The conversation explores why regional SMEs face a different AI adoption gap than metro businesses.

Why AI enables his advisors to get out of the office and sit at kitchen tables having real conversations.

The paradox: more AI means hiring more humans, because human judgment and attention don't scale with processing power. The conversation goes deep on corporate extraction vs SME capitalism, the "tidal wave going out" before the tsunami hits regional Australia.

**Key Moments:**

- [03:50] "In regional Australia, finding work's not the issue. The challenge is how do you engage the right people."

- [06:05] The tsunami metaphor: "The tide's going out and everyone's walking on the beach going, look at the seashells"

- [12:59] "For us as a society, we need to decentralize leadership"

- [17:05] X Plan dominance: "$110 million of $200 million in fintech revenue. One login can cost $12,000 per year."

- [22:24] "There's not many things in your business more valuable than your data now"

- [29:11] The Hispanic Trump voter question from Harvard: "Why would somebody in regional Australia vote for a female version of Donald Trump?"

- [37:17] "Your core value generating part of your business now sits in Anthropic's data center and the guy that runs it is telling you he will take your job"

- [42:05] "All I've seen in our business is we need more humans that can use AI"

- [51:10] "I'd rather be wrong and human than right and AI"

- [53:37] Kane's constraint theory: "Shoot a bullet before you get the bazooka out"

- [1:00:03] NVIDIA stat: "Same size as the top 324 Australian companies combined by market cap"

- [1:02:28] "I wouldn't take the pill. Why would I want to cut the heads of ten of my favorite work brothers and sisters?"

**Friends of the Pod:** Kane (guest), Gabe (Adapt/Lumia connection), Bill Withers (SME capitalism conversations), Daniel (Kane's tech mate), Professor Boris Gruwski (Harvard), Professor Rari (the Hispanic Trump voter question)

Yo joins from Sovereign Engineering to talk about how AI has transformed freedom tech development since SEC-04, when Paul demoed a wallet vibed into existence in 30 minutes and blew everyone's minds.

The conversation covers the euphoria wearing off, the slot machine addiction problem, why LLMs are "extremely confident, extremely good at English usage, but extremely dumb," and the coming IPO exit liquidity dump. Uber burned their entire annual AI budget in four months and shipped nothing. Claude Code still has that terminal flicker bug from week two. Coding is not solved. But used as tools within their constraints? These things are genuinely great. FIPS, the peer-to-peer internet architecture routing to Nostr identities instead of IPs, was largely written by Claude, but every single line got human review. That's the model: Claude as a team member with specific jobs, not the entire dev team. YOLO++ kicks off July 20th.

**Key Moments:**

- [02:47] Paul's 30-minute wallet demo at SECO 4: "Everybody was blown away by this capability"

- [04:14] "There's no hope if I am to come back to programming by hand. I'm not going to produce anything."

- [07:11] Cryptography and AI: "It really, really fucks up. It always wants to do its own cryptography."

- [08:13] "If you are a reasonably good programmer, you would always trust yourself more than you would trust the AI"

- [10:59] The study where LLMs overtook a codebase: "Absolutely unrecognizable, unmaintainable without the LLM"

- [12:52] "As far as Dario is concerned, coding is largely solved. I'm not a good programmer, but I don't see it solving my problems at all."

- [23:25] "The euphoria is wearing off. The slot machine is just too addictive. People are tired."

- [25:11] IPO bubble discussion: "It should be known by now that it's exit liquidity"

- [27:35] 401k rule changes: waiting periods reduced from months to 15 days to force passive buying

- [31:01] SECO 5 prediction: specialized local models for Git, bash, commits, PRs—"We didn't really get those, did we?"

- [38:02] Uber's AI disaster: "Their year's budget, they finished in four months. What did we actually ship? Nothing."

- [42:17] Claude Code terminal flicker: "After coding's been solved for nine months, they still haven't fixed it"

- [48:57] FIPS written with Claude: "Every single line of code is getting reviewed. Claude is one of the members of the development team."

- [55:21] FIPS architecture: Nostr identities convert to IPv6, devices identify and connect peer-to-peer

- [59:10] Cross-pollination at cohorts: "Everybody on Wednesday is talking about their AI setup, their workflow"

**Friends of the Pod:** Yo (guest), Paul (OG wallet demo), Gigi (pipeline workflow, phone recordings), Marty Malmi (laptop wanderer, Nostr VPN), Mitchell Hashimoto (spending money to figure out where AI works), Lighthazard (AI for examples, not library code), Jonathan (FIPS creator), Aryan (FIPS collaborator), PrimaGene (Claude Code flicker video), James Checkmatey (bubble commentary)

**Projects Mentioned:** FIPS (peer-to-peer Nostr-addressed internet), Tollgate, Wingman (now on v4 with declarative workflow system), Zap Store

**Quote:** "These LLMs are extremely confident, extremely good at English usage, but extremely dumb. They have a lot of information, but they don't know how to weigh that information, how to use that information, and what are the consequences of taking certain actions."

# The Good Stuff, Episode 61: Loop Engineering

Boris (Claude Code creator) and Steinberger both tweeted this week: "I don't prompt anymore, I just build loops that prompt for me." Pete's response: they've discovered being a team leader.

Loop engineering is organizational design with new hype marketing terms—triggers, processes, business rules, the stuff we've been doing for a thousand years. The conversation explores where humans actually fit in these loops (spoiler: you can't be hands-off), the coin flip problem of compounding agent decisions, and why running agents for a day with no human interference produces drift toward suboptimal forks. Vision, values, and principles aren't just for humans-they're how you scale decision-making when you can't review every choice.

Also covered: the bubble phase of AI where we're shitting money into the pool instead of making things efficient, Apple's WWDC local LLM play (MDX protocol, neural accelerators), and why the $50/month product gap is so hard to close.

**Key Moments:**

- [01:01] Boris tweet: "I don't prompt anymore. I just build loops that prompt for me."

- [01:26] "They've discovered being a team leader. Basically."

- [06:07] "Business intelligence layer—it sounds sexy. But for 20 years there's always been a project in every business that was 'we should just have one big database.'"

- [07:50] "It's discovering that instead of coding, maybe we should be thinking about coding methodologies"

- [09:04] "What's interesting about agents is they move quick enough that you can put more iterations in. So it does feel loopy."

- [12:20] The coin flip problem: "If you've got 50 sub-agents, each making a judgment call, that's another coin toss. Your likelihood of getting heads nine times out of ten has just been obliterated."

- [14:21] "OpenAI pays his bills. At that point it doesn't matter what you're spending."

- [16:37] Vision, values, principles: "Here's how we make decisions. Every decision, you need to be thinking about these."

- [18:22] "Your AI does not have the same intuition for where you're going that you do. When you sit with it, it steers right. When you don't, it doesn't."

- [24:03] Shopify's five-person team ideal: "It's just because you can have tons of people doesn't mean you should"

- [29:29] "It's not all about the volume. It's always been about differentiation and taste and specific useful output."

- [40:47] Mythos/Fable: "It told me it was going to burn credits at twice the rate"

- [51:24] The bubble: "We're in this bubbly cash grab. We haven't done any of the interesting engineering work about making this efficient instead of making it bigger."

- [55:44] "I don't need more intelligence. I need better application to the problem."

**Friends of the Pod:** DeadmanOz, Gav, Mark, Peter Levels, Toby from Shopify.

**New Terms Coined:** The Right Porridge (Goldilocks context management), Loop Engineering (what we're calling it for now)

**Quote:** "We seem to be speed-running, the realization that the all of the organizational management infrastructure we've developed over the last thousand years was useful. It's there for a reason. We've not arrived there accidentally, we're now just reinventing it for agents with new names."