Inspired with Alexa von Tobel
00:30:43 · Alexa von Tobel, Kevin Ryan
[00:30:43] S2: Yeah. I think you're absolutely right. It's gonna be the rate of absorption. Yeah. And [00:30:51] S0: But I do think... What I am concerned about is that, you know, we see in our portfolio, these are tech companies, forward thinking. They are using AI effectively. My guess, if I went in to see what's in the bowels of large Procter and Gamble companies like that, they haven't really implemented AI yet. They're working on it. They're thinking about it, but they are gonna start doing that, and that will start to have a big impact. If I went into a big oil company, are they really using AI as well as they could? I doubt it. So that's where we're gonna start to see that impact, and I think that's a '26, '27, and '28.
00:30:51 · Kevin Ryan, Alexa von Tobel
[00:30:51] S0: But I do think... What I am concerned about is that, you know, we see in our portfolio, these are tech companies, forward thinking. They are using AI effectively. My guess, if I went in to see what's in the bowels of large Procter and Gamble companies like that, they haven't really implemented AI yet. They're working on it. They're thinking about it, but they are gonna start doing that, and that will start to have a big impact. If I went into a big oil company, are they really using AI as well as they could? I doubt it. So that's where we're gonna start to see that impact, and I think that's a '26, '27, and '28. [00:31:28] S2: I think you're right. And my prediction is that as we begin to see bumpy markets and potentially even a pullback, I think publicly traded CEOs will use those moments as an opportunity to actually shed 25% of staff, but really because of AI. Never misuse a crisis. And I think... So I do think that we have some bumpiness ahead between now and a decade away. Kevin, I wanna make sure we talk a little bit about SF New York. As two people who sit here in New York City and run funds that invest around the country, And we both started things in New York City and are loyal and love New York City. And I'm very excited for our thirtieth anniversary even though I was, you know, not involved for all thirty years. I would love your opinion of like what is New York crushing it at and that you feel really optimistic and where should we be worried and we need to pick up the pace?
00:32:31 · Kevin Ryan
[00:32:31] S0: You know, so New York is crushing it, and I think everyone loses sight because already they're having the conversation of, you know, New York versus San Francisco. Last year, we surpassed San Francisco in health care funding. So we're already comparing... And people forgetting that only a decade ago, we were probably one fifth of their size in health care funding. So it's just a dramatic change. You know, last quarter, VC funding in New York was 10 times Miami. Miami is so small, we don't even see it. So so New York is crushing it. Now that doesn't mean that San Francisco is not doing extraordinarily well and is still bigger and is still better on deep, deep, you know, large bets, crazy bets. I think San Francisco is still the best place for that. New York is a little bit more practical. You know, is this gonna make money? Vertical applications. We're gonna leverage off the fact that we have the industry. So, for example, the company I mentioned earlier, Rogo, that sells to investment banks. Obviously, you don't wanna be located in San Francisco. There are no investment banks headquartered there. You have to be here. If you're selling to arts organizations, Madison Avenue, all these industries, you need to be in New York. DoubleClick needed to be in New York. Our clients were all here. So a lot of this is just, can you attract the talent? And what has gone so well for New York is the fact that New York has become more and more livable. In fact, our only problems in New York due to success. Yes. Apartment prices are crazy. Why are apartment prices crazy? Because of supply and demand. Everyone wants to live here, and we need to build more housing, and people are focused on it. And San Francisco has been, you know, not run as well in the last twenty years. I mean, I I feel slightly unsafe when I'm downtown in San Francisco, and I don't feel that way in New York. But New York is... I mean, San Francisco also has a great quality of life. You know, people can live. There's more outdoors. So it's a very good city, but these are the two dominant cities. The raw material for our industries are twenty four to forty year old people from the top schools, the smartest, most aggressive people in this country, and the number one place those people wanna go is New York City, and that's not changing right now.
00:34:48 · Kevin Ryan, Alexa von Tobel
The fact that there were 2,200 murders here in 1990, and I was living here, And this year, that number is gonna be, I don't know, three twenty. It's just staggering. So as long as we continue to to execute as a city and keep having great bars and restaurants and ballet and art museums and cool things, then we will continue to do well. [00:35:08] S2: I once had an entrepreneur in the last month say something to me that actually I think is an an underappreciated dynamic, which is that if you are an SF, your team's sort of head on a swivel being like, where should I maybe go next? Because they're... You're kinda... Tech is the industry, and you're constantly like this. I'm here because I've gotta be the best at it. And as a result, you know, if you're building something in New York, you may actually have more loyalty law and and sort of long term commitment for your team because to your point, these are industry companies in some ways. Right? Your your point of, like, it's art, it's retail, it's ecommerce, it's healthcare, it's fintech, it's finance. You sort of have people are opting into a category that happens to make a lot of sense here. What I worry about for New York, and I'd love your opinion on this, Kevin, is the pace in SF is breakneck. It was not. We we we say AI really helped SF because none of us want a city like SF failing, but it it was in a tough spot during COVID. The the competition, the speed, engineering focus is relentless. And how do you think about that, Kevin?
00:36:26 · Kevin Ryan, Alexa von Tobel
[00:36:26] S0: Yeah. No. I think it goes back to my earlier point, which is that I do think that we still lose some of the, I'll call it, the craziest, most extreme, most dedicated tech only people sometimes gravitate to San Francisco. We get a lot of people who are very, very good, and also want to, on the weekends, go to an amazing club, go to an incredible restaurant, or broader. And that's amazing. Those are great. It was a big part of the ecosystem. But the sort of Elon Musk, if you think of that type of person, some of those people are in San Francisco and want that. It's a slightly different product, and that's what makes San Francisco an incredible ecosystem. And they... I mean, look, the best companies here are working unbelievably hard in New York, but I agree that the the the San Francisco can be more extreme. [00:37:23] S2: Yeah. There... Well, I mean, particularly in this moment where the big dogs are in a full break bout war of execution. And, you know, I think Google is showing us that they are dominating. [00:37:40] S0: But we also see we also see that OpenAI is hiring, you know, hundreds of people in New York City, that Google are hiring hundreds of people in New York City or thousands and building it up. They they need to follow the talent, and I have to look this up, but I wouldn't be surprised if, you know, they're almost hiring more people in New York right now than in San Francisco.
00:37:40 · Kevin Ryan, Alexa von Tobel
[00:37:40] S0: But we also see we also see that OpenAI is hiring, you know, hundreds of people in New York City, that Google are hiring hundreds of people in New York City or thousands and building it up. They they need to follow the talent, and I have to look this up, but I wouldn't be surprised if, you know, they're almost hiring more people in New York right now than in San Francisco. [00:37:58] S2: Yeah. That's probably... That is a good point. That's a great point. Kevin, I know we have the big thirtieth thirtieth anniversary. And to properly name you, you are the godfather of New York Tech. We're very grateful, and you've been an incredible mentor to me. I can speak, you know, firsthand. You've been a wonderful cheerleader of my career and everything I've done. What do you hope for New York City tech in the next fifteen to twenty years? I wanna go further out than just ten. Like Yeah. What what should we be holding hands and making sure we make happen?