kind of weird. 717 00:36:24,640 --> 00:36:27,200 Speaker 2: The Elon tenth story, I did not realize so interesting 718 00:36:27,280 --> 00:36:28,960 Speaker 2: that actually was. I thought I sort of thought it 719 00:36:29,000 --> 00:36:30,840 Speaker 2: was like, Oh, they didn't have space in the factory, 720 00:36:30,840 --> 00:36:32,800 Speaker 2: so they're like throw this, And I did not realize 721 00:36:32,800 --> 00:36:36,280 Speaker 2: that that was actually a story about zoning, permitting, et cetera, 722 00:36:36,800 --> 00:36:40,200 Speaker 2: and that that was really about finding some loophole in 723 00:36:40,239 --> 00:36:43,560 Speaker 2: the law to stand up a manufacturing facility rather than 724 00:36:43,600 --> 00:36:46,480 Speaker 2: go through like a multi year process. That's fascinating to me. 725 00:36:46,680 --> 00:36:49,319 Speaker 3: Did you never have to like be in a sort 726 00:36:49,360 --> 00:36:53,800 Speaker 3: of outflow like trailer while you were at school, Oh, 727 00:36:53,840 --> 00:36:56,239 Speaker 3: because they were working on something or there wasn't any 728 00:36:56,320 --> 00:37:00,000 Speaker 3: more room, they couldn't build any new space. That happened 729 00:37:00,160 --> 00:37:02,880 Speaker 3: a lot to me. Yeah, So I kind of imagine 730 00:37:02,920 --> 00:37:05,879 Speaker 3: Elon doing the same. On that note, shall we leave 731 00:37:05,880 --> 00:37:06,120 Speaker 3: it there? 732 00:37:06,200 --> 00:37:06,879 Speaker 4: Let's leave it there. 733 00:37:07,080 --> 00:37:09,839 Speaker 3: This has been another episode of the Audlots podcast. I'm 734 00:37:09,880 --> 00:37:12,920 Speaker 3: Tracy Alloway. You can follow me at Chracy Alloway and. 735 00:37:12,880 --> 00:37:15,560 Speaker 2: I'm Joe Wisenthal. You can follow me at the Stalwart. 736 00:37:15,640 --> 00:37:19,200 Speaker 2: Follow our guest Sam Dimico, He's at s Dimico. Follow 737 00:37:19,239 --> 00:37:22,360 Speaker 2: our producers Kerman Rodriguez at Kerman armand dsh I'll Bennet 738 00:37:22,440 --> 00:37:25,520 Speaker 2: at dashbot and Kilbrooks at Kale Brooks. For more odd 739 00:37:25,560 --> 00:37:28,279 Speaker 2: Loss content, go to Bloomberg dot com slash odd Lots, 740 00:37:28,320 --> 00:37:30,319 Speaker 2: where we have a daily newsletter and you can check 741 00:37:30,360 --> 00:37:32,640 Speaker 2: out all of our episodes and you can chat about 742 00:37:32,680 --> 00:37:34,799 Speaker 2: all of these topics twenty four to seven in our 743 00:37:34,920 --> 00:37:37,920 Speaker 2: discord discord dot gg slash hot Lots. 744 00:37:38,080 --> 00:37:40,759 Speaker 3: And if you enjoy odd Lots, if you like it 745 00:37:40,840 --> 00:37:44,440 Speaker 3: when we check in on the manufacturing of electric stoves 746 00:37:44,480 --> 00:37:47,600 Speaker 3: in the face of sweeping tariffs, then please leave us 747 00:37:47,640 --> 00:37:51,360 Speaker 3: a positive review on your favorite podcast platform. And remember, 748 00:37:51,440 --> 00:37:54,120 Speaker 3: if you are a Bloomberg subscriber, you can listen to 749 00:37:54,320 --> 00:37:57,719 Speaker 3: all of our episodes absolutely ad free. All you need 750 00:37:57,760 --> 00:38:00,319 Speaker 3: to do is find the Bloomberg channel on Apple Podcast 751 00:38:00,480 --> 00:38:03,240 Speaker 3: and follow the instructions there. Thanks for listening.