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The Contrarians catchup
The Contrarians YouTube channel has exploded, going from 500 to 14,500 subscribers in two months and hitting its first ever 100,000-view video. Will: “The discussions that you two are hosting are so good and so rare to be found on these platforms. It’s taken us a long time to get a bit of momentum, but now the momentum is really kicking in.” His public prediction: 20,000 subscribers by Christmas and 100,000 by end of financial year.
Will on podcast economics and the Acquired model: “They go out and they say, look, we believe in what you’re doing, and as a result, we want to partner with you over a six to twelve month period. It’s a better experience for listeners because there aren’t 17 ads in every episode. It’s a better experience for the partner as a result.”
Adir on the 5x mismatch between podcast audience share and advertising spend: “I love mismatches. One of my favorite things is mismatches of audience attention versus advertiser money. That’s how I knew to buy Emitch in the dot-com boom.”
Adir also made a prediction two and a half years ago at a public event that both David Jones and Myer would be unlikely to still be in business in five years. Phillip de Winter from Nala confirmed this to him during the week. Adir’s response: “I said that doesn’t sound like a very impressive prediction. It was obvious, wasn’t it?”
Jensen Huang’s personal life made headlines during the week. Adam: “The judgment he showed was so poor that you question whether he should be running a business of $4.5T.” Adir on what happens next: “One is that obviously he can go. And I think that if that happens, this could be like the event that causes the AI bubble. The other option could be that he survives it because everyone thinks he’s so fantastic, people just make excuses for it. Or the third option is like it just fizzles into nothingness. And I think at this point it is impossible to call which one of those three it’s gonna be.”
David Jones: administrators called, Anchorage trying to buy it back
David Jones entered administration last week, with its private equity owner Anchorage Capital reportedly attempting to buy the business back from receivers. Adam questioned why Anchorage would have first right of refusal.
Adir: “I think the way you need to think about it is that Anchorage has the advantage that even though they couldn’t get the relationship across the line with Westfield, they do have relationships with them and have been working for a while. I think if someone comes and offers five times or three times the amount that Anchorage is offering, the receivers will probably look at them. I know that reports say Larry Kestelman was looking at it. He’s got a massive retail empire, that guy. Unbelievable.”
Adir: “They always have an advantage being on the inside because at least they’re a known entity to all of these receivers and the receivers have seen them operate and they can make a decision about whether they’re likely to get their money back or not.”
Adam: “The brand is gonna survive. Equity holders get wiped, I’d call that going under.”
AI spending flatlines; Apple caps its own engineering teams
New data from Ramp showed AI spending grew only 1.5% across August and September, compared to 42% growth in July versus the prior months. Meanwhile, Apple cut its daily AI spending cap for engineering teams from $300 to $200, with further cuts in the works down to $25 a day for some teams.
Adir: “This is just another example of the whole AI boom being powered by a few mega spenders. Some of those mega spenders are big tech companies, some hyperscalers, and then people like Oracle. And then some of them are venture and other kind of big investors. That’s the whole boom and it’s being powered by that and debt.”
Adam: “I think Apple is a hedge against AI, if that makes sense. If AI becomes a great consumer product, Apple just do what they did with Google and just reap pure margin from it from placing that top. And in the event the AI boom ends, suddenly chips become cheaper for Apple. So there is that benefit they’ll get.”
On AI agents specifically:
Adam: “Every time something like this happens, like a new model gets released or Instinct gets released, everybody jumps on X and “oh this has changed my life or changed the world”. And then a month later, it hasn’t changed anything.”
Adir: “I want to go and deploy an agent to get me a better deal directly on a hotel. Now firstly, there is absolutely no benefit to me in getting that better deal directly because the best deal is probably already available through an online travel agent. But let’s say I think I can go and get it. So there’s a lot of costs going on here. One cost is I’m spending tokens for the agent that I’m using. Who’s paying for that? So there’s a cost to that. And then the hotel, they have to pay for an agent. Who’s paying for that? And so what you’re saying is you’re now introducing more costs into a system and want a bigger discount in that system. How does that work? That is not the way it works.”
Valuation cut from $2T to $1.5T, and counting
The Wall Street Journal reported that major investors are increasingly skeptical of Anthropic’s IPO, with valuations now being discussed at $1.5T or below, down from the $2T target. Some investors want to see October numbers before committing. Anthropic’s run rate allegedly topped $80B at the end of October.
Adir: “Two months ago, Starlink was not as sexy as Anthropic. No Commsec punter is looking at Anthropic and saying, this is a no-lose situation, I’m just going to try and get as much stock as I can. That’s over. And I think momentum is the most powerful force in the universe. You cannot stand in front of a rushing river with your hands out and stop it.”
Adam: “I think it doesn’t get away. I think the boom is finito.”
Adir: “I still think it gets away because don’t you think that the AI boom is finito if this doesn’t get away? There are lots of people that have got a pretty dramatic bit of self-interest to invest in Anthropic to try to get it away. And I think what you’ll see is renegotiation of terms.”
Atlassian: strong Q1, but weak guidance hammers the stock
Atlassian reported Q1 FY27 revenue up 24%, cloud revenue up 31%, operating income of $189M USD versus a $96M loss in the prior year period, and R&D spend flat year on year. Despite beating on virtually all metrics, shares fell 16% after CEO Mike Cannon-Brooks guided FY27 full-year revenue growth of just 13.5%. Back-calculating for the remaining three quarters implied growth of around 10%.
Adir: “I totally agree with what Mike Cannon-Brooks said about AI. He basically came out and said all of our competitors are saying they’re doing all this stuff with AI. I wouldn’t be believing everything that you hear and that comes out of their mouths. Like a lot of what people are saying is happening with AI, it’s just not true. It’s embellished.”
Adam: “I still think they could get rid of 50% of these people. It’s gonna hit growth. They’re gonna genuinely make the two, three billion. I still think that’s a better way to do it.”
Adir: “If you make two billion dollars a year, you’re the master of your own destiny. You don’t need anyone else. And so that is kind of the lesson for young players, that once you start taking, once you start losing money and relying on other people’s money to grow, you’re on that treadmill.”
On valuation:
Adam: “I think at $20B we thought this actually is probably a buy, and it was. At $30B, I’m not a buyer, but I don’t think it’s catastrophic. At $40B, it still feels pretty toppy.”
Sam Kroenenberg on Cuttable, Cloud Guru, and Australian tech
Sam Kroenenberg co-founded A Cloud Guru with his brother Ryan in 2015, trained more than 2.5M engineers, and sold the business to Pluralsight at the height of the tech boom for more than US$2B. He has since co-founded Glitch Capital, a founders fund, and Cuttable, an AI-powered advertising platform that creates and optimises video ad creative from brands’ existing assets. Cuttable raised $5.5M in a seed round from Squarepeg and Rampersant in July 2024, and $20M led by AirTree last month.
On selling at the top:
Sam: “In 2021, remember it was pretty obvious that multiples weren’t gonna stay there long term. So the discussion was like, hey, we could keep doing what we’re doing and in five years from now we could be sitting here looking at the same valuation or worse with like another five years of blood, sweat, and tears.”
Sam: “Whether I get X or X times another thirty percent, X is still just so crazy that I never in my wildest dreams would have ever imagined that. So it kind of becomes irrelevant at that point in the decision making.”
On taking secondary at every round:
Sam: “The first time I took secondary, I called my wife. She’s like, what are you talking about? Like, we can pay off the house? That’s absolutely mad. That million probably would have been 20 million when we sold. It doesn’t matter. Because the mindset meant that no matter what happens from this point, the house has been paid off. When selling a company at a couple of billion dollars is a very nerve-wracking experience, because at this point I was already financially independent, it wasn’t all on the line. And so that really helped me because I’m not naturally a laid-back person.”
Adir: “Be more emphatic with founders that they should be taking secondary every opportunity to take it because it is the greatest insurance policy you’ll ever have in life.”
On Cuttable and what it does:
Sam: “The way you win now is to publish a lot of ads at volume. I’m talking like 50, 100, 200 ads a week to drive the algorithm effectively because bidding and targeting has been completely automated away in Meta and TikTok by AI now. So you can’t manually target anymore. The way that you target is with different ideas in the videos, in the ads. And so if you can find an idea that resonates with a segment of the audience, AI will find the audience that it resonates with.”
Sam: “When a brand comes to us, our AI pulls apart all of their brand presence, like online, anything we can find. They plug in their Shopify, we suck in all of their brand assets, products, they can drop in their brand guidelines, and we build out a whole picture of their brand in AI. And then from there we start creating ads for them.”
Sam: “We noticed all the other AI ad makers were just doing generative AI, just AI slop. And every customer said I’m afraid of AI, I don’t want AI slop representing my brand. And by the way, I’ve got Dropbox folders full of video shoot assets and photo shoot assets that I’ve paid all this money for and I can’t afford to repurpose them because I have to pay a human to sit there and manually edit them. So that’s the genesis of Cuttable. We cut up your existing assets.”
On typical results:
Sam: “We see kind of typically like 30% uplifts on ROAS. It depends what customers do, because they have the choice to publish as much or as little as they want, but if they follow our guidelines, see significant increases. So it both saves money and improves performance.”
On the CGT changes and what they mean for Australian founders:
Sam: “It doesn’t change someone’s drive. If you’re drive is intrinsic, which is I want to be my own boss, I want to build something I’m proud of, then it’s not going to stop you. The challenge is as your business starts to succeed, the ones that are really starting to work, it kind of gives you every incentive in the world to get out as quickly as possible and as early as possible. And that means when the founder goes, let’s say they’re approaching Series A, it’s looking good, shit, I better get to San Fran before the tax office gets a massive whack of this. Founders build their founding team around them. And so now those first 20, 30 hires might not be made here.”
Five other stories worth following:
Nvidia is investigating CEO Jensen Huang over an affair with an alleged Chinese spy. Despite national security concerns, Huang remains CEO, exposing succession vulnerabilities at the $5 trillion AI chipmaking giant.
Trump jokingly offered UFC CEO Dana White the White House press secretary role before admitting he wasn’t serious. White reportedly declined but will meet Trump, continuing their longstanding political and personal relationship.
Paramount Skydance reports its first earnings since acquiring Warner Bros. Discovery, following executive restructuring and employee buyouts. CoreWeave, down 41% this year, also reports this week, alongside Cisco, Applied Materials and Bending Spoons.
Seattle startup OneCourt is making NHL games accessible to visually impaired fans through haptic tablets translating live puck and player movements into vibrations. The technology expands existing coverage of NBA and NFL games.
Art investments have historically underperformed stocks, carrying higher volatility, storage costs and liquidity challenges. Despite potential diversification benefits, experts recommend buying art primarily for aesthetic enjoyment rather than expecting strong financial returns.