The Iferia Techcast
00:14:29 · Adam Sand
If 30 roofing companies all have to market their roofing company, they're all paying $5,000 a month to a Facebook ad company to market their roofing company. But if you take those 30 roofing companies and combine them, you can get three very talented marketers to run the ads for all of them. Right? You find savings, margin, profit. Venture capital is different. Venture capital is venture. They're doing a new venture. They're going into a... Venturing into a new world. They're... That they're the present biting into the future. And venture capital says, okay. To make this future a reality, somebody has to invest in it before it's real. And they'll place 10 bets and nine of those bets fail, but one succeeds and pays for the rest. Right? Mhmm. So you invest in 10 companies, one of them's Facebook, and nine of them you've never heard of. Facebook pays for the nine losses. Whereas private equity doesn't have nine losses for every one win. They generally have eight wins for two losses. But here's what's interesting about today. Venture capital can make things faster than ever. Software, they can make faster than ever. Technology, they can make faster than ever. But the hardest thing about speed, right, is the resistance to change. Right? People resist change. They get uncomfortable with change. And so in the hospital industry, for example, there's amazing medical technologies, things that can make kidney stones go from a full day surgery in an operating room to something that can happen in a day office. Something that turns it from a $50,000 cost to an $1,800 cost. The hardest part about getting that into the market is actually the hospitals and the medical centers not wanting to venture into it. They just don't want to do it. They're like, they're like, nah. Like, we don't know. We're not sure. And so venture capital's number one problem is that the hospitals won't buy it. Now venture capital or private equity would typically go buy a bunch of hospitals and find profit. Right? They would they would consolidate the health insurance programs they work on. They would work with they get bigger discounts because they buy more stuff, right, in bulk. So venture capital and private equity are merging. And the the venture capital company is buying the hospitals like a private equity firm would. And private equity is investing in venture technology.
00:17:03 · Adam Sand, Ezekiel Iferia
And so investors, they might go one direction or the other, typically, but they're now starting to think the same. They're starting to think like a merge of the two. And so you would say, oh, we're gonna make robots that can roof. That's a venture investment. But the hardest part about getting robots on the roof would be getting the roofers to train them and use them. So what do you do? You buy the roofing companies so you can force the training and force the deployment. And so through buying and rolling up these roofing companies, deploying artificial intelligence and software and software that they own and giving them a piece of that public entity, they have a vested interest in deploying and training the robots because they own the outcome. They have a piece of what those shares will be worth in the future. And so then the venture investor is buying the roofing companies to force the resistance of change out of the way. I hope that it clear enough. [00:18:07] S0: Yes. Yes. Adam, that was a really deep and elaborate response. I have a couple of follow-up questions for that. You know, how is an AI native roll up, you know, different from the classic private equity, you know, buy cut cost flip playbook?
00:18:29 · Adam Sand
[00:18:29] S1: Yeah. I've actually tried selling our technology to private equity companies. Like, I have built and done work for many private equity backed roofing businesses. They don't wanna invest in it because it doesn't match their fund cycle. Right? It'll take ten years to pay off. They wanna get in, get out in five. So it just doesn't match their funds cycle. Now the difference in how an AI native company runs and why it doesn't really line up with private equity is because in a truly AI native company, you centralize intelligence and you democratize the travel of information. So what does that mean? Well, when you're in founder mode in a company, right, you are working with five dudes or five friends or five, like, five... A small team, and you're all doing everything. And the founder can speak to everyone directly. Right? And then it's a very flat organization. Right? This is a flat line. Right? And then just like the Roman legions, right, companies have run the same way that Roman legions did in, like, five hundred AD. Right? Which is where you get a hierarchy. You get a triangle. Right? So you get Mhmm. You get corporals, sergeants, master sergeants, lieutenant, like lieutenants, and you go all the way up to captains and everything like that. And so you... And then in court companies, you have you have coordinators. Right? Well, you have individual contributors, coordinators, managers, directors, junior vice president, vice president, senior vice president, c level. Right? And basically, that was all about communicating information up and down that chain. So managers communicate to a director. The directors communicate to a vice president. The vice presidents communicate to a CEO or a CFO or a COO. And it's because you needed a way to translate information up and down this hierarchy. Well, an AI native company is more like a circle. Right? And so then information is stored in a centralized place. You call it a rag database or a knowledge base or a second brain or a singularity organization. There's all kinds of names for it. All it means is all the information, everything everybody does goes to a centralized place. Easy way to understand it is if you think about Tesla's cars. Right? Every single one of those cars is a sensor. Right? And every car gets better because all that information goes to a centralized place.
00:21:07 · Adam Sand
It gets computed, and then a better way to do full self driving pushes out to all the cars at the same time. So every car gets better because everybody in the organization, in this case, cars, every car in the organization is a node connected to the center. And so private equity doesn't like that because there's the private equity firm and then there's all the companies they own. And there's this. And basically the companies report to the private equity. It it it's broken in that function. And so an AI native roofing company means that everything in the business has to become a sensor. That's how every autonomous thing ever happens. Because if you look at say Bedrock, which is automating and building autonomous construction equipment. So those big, you know, diggers and front end loaders and backhoes and cats and dozers and all that. The first thing is always sensors, right? Because they put sensors on equipment that humans use, and then they learn how the humans use it. And then they eventually don't need the driver. Look at Palantir and Anduril, the military equipment companies. They put sensors on the soldiers in the field. They understand how the field works, how the battlefield actually runs, and then they learn how to make better weapons. So an AI native organization at its simplest form just means that everything in the business needs a sensor of some kind, a way to report back to a central system that can compute all of that data to make better data driven decisions. And then everybody communicates with and derives action and decisions from a centralized place. So it removes the hierarchy.
00:22:56 · Ezekiel Iferia
[00:22:56] S0: Okay. Alright. So so, you know, you say that robots are coming and you believe in about three to five years, there will be robots working on roof. And, you know, one of the challenges you mentioned, you said the hardest thing to get robots to the roof is getting the roofers to train them. So let's look at things from the perspective of the roofers. Why do you think that's a challenge for them? Do you think they fear robots will want to replace their jobs? So I like to hear your own opinion on this.
00:23:27 · Adam Sand
[00:23:27] S1: Yeah. It it feels like you're standing on a branch, cutting the branch, and then eventually you fall with the branch. Mhmm. Right? Yep. So right now, they... What they do is they take advantage of of disadvantaged economies. Right? So they go to third world countries, and they put cameras on people's heads as they're cleaning or organizing or running a a distribution center. And they they train on this data. And because those people are disadvantaged, right, then they they basically don't get any stake in it. They're basically told do it or you just don't work here and you're gonna have to go find a job somewhere else. And guess what? They're doing it too. I don't like that. That's not very human centric. So then some companies, what they do is they pay you to do it. So right now in America, you can take your phone and strap it to your head. And it goes like this. And then you get paid $20 an hour to do housework. And as long as it can see your hands in the camera, you get paid for that hour. So if it was only... If it caught forty minutes, then you get two thirds of an hour's pay because it could only see your hand for for forty minutes of that hour. And then the third way of doing it is where you give people equity in the training. So you say, okay, we're not gonna pay you hourly. We're not gonna force you to do it because you're not gonna do it. You're gonna smash the equipment. You're gonna tell us you don't like it. Right? And we're not gonna pay you hourly to do it because you're gonna define whether you think that's worth it or not because it's gonna take your job. So the third way to do it is to make it so that everybody who contributes to the training set owns a piece, a share, a stake in that. And so that's one piece of it is that people have to have stakes. They have to see that this benefits them, which is is not a new concept. Companies used to give away pensions all the time. If you work at this company for forty years, you get a pension. If you're in the military, you get a pension. If you work for the government, you get a pension. Why do you believe it when you get a pension from the military or the government? Because you believe that the military or the government will be around for a hundred years and they'll pay. Right? But people don't believe it with companies because they're not so sure they'll be around.