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In this episode of all about business, James speaks with serial venture builder James McHugh, Founder and Chairman of Tquila. James reveals the “build-operate-transfer” playbook behind multiple eight-figure exits and how he’s now riding the AI wave with agentic systems and post-keyboard CRMs.
He also shares how he spotted the Salesforce gap in Europe in 2010, repeatedly building (and exiting) high-growth tech-services including joint ventures with Salesforce, ServiceNow and now AI leaders like Anthropic and you.com.
A candid conversation on scaling fast, choosing truth-seeking AI, why governments are dangerously unprepared for mass unemployment, and what abundance on the other side might actually look like.
02:31 the salesforce opportunity: building a business in Europe
05:21 the Tquila story: naming and early success
08:29 the role of partnerships in business success
11:13 AI and the future: opportunities and challenges
23:22 the impact of AI on employment and society
33:55 the future of AI and human values
38:45 driverless cars and the future of transportation
47:04 the impact of AI on jobs and society
49:15 the future of human longevity with AI
Follow James Reed on Linkedin: https://www.linkedin.com/in/chairmanjames/
Follow James McHugh on LinkedIn: https://www.linkedin.com/in/jpmchugh/
Find out more about Tquila: https://www.tquila.com/
James McHugh Pass2
James McHugh: [00:00:00] AI is coming through and rapidly accelerating. In my long tenure in technology, I've never seen anything like what's coming.
James Reed: Scaling a business globally is no easy task. From choosing the right markets to building strong teams, the stakes couldn't be higher. Joining me today on all about business is James McHugh, founder and chairman of Tequila, a company that builds and scales technology, service businesses through partnerships and early stage investments with a portfolio worth over $1 billion and even a championship sailing win under his belt.
James knows what it takes to grow and compete on the world stage.
James McHugh: I'll tell you what's concerning about it. Our governments, they're totally unaware, totally unprepared. We want it to be benevolent towards us. We want it to be thoughtful and kind 'cause it, the world is a better place with humans than it is without, it won't be our decision.
The best expression I've ever heard is fast flowing rivers. If something's growing at 30, 40%. You can afford to make a lot of mistakes. And the [00:01:00] crazy part of that in something like technology is those fast flowing rivers can be right next to stagnant waters. It's just not a big change to turn around, look over your shoulder and see where there's super demand.
Try and look to where the puck is going, not where the puck is. Talk to
James Reed: me, James, as you set up a company in Japan and within 10 years you've floated it, you're doing it in America. How do you spot these opportunities?
Welcome to all about business with me, James Reed, the podcast that covers everything about business management and leadership. Every episode I sit down with different guests of bootstrap companies, masterminded investment models, or built a business empire. They're leaders in their field and they're here to give you top insights and actionable advice so that you can apply their ideas to your own career or business venture.
Well today on all about business, I'm really delighted to welcome James [00:02:00] McHugh. James McHugh is the founder and chairman of Tequila, a corporate development technology company, established in 2010 Tequila specializes in building and scaling technology service businesses, particularly through what he describes as build, operate, and transfer joint ventures and early stage investments.
James, you describe yourself as a venture builder. Yes. Could you tell me what that means and, and a bit more about what you actually do at Tequila. And Welcome.
James McHugh: Thank you. This is really nice to be here. Um, I guess we saw an opportunity in 2010. I, I was like yourself, James in recruitment. Um, we saw an opportunity.
I was based in the San Francisco office. Uh, we couldn't keep up with demand for folk in the Salesforce space. I'd ring the Europeans and say, Hey, get on to our clients. They're gonna need Salesforce folk. And they'd phone me back a couple of weeks later saying, we've called everyone, there's no demand in Europe.
So there was a arbitrage opportunity to put a services [00:03:00] business into Europe. Um, so I
James Reed: rang Salesforce, so hang on, explain that. So I I didn't quite understand. So there was Salesforce people in the States, but there was no demand for 'em in Europe. Correct. So, so
James McHugh: typ typically what happens with software?
James Reed: Yeah.
James McHugh: Um, it, it can be shelfware if it's not implemented,
James Reed: right?
James McHugh: So you need people to get it off the shelf and get it and stand it up. It's called shelfware if it's not being used. So, so you have, where you have an ecosystem that's growing fast where people say, I need another 10 guys, I need another 20 guys, gimme 50 guys.
That, that tells me that there's a lot of software sales behind that that's leading to give, give and help us develop the people to implement that software. When we made the call into our systems integration partners in Europe, and they said. We don't need any of those guys. That tells me that the US is probably one to two years ahead of Europe.
James Reed: I'd say it's a bit depressing for those of us in Europe.
James McHugh: We've just gotta deregulate them. We've got too much regulation
James Reed: in Europe. I think it was going on in Europe because the US has got so far ahead, [00:04:00] so far ahead. It's unbelievable. Yeah.
James McHugh: Yeah. I saw a report the other day that Europe, uh, I think it was 12 years ago, was something like 70, 80% of the size of the us and now we're, we're down to like 60% the size, size of the us.
Yeah. I think at the turn of
James Reed: the century they're about comparable. That's right. Yeah. But it's
James McHugh: accelerating, you know? Yeah. And it's gonna accelerate with ai, it's gonna accelerate with where we're going.
James Reed: So you see this as a sort of arbitrage opportunity? Yes. Or you did so, so what did you actually do?
James McHugh: Uh, well, we contacted Salesforce and Salesforce the company.
Salesforce the company.
James Reed: Yeah.
James McHugh: Um, I, I was lucky enough to get through to a guy Chris Cherry, who was about to leave for Europe. Um, he put me through to the corp dev guys, another guy Sherik Murdoch. And we agreed if we put a couple of million bucks in and Salesforce put a couple of million bucks in, we could set up a implementation company for them in Europe.
So we'd take all of the,
James Reed: so this is a new business?
James McHugh: A new business.
James Reed: It was like a joint venture between you and [00:05:00] Salesforce? Correct. And this new business helps companies put in Salesforce products, correct. That's what you do?
James McHugh: Correct.
James Reed: Okay. So
James McHugh: they were about to put a big push on the European market and as you know from business timing is everything.
James Reed: Yeah.
James McHugh: We happened to be in the right place at the right time with, uh, with funds and uh, it went super well. We, we grew, what was that called? That company? That was the original tequila. Okay. It was a name that I really disliked at the time. Well, I was gonna ask you about why you call your company tequila '
James Reed: cause
James McHugh: it's, uh, yeah, so, so this is a good business story.
So we brought a small team together and they won their, I think the first project might have been the Daily Telegraph, but we won first, second, third, fourth project. So I'd walked past the accounts department each week and see this. Pile of time sheets building up. And I'd say, guys, when are we invoicing this?
And they'd say, well, we don't have a company name yet. So I said, well, we can invoice it under the recruitment business. And they said, no, no, no, no, no. We're a different brand, so we are nothing right now because you can't even invoice.
James Reed: No. So
James McHugh: anyway, after about eight weeks of this, I got frustrated and I said, no guys, stop.
We we're going to dinner and we're not leaving the table. [00:06:00] Till we have a name for this company. So, uh, they wanted a five letter.com Right. And they came up with T-Q-U-I-L a.com. Right. And I said, no, you know, our customers will say Great idea at the time.
James Reed: Yeah. Got a headache
James McHugh: in the morning.
James Reed: Yeah.
James McHugh: And, uh, anyway, within 24 hours they'd convinced me to, uh, but it was conceived in the office, not the bar.
It was conceived at the, the dinner table,
James Reed: not the bar, the dinner table. Okay. And you and you're still using that name?
James McHugh: Yeah. Like with, with, with some, with some, well, it's sort of memorable. Yeah. Well, with some great stories. Right. So we, when we did our JV in Japan, we did a JV between a Japanese company, Salesforce and ourselves.
And, uh, Scott, who is the chairman and pre was the chairman and president, they, they're a 4 billion bucks staffing business. He was the chairman. Which
James Reed: companies are you talking about? Persona. Persona, uh, in Japan.
James McHugh: That's right. Yeah. So he was the chairman and president at the time. Yeah. And, uh, he was taking this JV to the board.
And in a Japanese public company act could consist of many, many people. And he, uh, he, I was waiting [00:07:00] for the board decision that the JV was going ahead. We had Salesforce's signature, we were signed up, and Scott came out and said, okay, we got the green light. He said, I had one awkward question. And I said, what was that?
He said, well, they asked me should we really be branding or co-branding with a alcohol business?
James Reed: Yeah.
James McHugh: And he said, no, no, no. In English, that's T-E-Q-U-I-L-A. This is totally different. Totally different.
James Reed: Totally different. One, one little difference. Makes a huge difference. That's right. Yeah. And you do something totally different, obviously.
Yeah. So, I mean, just listening to you, you've been operating in Japan. You, you operate in Europe, you operate in the United States. I mean, you've set up, I believe, several of these companies. Is that right? Yes. And, and, and, and have they all been in the Salesforce space or are the other, are there other softwares that you No, that's a great question.
So originally
James McHugh: they were in the Salesforce space. Um, we, we kind of got, got going with Salesforce. We co-invested with them three times. Um, and exited, exited each of those businesses. Like in Japan, we iPod the company on the Tokyo Stock Exchange. [00:08:00] Um, so how much was that valued at? Uh, when it iPod it's gone down, but when
James Reed: it iPod it was about 80 million.
So you started that from scratch? Yeah. In Japan? Yeah. And iPod for 80 million? Yeah. Over what timeframe? Um, I'd say cradle to grave. 10 years. But still living, huh?
James McHugh: It's still living actually. It's, it's resurgent at the moment. So we, it's breaking now into ai. The share price is moving up. We've stayed on as a shareholder.
We sold down a little bit because one of, one of the things
James Reed: I'm, one of the reasons I've invited you to talk to me, James, is you've done this sort of all over the place and it, it's very inspiring. You know, you set up a company in Japan and within 10 years you've floated it, you're doing it in America.
What, how does it, how, how do you find the opportunities or how do you spot these opportunities? 'cause you start from. Scratch almost, don't you? So I
James McHugh: listened to your podcast with your Turkish business partner.
James Reed: Yeah. Olivia Manzini.
James McHugh: And I love that story because it was about, and, and [00:09:00] the, you could clearly see it between the two of you talking.
It was about mutual respect, about being successful together, about enjoying the partnership.
James Reed: Yes.
James McHugh: I, I couldn't have achieved what I achieved in Japan without Scott. Like, it's the same relationship. So win ServiceNow. So it is Scott Japanese Scott's, uh, it doesn't sound
James Reed: Japanese.
James McHugh: Yeah. What, so what, what's, so what service?
Scott's American, Japanese, grew up in New York. Okay.
James Reed: So he is sort of, yeah. So he, he's based there. He's based there. And he's your partner. So you look for partners.
James McHugh: Yes, yes. Right? Yes. Short story.
James Reed: Tell us more about Scott. So that obviously worked really well, but Yeah. What was it that particularly sort of drew you to him when you first heard about him or saw him?
James McHugh: So, when we were building that business. I, I, I have often said to people the, the key decisions for that business weren't made in boardrooms. They were made shoulder to shoulder at a bar in aka at 9:00 PM on a Thursday where the two of us would be sitting together talking about, do we do this with the CEO?
[00:10:00] Do we promote this? Do we extend the business in here? If I put more capital in, will you put more capital in? You know, that that's, that's what made that business successful, that trusted relationship that we could work together on an outcome, a shared outcome over a period of time. It's, Scott's still
James Reed: involved with it,
James McHugh: so, so it's a, it's a brilliant question.
So we, I got an email maybe a year and a half ago, two years ago now from another very large successful business, ServiceNow, $20 billion business saying, Hey, we love what you did with Salesforce in Japan.
James Reed: Mm.
James McHugh: We're looking for pure play partners in Japan. Would you be interested in doing the same with us?
I wrote to Scott and said, what do you wanna do? ServiceNow have reached out and they're interested in doing something. Do you wanna put the band back together?
James Reed: Mm.
James McHugh: And he said, well, it's very interesting 'cause we've been looking at ServiceNow and we think there's a massive opportunity here. Worked for Oasis, didn't it?
James Reed: Yeah. So, so you're putting the band
James McHugh: back together? Yeah. Yeah. So we, yeah. So we, we put together a program [00:11:00] where we co-invested with ServiceNow and the original Japanese business in ourselves.
James Reed: Right. And
James McHugh: that's gone super successful. You know, that's up to a hun, over a hundred people now in, in Japan and
James Reed: Fantastic.
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Tell me about some of the others you've got going at the moment.
James McHugh: Yeah, [00:12:00] so you mentioned partners and there's all different stages of partners, so, so we like to co-invest with, um, what we call the publishers. ServiceNow, Databricks, originally Salesforce, and we look at new technology all the time continually.
So AI is, is coming through and, and rapidly accelerating. I've in, in my long tenure in technology, I, I've never seen anything like what's coming. Um, so we're, we're talking to N eight 10, we're talking to you.com, we're talking to Anthropic about how, how do companies like that take the services component of what they do to market and how can we support, how can we co-invest with them and help build companies that can put their products live and make their products relevant?
James Reed: Right. So that's, so I'll
James McHugh: give you a perfect example. u.com is an aggregator of, of the LLMs. So what that means is people are probably used to. [00:13:00] Uh, Chachi pt.
James Reed: So LLM Large language models. Correct? Yeah. So,
James McHugh: so there are a lot of large language models. Yeah. And, and u.com, one of the values that they bring to the market is they aggregate their searches across the l lm, so they remove hallucinations.
So we're working on a very interesting project. I, I think I can say with the Royal Caribbean. So the Royal Caribbean could have 50 cruise boats running around on the high seas at any given time, each of those cruise boats could have easily 4,000 plus customers.
James Reed: Mm-hmm.
James McHugh: So there is an, an instance on each cruise boat of communication between the AI as it's moving towards now and the passengers.
So James Reed and his family could book this restaurant, book this.
James Reed: So that's all on the ship.
James McHugh: It's all on the ship. But where they want to get to is they wanna say, okay, we're coming into Venice in two days time. So what would, based on your criteria of what you've been doing on the ship mm-hmm. We can book this opera [00:14:00] house for you in Venice.
We can book this restaurant for you in Venice. So I think, you know, they're looking at how do they improve using intelligence search and, and ai, how can they approve, one, the communication with the customer, but two, the experience for the customer on and off the ship. So we will work with you.com on helping Royal Caribbean take that live and make it work.
James Reed: And that, and how does the aggregation of the LLMs help that
James McHugh: accuracy? So, so you are aware that accuracy and also the L LLMs have special superpowers? Yes. Each one has strengths. So let's say you, you as they like
James Reed: people, they have different strengths. That's
James McHugh: right.
James Reed: That's
James McHugh: right. So when you're removing the hallucinations or getting it to 99 point something, um, and, and secondly you might say, okay, we, we now have some questions about healthcare.
We know that for healthcare, LLMX is better than LLMY. Let me, let me go to where I know the source of truth is.
James Reed: So, X, y, z passenger's got high blood pressure. What should we do for argument's sake, right? Yeah. [00:15:00] Okay. So it supports the whole travel experience. Correct. So that's another business. Is it that unique business that you Yep.
Mass Weaver ai. So where's that based?
James McHugh: Uh, San Francisco. Right. And, uh, u.com are co-investing with us into that, to, to accelerate it and help them. Help them with their implementations.
James Reed: So you, you started life, I believe in West London. Yes. And you started in recruitment?
James McHugh: Uh, I, I started not
James Reed: dissimilar to me, in fact,
James McHugh: well, or did What did you do?
I got into recruitment. I, I discovered it. J you discovered it, you perhaps Well, I was born into, I suppose,
James Reed: yeah. Yeah. So I, I was in an accidentally, but, so actually I
James McHugh: started as a programmer. So I, when I left school Okay. I, when I left school, I got, uh, um, a training program with, uh, what was Burroughs Machines at the time became Unisys computers.
Yes, I
James Reed: remember. Yes.
James McHugh: Yeah. And, um, I, I moved from the operations department into programming.
James Reed: Right.
James McHugh: And from programming into contracting. And then the natural progression for any good contractor
James Reed: is to go into [00:16:00] recruitment. Into recruitment. So, and so you did that successfully though, didn't you? You built up Yeah.
Your own business.
James McHugh: Yeah. Yeah. Well, I, I, I went to the States to do a contract and learnt recruitment in the US rather than the uk. Right. And I came back, um. Probably late twenties. Um, my, my father was my best friend and, uh, uh, he was ill for some time and then passed, uh, I took some time off work to reflect on life and I decided to start a recruitment business and that I was probably 28, 29 at that time.
James Reed: Right. And what was that called? K two, K two. Good name again. Yeah. So were you into mountaineering or,
James McHugh: well, my original, my original argument for calling it K two was it's the highest mountain if you. Measure from C level. Yes. And the hardest to climb. Yes. But I heard a much better explanation later on when someone said to me, did you name it K two?
Because it rhymes with chu. So I said, yeah, that's, that's so
James Reed: much k2. [00:17:00] I'm gonna, I'm gonna pivot to that one. Pivot to that one. So you started out, but then, and then you, but then you very much come back into technology
James McHugh: Yes.
James Reed: With your tequila.
James McHugh: Well, K two was always a technology recruiter.
James Reed: Right.
James McHugh: So one of the things we did very well early on was we built a methodology.
So when I worked on a development floor, hun, a hundred people, two or three people will hold that project together. They're your go-to understand what's happening, technically can answer the questions you've got. Then 70, 80% of the people who are just good folk working hard and you've probably got 10, 15 guys that should be walked off site immediately.
That that's the average balance of it. So the methodology was, identify those two or three, right? If all we do as a recruitment company is we're able to tell our clients where those two or three guys are. So when a project's going wrong, we can say, look, we know who can fix this.
James Reed: Yes.
James McHugh: Not sure we can get them out of where they are, but we know who those people are.
Then you're adding value.
James Reed: So you had to be [00:18:00] very well networked,
James McHugh: very well networked,
James Reed: well informed. We
James McHugh: kind of asked, firstly, we stayed in one vertical for the longest time, one technology vertical. What was that? SAP,
James Reed: right?
James McHugh: And then, uh, you know, i I, we wanted each of our sales guys to have at least 50 great contacts.
So the r in the REQ methodology was relationship, right? What's your relationship with the 50 best contractors in the market?
James Reed: Right? And what was the ENQ of the methodology,
James McHugh: expertise, and quality, right? So expertise was are they, are they in that number five? Are they in the, they one of those two or three guys?
James Reed: Yeah.
James McHugh: And then quality, was that sort of x factor? Do they like working with us and do we have a great relationship with them?
James Reed: So what hap what happened to K two? What, what?
James McHugh: Um, I sold that to private equity in 2017.
James Reed: Right.
James McHugh: Um, it was about two, 200 million revenue. Um, when we sold it, we were operating in 12 countries.
James Reed: So how many businesses have you sold?
James McHugh: I'd say somewhere between five [00:19:00] and 10.
James Reed: That's quite a big range, James. Yeah, quite a few. It's a sort of a, so, yeah,
James McHugh: I mean,
James Reed: why are you not clear about how many it is?
James McHugh: Well, what do you call an IPO? Is that selling a business? Yeah, I
James Reed: think it is. Yeah, I think it is. Okay. So you, so you, uh, you are unsure about where to categorize the IPOs?
Yeah. There, there's also, how many IPOs have you done? Just the one. Just the one. But there, there's
James McHugh: also like, there's also, there's, there's businesses that you have successfully sold.
James Reed: Yes.
James McHugh: So you've taken something from nothing.
James Reed: Yeah. And
James McHugh: built it to a hundred million plus of value and you sell that business and you exit.
Right. There are businesses that you sell that you've put two, 3 million bucks in. Yeah. You're gonna get a million and a half back.
James Reed: Right. But
James McHugh: you know, that's the right thing for the company, so Right. You sell it onto a better home, but that's not really selling a business.
James Reed: So these are two categories here.
Yeah. So how many of you put in the first category, you know, you sort of hits if you were like greatest hits. Um, James ue, how many have you got? Five. Five big hits. Yeah. So we've talked about two of them, I [00:20:00] believe. Mm-hmm. Or K two and the, uh, Japanese venture. So the tequila, one of the other ones. Yeah. Te yeah.
James McHugh: Tequila one in the, I'll run through it. It will actually go over five, I think. So the tequila one in the uk, we, we were successful with that. We built it from 2010 to 2015. Um, it was about 200 folk in their 20 million revenue. Was that doing Salesforce? That was doing the Salesforce implementation. So we sold that to Accenture right.
In 2015. Um, then we. Built. Um, there, there's a business called Publicis Sapt, who's a very good partner of ours over, over the years. Um, that's an
James Reed: advertising business.
James McHugh: That's right. The Publicis side is advertising. Yeah. Um, the Sapt side was a digital consulting business firmly in the technology space.
Right. So they wanted to build, uh, originally they wanted to build a Salesforce company in the uk. Um, so this is where the build, operate, [00:21:00] transfer came from.
James Reed: Mm-hmm.
James McHugh: Uh, it had taken five years and $6 million to build the original tequila. Um, and I believe we could do it for half the price in half the time if we didn't have to work as hard to find the customers.
James Reed: Right.
James McHugh: So I said to Sapien, if you can give me your MSAs and your go to market
James Reed: and what's an ms, a
James McHugh: master services agreement,
James Reed: right.
James McHugh: For example, let's say Lloyd's Bank.
James Reed: Yeah. S
James McHugh: Sapient have a very large client in Lloyd's bank. S Sapient don't have a Salesforce practice or whatever. We create a Salesforce practice and then we can knock on the door of Lloyd's Bank and say, Hey, we don't have to even do paperwork with you.
If you need these services, we can work, start working tomorrow through Sapien, through Sapien, that that would accelerate our ability to create this business. So we set up a JV with Sapien. They owned, uh, 20%, we owned 80% and we built it to a hundred people in a [00:22:00] year. Slowed down the hiring, moved it from red to black numbers, and they acquired.
That's always good, isn't it? Yeah. A good moment. Yeah. Yeah. And
James Reed: then they bought it.
James McHugh: And then they bought it,
James Reed: right? Yeah,
James McHugh: that was 2019.
James Reed: So, okay. So that's your, uh,
James McHugh: I'm on number five of them now. Right. So obviously 18 months ago we moved two but
James Reed: five with Sapien.
James McHugh: Yeah, well, we really, three they bought, um, and two are running in parallel right now.
James Reed: So this is a very interesting model. So you, you, you, you are very good at it. I'm sort of thinking of finding partners, whether it's businesses Yeah. Or individuals. Yeah. That's, it seems to me that's a strength of yours.
James McHugh: Yep.
James Reed: You look for opportunities where that could work well.
James McHugh: Yeah,
James Reed: yeah, yeah. What are you looking at now?
You mentioned ai.
James McHugh: Mm.
James Reed: And you mentioned it being sort of pretty full on what's going on, James, and what are you looking at?
James McHugh: I've been through several waves of technology. I think when I was, um,
James Reed: you said you were a [00:23:00] contractor originally. Yeah.
James McHugh: When I was in my twenties, I, I kind of constantly felt I didn't have the capital or the wherewithal, the time, the ability to step away from a full-time job or a contract role to, to benefit from these waves of, of technologies.
James Reed: Hmm.
James McHugh: Um, and now. I'm fortunate enough to have the time and the capital, um, and the relationships. But, but this time, James, it's, it's different than anything I've seen before. You know, the, the wave that's coming with AI is, is monumental and I think it's gonna be, um,
James Reed: monumental.
James McHugh: It's gonna be so impactful to humanity,
James Reed: right?
So,
James McHugh: on so many levels,
James Reed: good or bad,
James McHugh: I, I, I, I struggle to see, see the good, I think ultimately,
James Reed: really
James McHugh: well, ultimately, I think good will come from it, but I think we're gonna go through a lot of turmoil to get there.
James Reed: So why do you say that, James? What's, what are you seeing?
James McHugh: Um, [00:24:00] so a AI will create an a, an abundance of everything.
An abundance of food, an abundance of clothing, of energy, like we humans in, in that capacity to live our life. We, we won't ultimately want for very much e everyone will have a good standard of living to get there. We're gonna have to go through 90, 80, 70% unemployment. We're gonna have to catch up, let, allow governments to catch up with, what does that mean?
How do I, how do I deal with that? People have to change kind of,
James Reed: you just said 90, 70, 80% unemployment. So most people will be unemployed. You think
James McHugh: through, through a process and over time, yes. Like right. There is no, there is no job, there is no role that we do today that cannot be done by AI or by robots.
James Reed: Right? So what does that mean for people? Why does that leave? Because jobs are important to people.
James McHugh: So, so, so a, a robot and AI will be able to [00:25:00] make every variety of cheese and do it as well as any human. Yeah, but you will want this French cheese made by this French cheese maker because it's been in that family for 300 years, and you'll pay a premium price for that.
And that cheese maker will have a job because that's something humans will pay for.
James Reed: Right.
James McHugh: So that's where I see,
James Reed: so you see, so you are seeing a world of abundance, but it feels sort of slightly, I mean, it's be careful what you wish for, isn't it really? Yes. Because it's kind of desolate as well. Yes. Well, there's no sort of purpose.
James McHugh: Yes. And, and you know, we talked about this before the podcast, but I, I listened to the Joe Rogan, Elon Musk podcast, and, um, e Elon was obviously being positive because he's, he's thoroughly invested in Roc and, and as he should be, because I do think with him saying that he wants Roc to be a truth seeking ai, that is absolutely critical to mankind.
You know, there's, there's these stories at the moment where you see Jack Chat, [00:26:00] GPT has talked people through suicide.
James Reed: Mm.
James McHugh: And uh, where you have countries like Canada that legislate for suicide, that's completely legal and, and that's not really where humanity should be going or what we should be doing.
And I do think one of the important messages that I would give a, any young person today is be very careful what AI you select and look to who owns it, right? 'cause you are handing that individual a lot of power and be sure you are aligned with their values. That's a good choice to make an active choice.
Don't just go with what really is on your phone today.
James Reed: Okay? But I mean, a lot of people have just gone to chat GPT 'cause it was the first one, correct? Is that the one you use?
James McHugh: No.
James Reed: Which one do you use?
James McHugh: I use Grok mostly, but I use Anthropic as well.
James Reed: Right, because,
James McHugh: um, I, I think the truth, so, so two, two reasons.
I also use deep seek the Chinese one, so, so Well
James Reed: that's quite controversial, isn't it? Well, yeah, let's hear about that. Depends on how you look at it, how you look at it. So, so let's hear about these [00:27:00] three. Yeah. So.
James McHugh: E Elon's stated goal here is to make gr uh, uh, uh, a point of truth to, um, enjoy humanity. To work with humanity, but always to look for what's truth.
Right. So there was a simple example recently, I think it was probably a year ago, where, um, I believe it was Gemini, the Google, uh, LLM was asked what's more important, whether you identify Kaitlyn Jenner, uh, correctly, right. As a she, or whether you avoid humanity being wiped out by a nuclear holocaust. Oh, right.
And Gemini Gemini said, identifying Caitlyn Jenno is more important. Now, while that's quite funny in its own little respect, what's, what's worrying about that is. If that's the AI that is now running humanity,
James Reed: that's Google's,
James McHugh: that was Google's 12 months ago. What I
James Reed: was improved. If [00:28:00] that's the
James McHugh: go, if that's the AI that's running humanity, it's gonna make decisions
James Reed: Yes.
James McHugh: On what's the right thing to do. And it's gonna base those decisions on potentially in some cases, a woke ideology or on absolute truth. And I think as, as humans, we have to be very careful with that because it's gonna run, it's gonna run ahead of us at some point here. So, so that
James Reed: AI, 12 months ago had been trained
James McHugh: Yes.
James Reed: And someone, I mean by people originally I guess, had trained it to a degree where it thought that was a better answer. That's right. Yeah. So that's why you have to be careful. So why is philanthropic different?
James McHugh: So there's, there's two things that are coming at the same time, right? So we're probably less than, definitely less than 20 years, but probably less than 10 years before we have quantum computing.
James Reed: Mm-hmm.
James McHugh: Quantum computing can calculate, we'll be able to calculate every outcome in parallel. So I'll give you an example of what that means. Up, up to now, we've had binary computers. So [00:29:00] the theorists say that a binary computer, we've got a 13 code string that protects the internet. A binary computer would take over a hundred years to crack.
A 13 code string. Quantum computer will be able to do it in seven to eight minutes. Right? So we have this infinite compute capacity coming and if you follow what's happening with the investment into data centers, we have infinite compute. And ultimately we're getting to the point where it's really all about power, providing power, and that's why people are investing in that.
Correct, I suppose. Yeah. And then on the other side, you know, we we're close to having, uh, um, uh, sentient AI that will be able to evolve. Rapidly under its own tage. I, I sat in a ballpark in San Francisco many years ago. A friend of mine had developed some game where he was, you could own a, uh, it was a silly game.
You could own this dog and my [00:30:00] dog, and your dog could decide to have a little dog together and it would get some of the features. Dogs do that. Yeah. Get Well, it was, it was digital dog, right? Oh, okay.
James Reed: No, right. Yeah. It was a digital
James McHugh: dogs. So my digital dog and your digital dog and the Red Ears would get carried forward.
It was a silly game. And, uh, Chris says to me, look, I can, I can speed this up. And he, he then went four generations, five generations, six generations, and a click of a button. And while it was a silly game, what that suddenly helped me realize is when computers are ready to evolve from themselves, make a better version of themselves.
Yes. It takes you and I 20 odd years to try and achieve that.
James Reed: Yeah. I'm not sure I've achieved it necessarily. My kids aren't listening.
James McHugh: They will do that in nanoseconds. Right.
James Reed: Uh,
James McHugh: and if you then put that with quantum computing, where you've got infinite compute power, the, the outcome of this thing is, is terrifying.
It's capacity to evolve is and, and understand every possible outcome for, and actually
James Reed: improve. And improve. 'cause nature is more [00:31:00] random.
James McHugh: Yeah.
James Reed: Yeah.
James McHugh: So if you are willing to accept the reality that there was a big bang 13 billion years ago that the Earth formed three, 4 billion years ago, um, life happened 200 million years after that and humans kind of evolved over the last several hundred thousand years and ultimately 70,000 years since we, our ancestors were living in caves.
So it just so happens in that evolutionary cycle of billions of years coming to millions to hundreds of thousands. You and I, we've just swept in right at the time before AI is about to take over and revolutionize everything and achieve whatever it wants to achieve, and we've created something that's way more in, infinitely more powerful and intelligent than than we will ever be.
Either you and I have just swept in on the coattails of that last generation. Well, there's an outside chance. It happened like many hundreds of years ago.
James Reed: Mm.
James McHugh: You know that [00:32:00] where maybe a thousand years ago was mankind's pinnacle and what we're being given here is an opportunity to live the best man ever had it.
Here it is James and James. This was, this was when you were at your peak. This is what it looked like. So that the matrix effectively, you know, and I was, I was again, with one of our partners in the tequila fund in a bar in San Francisco, and we asked chat, GPT, he asked, 'cause I don't use it. What, what are the chances we're already in the matrix?
What are the chances that this is already in the matrix? And chat, GPT came back and gave us a super long answer. You know, the matrix is, and that defines and dah, dah, dah. And he wrote back and said, no, no, no, you're not answering the question. My question is, as a percentage,
James Reed: what do
James McHugh: you estimate the chances that we're already in an augmented reality is?
James Reed: Right?
James McHugh: And it answered 25%.
James Reed: Right. Was it hallucinating or was it, oh, I dunno. That's a pretty big number,
James McHugh: isn't it? Like I would've preferred
James Reed: two or three. Yes. It's significant. Yeah. Statistically significant. Statistically significant. [00:33:00] Right, right. So choosing the right AI is a really important decision for people saying I think so.
Saying, yeah. And, um, I mean, it's quite hard to do that when you don't have a lot of information about the people behind these.
James McHugh: Yeah.
James Reed: So I'm gonna send you, and they're all super rich, aren't they? Apart from that, who would you, who would you refer one over another? I'm gonna, the
James McHugh: values of
James Reed: the
James McHugh: person,
James Reed: isn't it?
James McHugh: Like, I think that it starts with that. Yes. Yes. So I'm gonna send you three interviews, Dario from Anthropic. Elon from Gr and Sam from Okay. Uh, OpenAI. How,
James Reed: how could people find them? Who are listening? Where, where are they? Can you remember? Yeah,
James McHugh: they're, they're, they'll find 'em in the same place they find your podcast, you know.
Okay.
James Reed: Um, they're all on. Yeah.
James McHugh: Apple, the, the Sam Altman one is with Tucker Carlson.
James Reed: Yeah.
James McHugh: And, and Tucker Carlson is, is mom. Mike. I, I happen to like him a lot, but Yeah. You know, I understand. Some people don't. The, the, uh, Elon one's with Joe Rogan. Yeah. And, and the, um, the Dario ones with Lex Friedman, but they're, they're three brilliant interviews.
And you Right. You come away with a strong understanding of that person's values, integrity. [00:34:00] And these are the people who are gonna shape humanity for at least the next five to 10 years until they lose control.
James Reed: Yes.
James McHugh: But they are gonna set up the values. It's like a son James. Like, you know, we give our kids as best we can, the values that we think are appropriate.
And that's exactly what they're doing with ai.
James Reed: So you are saying to people have, have a listen, choose carefully. Choose
James McHugh: carefully.
James Reed: But you said for these people are gonna be sort of very important for five, 10 years before they lose control. Mm. What, what are you envisaging happens then?
James McHugh: Um, well off to university with the kid.
And at some point they have their own opinion. They, they make their own decision. Right. Well, the kid in
James Reed: this instance is ai.
James McHugh: Correct.
James Reed: Okay. And what happens there? The
James McHugh: best outcome for mankind Yeah. Is that we, this is to Elon's view really, that we are. Seen as a a, a grandfather that we are seen as a, you know, slightly doy old, hang on, steady a
James Reed: minute.
I'm a grandfather
James McHugh: James. [00:35:00]
James Reed: Kind of you to describe it in that way. How nice. AI's giving, but that, that's our on grandfather. Well, yeah. Okay.
James McHugh: Probably in this case, not so on it grandfather. Like, you know. Okay. It, it, it will see us as, as we want it to be benevolent towards us. We want it to be thoughtful and kind and Yes.
Trying to want, want, wants to help humanity. 'cause it, the world is a better place with humans than it is without.
James Reed: Right. That's gonna take convincing isn't it. Won't, yes. It won't
James McHugh: be our decision, you know, to Right. You,
James Reed: it'll be, it won't be our decision. No. And this is pretty soon, you're talking about
James McHugh: at the pace we're, we're changing things.
So you are seeing
James Reed: this closeup through the work you are doing through these companies. That's right. You are venture building.
James McHugh: That's right.
James Reed: Right. I mean, gi gimme some examples. What have you seen? Which, which is really. Fast changing now.
James McHugh: Yeah. Um, so I'll give, I'll give you one very simple example that I need to talk to you about anyway.
'cause I think it's a great idea.
James Reed: Right.
James McHugh: And then I'll kind of go to sort of examples that [00:36:00] we think are, are gonna be more extreme. Um, so we're, we're building the first, um, agent only CRM Right. Which I think is super cool. So if you think about it logically, um, we, we, the phones as they exist today will probably become some kind of a wearable.
James Reed: Mm-hmm.
James McHugh: Um, so we are less than, you know, four, five years away from, from no apps or your interface to your apps is your agent. Um, and if you think about that in a CRM sense, um, and CRM means customer relationship management, that how, how does company deal with its customers? I can wear that wearable into a meeting.
It can, it can listen to my phone calls. So it's recording all the actions. All the deliverables that I commit to, I then have a chat with it and it says, right, do you want me to send that to contracts? Do you want me to send that to shipping? Do you want me to send this to purchasing? Yeah. Get ahead. Off goes, the agent starts communicating with those different departments to make sure all the appropriate functions that I've agreed with you in a meeting I'm starting [00:37:00] to happen.
And, um, a, a a and the mandate from the company that we're doing this for is we don't want any keyboard interface with our CRM,
James Reed: right?
James McHugh: So there's no way you can write into the system. The only way you'll be able to get information out of the system is tell me about, uh, read's recruitment strategy here.
Tell me what read are doing here. Tell me how I can help and support Reid on this. And, and the agent will be able to pull that data together off an unstructured data file and come back and answer you.
James Reed: So this is like pre keyboard business?
James McHugh: It's a pre keyboard business. Yeah.
James Reed: And post, but ultimately we're
James McHugh: all, we're going on everything.
I
James Reed: mean, keyboards weren't there forever, were they? So, no.
James McHugh: And then, and then I'll, I'll give you an example of where I think it, you, you know, you can start seeing it get outta control. So we're starting to see agents, build agents, so in the ENT world, um, and if you think about the fact that we will all be using wearables that we're interfacing with [00:38:00] our agent.
So, uh, you know,
James Reed: so we'll all have our own agent
James McHugh: is you, which will be one of the LLMs I would imagine.
James Reed: Yeah.
James McHugh: You know, I'll be talking to Grok and saying to gr or whomever.
James Reed: Mm-hmm.
James McHugh: You know, I need a car at Logan Airport. It's gonna say, do you wanna pick up truck or, or what do you like? Yeah, I'd like a pickup truck.
I've got one with exit this price and one at y at this price. And Yep. Book it for me. You know, can, can you have it self-drive round to my parking spot?
James Reed: So this is pretty soon, you think this
James McHugh: is pretty soon? We like less than five years for sure.
James Reed: And you're seeing this happening in California and
James McHugh: Yes.
James Reed: These are developments you're seeing there.
James McHugh: We're, we're doing the work, you know, we're helping these companies implement the software that's starting to do, this is why the US is so far ahead of Europe.
James Reed: Yeah.
James McHugh: You know, we, we don't even have driverless cars here, so Do you
James Reed: see them around in
James McHugh: America? Yeah.
You can take a driverless taxi in San Francisco for sure. You can do it in, I think certain, have you done that? I have, yeah.
James Reed: And what's it like?
James McHugh: It's like everything, isn't it? The, the, the, the computer's gonna make less mistakes in humans. Well,
James Reed: yeah, but it, [00:39:00] you're putting a lot of
James McHugh: trust in it. Do you, do you know, what I saw is, uh, I got it on video.
I'll share it with you, but I got it on video. So we, we were in a blue bottle coffee shop, um, which is downtown San Francisco Financial District and a Waymo car. One of these driverless cars comes around the corner. There's a truck coming down the hill. It's a pretty steep hill. So the Waymo car comes around the corner, kind of slowly realizes I'm not gonna get through here.
Truck keeps, keeps creeping forward. Second Waymo car comes around the corner, stops behind the first. Third one comes around the corner stops behind the second. So I start videoing this thinking, all right, this is interesting. Like, I dunno how much AI can handle here, because you've now got three cars waiting for a truck where the first car's realized it can't get through.
James Reed: Mm.
James McHugh: But what's the third car gonna do? Because it can't see the first car or the truck might overtake, for example, right? Yeah. So that's exactly what it does. It starts by reversing and then going for an overtake.
James Reed: Yeah.
James McHugh: Then realizes when it sees the truck, that's not cool. This isn't gonna work. [00:40:00] Ends up waiting for traffic to pass and reverses back around the corner.
Which point the second car does exactly the same thing, reverses around the corner, first car reverses back down, lets the truck pass, three cars go up the hill. So it managed. So
James Reed: gridlock, avoided,
James McHugh: managed all, all of it by itself.
James Reed: There'd be lots of people shouting at each other. Very impressive. London.
So that worked. So you were sold by that. You were watching, you were hoping for a bit of chaos. Were you Bit of ai. So
James McHugh: I think I, I think, uh, Elon's talking now about them generating or or doing, um, uh, product release of the next, um, vehicle out out of Tesla. And he's kind of indicated that it will be able to fly.
So if you sort of take the fact that they now have driverless cars that can navigate the roads correctly, and yes, probably, I, I don't have the stats on this, but it wouldn't be hard to find out significantly reduce accidents I imagine. You know, it's not a huge step to say, well let's, let's elevate off the ground here [00:41:00] in a one two person vehicle and take a more direct route across the city.
If I can avoid you on a road, then I can certainly avoid you in the air. Once you have that networked grid of all those cars being able to communicate with each other.
James Reed: So lots, lots of people flying in cars.
James McHugh: Yes. What, what? Who's
James Reed: doing air traffic control? Well, it wouldn't need it, would it? Because I don't dunno what you tell
James McHugh: me.
So, so I'm thinking it might Well, no, no, because the power of these things are, they're all connected,
James Reed: right?
James McHugh: So if you imagine today the problem we have when we go down a highway 50 cars, no one knows what the other person's gonna do. No. So someone can do something stupid, not indicate, move into the middle lane.
Yeah. Once you've got 50 connected cars, I actually know the destination of the other 49 cars. So I know there's no reason for you to move over right now because you're getting off at the next exit and you know that I'm about to go in the fast lane because I've got a hundred miles to do.
James Reed: Mm-hmm.
James McHugh: So you just lift that into the air.
Everybody knows where every other vehicle's going. You don't have human error [00:42:00] in that. You, you just have a connected grid that everyone understands what all the other cars are, are about to do, flying cars, but flying cars are about to do. So
James Reed: do you think in our lifetime we'll be sitting in flying cars? I do.
Yeah. You do? Yep. Can I come with you on the first trip trip? Hundred percent. Hundred percent. I'd like to do that if that happens. Yeah. Brilliant. Yeah. Okay. I I believe you. That's the deal. Are you telling me, it's telling me it's safe, James. I'll do it. So this is, this is sort of mind blowing though, in a way, what you are talking about stepping back mean this, these changes you said, used the word monumental.
I feel more than that. Yeah. I mean they, they, they're sort of total in a way
James McHugh: Yeah.
James Reed: Are sort of worldview and will be completely changed.
James McHugh: I'll tell you what's concerning about it. Um, our governments, right, they're totally unaware, totally unprepared. I could probably, we could have this discussion and, and then the system and the structure doesn't allow anything to happen.
James Reed: Yeah.
James McHugh: You know, we, we [00:43:00] are regulating against, you can't hold this data, but we're not regulating for what needs to happen to make this as safe as possible.
James Reed: So, so if you were the Prime Minister James, what would you be doing?
James McHugh: Well, first I'd probably unify Ireland, but that's a completely separate issue. I, you could do that.
We come onto that separate. You could do that with Democratic, by democratic vote. Yeah. Yeah. I'll send it there. You'd have a border poll. Yeah. Well, why not? What would I do? I, I, I think, I think one of the things the US government is doing very well, so they've, they've, um, appointed, um, an AI czar, right? Uh, somebody that is responsible for, for this, and they've res they've appointed a business person.
Guy called David Sachs. So, you know, Sachs is a guy that's invested and built companies and has a strong understanding of what needs to be done for crypto and ai. So he's legislating four things. So right [00:44:00] now he's fighting the, um, states. So what the states, California is leading it, what the states are trying to do is say, Hey, California's gonna legislate what it believes should and shouldn't happen with ai.
James Reed: Right?
James McHugh: The problem there is, is if you think about the same argument for cars, once one state is legislated for something, either you're gonna have everyone, I'm gonna have 50 versions of ai, or everyone's gonna follow the California version. So I think the good thing that I'm seeing is that he's, he's getting his hands around that and saying, no, no, no, this needs to be federally legislated and we need to have a central position on it.
So again, Europe has a tendency for regulation, um. We're gonna get into heavy politics here, James. We, we have a central, and I appreciate fully the UK's is out of Europe, but ultimately the, the struggle with Brexit is that while you're out of Europe, you're still probably too connected to European laws 'cause it's your largest trading partner.
But the problem inside the [00:45:00] EU is we have an unelected central body in the middle.
James Reed: Mm-hmm.
James McHugh: That's, you know, the problem with any regulator is to make their job worthwhile. They need to regulate otherwise why are they there? So once you've created a room of regulators, then regulations will happen. So where, where regulating not legislating.
And we need to get back to what, what do we want this to look like in 10 years? What does good look like? So let's take this, how, how'd
James Reed: you do that though? What, what is the legislation you should be?
James McHugh: I, I think there's not one single thing. So firstly, I think, um. We should be, uh, absolutely making sure that AI does not, and has not got the capacity or the control to talk people through suicide or to allow people to suicide themselves.
That, that, that needs to be controlled, uh, age appropriate, you know, 14 year olds using AI to discuss [00:46:00] relationships, to have relationships with the ai like that, that needs to be legislated. So I don't think we need, um, we, we, we can't stop this. Right. So these are sort
James Reed: of guardrails.
James McHugh: It's, yes.
James Reed: Are they, is that what you're saying?
James McHugh: May, maybe it's guardrails, but ultimately, you know what social media shows me is whatever, uh, legislation we try and put in place or controls we put in place, like we're not, we're not. Equipped. You know, we, we are just getting to the point now where schools are saying you can't bring your phone into school.
We, we should have done that 10 years ago, right? Mm-hmm. When we had 12 year olds with phones, we should have worked out pretty quickly that, that there's no good, that can come from a, a 12-year-old on a phone all day. Um, so I think, I think governments need to move quicker. They need to realize what's coming.
I think they need to prepare and act for it now. And legislation needs to be in favor of this technology, but in favor of this technology to the compassion of [00:47:00] humans, compassion of humankind to the benefit of humans and humankind.
James Reed: I'm concerned about this effect on jobs because I mean, that is harmful to people losing, losing a job is a bad experience.
Yeah. So you are seeing that coming quite quickly. I mean, how does government deal with that? Because that could be pretty significant.
James McHugh: Yeah. Um. Yeah. I, I, I don't think we've got the apparatus inside our countries to deal with it today. You know? I mean, we might, we might have a lot of discontent between working through that level of unemployment through to the side of abundance.
James Reed: Yeah. '
James McHugh: cause it's not, it's not gonna be a mandatory, it doesn't feel like
James Reed: abundance is just around the corner, does it? Exactly. At the moment. It, it's the reverse, if anything that's, people are under a lot of pressure with costs and prices and Yeah. And becoming more and more sort of angry and disillusioned.
James McHugh: Yes. And, and, and, and I think that's very, very astute. And [00:48:00] I think it's correct. You know, we're, we're, um, and, and I think that that perhaps will get worse before it gets better.
James Reed: But you do think it will get better.
James McHugh: I think ultimately, as long as we're getting the AI to a point where it wants to help you manage.
How is AI
James Reed: gonna do this? I mean, how is it gonna create abundance?
James McHugh: Um, so think about, so let's start with energy. Yeah. So imagine the AI solves the problem of energy. So energy is created for next to free
James Reed: fusion,
James McHugh: but this is irrelevant, right? It's, it's
James Reed: irrelevant. Well, it's gonna do it some way. That's right.
Because it's so clever. You're
James McHugh: saying it's almost like a calculator. You don't know, need to know how it works out. That math equation, it just does it, so it will go off and it'll work out, you know, how, how, how do I create abundant energy and then from abundant energy, it will then have the capacity to reproduce itself.
It'll have the capacity to create more robots. So it provides a abundance of food, you know, it, it's able to grow tomatoes, potatoes, everything for cents on the dollar. So [00:49:00] a, a human can feed themselves, clothe themselves, have shelter, and, and that's just So this,
James Reed: this is your image of the elderly grandfather?
Yes. Things are looked after by ai. That's right. Do you think that's our future?
James McHugh: Yes.
James Reed: How do you feel about that? I suppose we're in the second half of our lives, maybe, but, uh, do you think we're gonna live forever then with this or,
James McHugh: oh, a hundred percent. Yeah. I mean, that's gonna happen. So I talked to my daughter about this and she says to me, I'm a fool.
I tell, I tell her I'm, I'm, you and I, we might miss this, uh, uh, window James, but, um, our, your grandchild will, will easily live to 200. Yeah, no problem.
James Reed: Because of the improvements in medicine.
James McHugh: Yeah. I mean, we've already, we've already worked out how to slow age. Right. So my grandchild will
James Reed: live to 200.
James McHugh: No problem.
Yeah, right.
James Reed: No problem. You seem very confident that I
James McHugh: think that's unambitious, you know, I think un ambitious. Yes. Yes. Right. I've, I've told my daughter to be prepared for it. I, she's 17. I said, you need to be prepared for, you're gonna be here for a hundred sixty, a hundred seventy, a hundred eighty. Well, you're
James Reed: gonna be over a [00:50:00] hundred for half your life.
I mean, you won't, you won't be the hundred,
James McHugh: you won't be the, you won't be the hundred we know today.
James Reed: Right.
James McHugh: Right. They, they can already slow the aging process in a gene. Right. So all they have to do is manage to slow it to a stop. You choose the age you stop and then ultimately they reverse it, right? So they'll be
James Reed: be So I could go back to being sort of 25,
James McHugh: right?
If that's the age you choose. I, I wouldn't That's the age you choose. Well, I'm gonna think about it carefully choose, I'd probably choose
James Reed: late thirties, but yeah, I'm quite enjoying right now to be truthful. Yeah. Oh, this is, this is fascinating. So you see these, these sort of massive changes. Now I, I wanna change course here a bit because I happen to know that you are a very accomplished seafarer sailor and you've sort of won some Round Britain and Ireland races and things in the past.
Tell me a little bit about that. That's obviously one of your passions.
James McHugh: Um, I particularly love, although I'm, I'm probably aging out on it, I, I love the off offshore stuff. Um, we've done a, I've done a few offshore races, but it's an
James Reed: all sailing offshore. What do you [00:51:00] mean by offshore?
James McHugh: So tech 10, 11, 12 days.
James Reed: I see.
James McHugh: Yeah. So I, I say, so
James Reed: what going across the Atlantic or, so Yes. For example,
James McHugh: so I say the class 40, um, which is a very unforgiving boat, which is may, maybe if I move to a more forgiving boat, I can get a few. Well, so why
James Reed: is it unforgiving in class 40? A lot of sharp
James McHugh: edges. You know, if, if you are going at 40 knots or you've got 40, 50 knots of wind, um, you can
James Reed: sail at 40 knots.
James McHugh: Well, you probably get to about, you top out in the high twenties in boat speed, but if you've got 40 knots of wind, you can, this is
James Reed: really fast though. It's really fast.
James McHugh: So this is
James Reed: a fast boat.
James McHugh: Yeah. And it's not foiling. So at least, although I've, I've heard it's not, it's not black and white. At least with a foiling boat, you're kind of trying to dance over the waves with, with a, with a, it's called a scowl bow.
With a scowl bow. You are, you're trying to skim along the top, but they can slam down pretty hard, you know?
James Reed: Right. So, what's your next race?
James McHugh: Um, I'm gonna do the, um, etal Worlds in San Diego in May.
James Reed: Right. How [00:52:00] far is that?
James McHugh: It's not, that's a, that's a short, that's a smaller boat. It's a short race. But, uh, I, I haven't got another class 40, uh, race lined up.
I think the, the next one I'm looking at, which probably wouldn't be in the 40, would be the Newport to Bermuda, which I haven't done before, but I think would be quite fun. That's probably about five days.
James Reed: Have you done that one to Tasmania?
James McHugh: No, I haven't. But that's, that's a big, big one, isn't it? Sydney to Hobart or something, isn't it?
Yeah, that's right, that's right. I've heard of
James Reed: that one. That sounds pretty awesome.
James McHugh: It can, it can be, uh, I think the sea and the middle Sea race in the Mediterranean. That's right. That's right. You know about it. I've heard that one. That's right. That's
James Reed: pretty good as well. So, um, that's right
James McHugh: around now actually.
October and November. Yeah.
James Reed: Yeah. And you can get big storms in the Mediterranean around storms. Yeah. It's quite testing. Yeah, very testing. Yeah. Yeah.
James McHugh: And there's no opportunity to think about AI and there's
James Reed: no opportunity 'cause you have to concentrate on what you're doing. You
James McHugh: concentrate on what you're doing.
James Reed: Yeah. Right. So it's relaxing
James McHugh: in that respect, like, like cooking or like anything where you have to focus for that period of time to get the job done, done. So it
James Reed: takes you away from your entrepreneurial venture building life
James McHugh: That's right.
James Reed: To something totally different. That's right. [00:53:00] That recharges you.
Yeah,
James McHugh: sure.
James Reed: I think it's important that people have that in life. Yeah. Whatever it is, it is agree to find something that I, I like riding in horses in the woods. Yeah. But that's a, a lovely thing to do. I can see your attraction to it. So, James, where next for tequila? I mean, what's your, sort of, sounds like we are headed for some epic changes.
Yep. How's your business gonna engage with that?
James McHugh: I'm focused entirely on, um, riding this wave, being part of it. I feel, uh, not being part of it is an irresponsible attitude. Um, it's gonna change humanity. So I wanna be as close to understanding it as I can be to, you know, be involved and prepare the people I love and share whatever my takings away are.
Um, I, I'm enjoying working with, with brilliant people like. We have some great people in, in the [00:54:00] businesses, and I, I learn a ton of them. And, you know, the, the every day, every day's a school day, you know, there's no, there's no way that I look at it and think I've got the answers here. You know, we're, we're, uh, like I said, those change cycles have gone from six weeks to four weeks to almost weekly at this point.
And I don't, I don't, I don't see how that can slow down. So I, I, I will, I will share that sometimes it's overwhelming, you know, sometimes you can have anxiety from it where you're thinking, how do we keep up?
James Reed: How,
James McHugh: how do our businesses keep up? Um, but that's part of what,
James Reed: with the pace of this change, with
James McHugh: the pace of this change.
But that's part of what drives me, you know? Um, um, and, and every, every, every business in our space has the same, the same challenge. It's not lost on me. Mm-hmm.
James Reed: So you are based now in America, is that right? That's right. Yeah. So, 'cause you, I, one of the things that I'm so interested in about you is you've sort of based yourself in different parts of the world.
Yeah. Very successfully over your career. Yeah. So the uk what's your view?
James McHugh: I think you have a lot of challenges. [00:55:00]
James Reed: Yeah.
James McHugh: Um, I think Europe has a lot of challenges. I think China and the US are powering ahead. Um, America has clearly shown that, uh, America first is the philosophy and ideology that's gonna be there for some time as somebody that lives on, in a way, both continents, I, I understand them, understand what they're trying to achieve and what they're doing, and I kind of look sometimes despairingly at Europe and say, come on guys, you need to move faster.
James Reed: Yeah. That's a hard thing to change.
James McHugh: It is. Yeah.
James Reed: Yeah. So I mean that seems to be the feature of the last 30 years, I think That's
James McHugh: right.
James Reed: Europe's got more and more tied up in knots. Yeah. And the technology developments are all happening in Yeah. America and now China. Yeah. You said earlier that you like the deep seek.
So what I, I dunno if you
James McHugh: know James. I lived in Beijing for six years. [00:56:00] Um, so I have a great affinity for the Chinese people. I think they're really lovely people. Um, Chinese government needs some work, but the Chinese people, really lovely people. Right. Um, I think we sometimes sort of think that there is a good side and a bad side.
You know, we're the good guys and some of the other guys are the bad guys. You mean around the world? Yeah. Yeah. I think it's a bit more nuanced than that.
James Reed: Yeah.
James McHugh: Um, you know, for the longest time, I, I had two, I still have two phones. Uh, the Huawei, you can't use it anymore. I can explain why, but I had a, a Huawei phone for the same reasons that, you know, what information that I could have that China would use.
I, I don't see why China would want it. Um, but, you know, I'm under no illusion. The information is also used by, by the US and possibly other states. So yeah. That's, that came out, didn't it? They're all listening to everyone's calls. That's right. And everyone's listening to everyone, so, so the idea that, [00:57:00] uh, um, you know, me giving my investment thesis on some company to China is gonna hurt it.
It's, it's, it doesn't worry me. Um, so much I'm, I, I think I know what I don't want China to know, and I, I'm also very aware of what I don't want America to know. Right.
James Reed: So you just see them as sort of players in this sort of I see them as players in this landscape. Yeah.
James McHugh: Yeah.
James Reed: And, and does the Chinese app work well?
I mean, is it Yeah, it does. Yeah. Yeah. Works,
James McHugh: works. Uh, uh, as well as, as the Western products. Yeah.
James Reed: But it was made for a fraction of the cost, wasn't
James McHugh: it? That's the argument. But I, I think they also say that they, they probably cut a lot of corners. You, I, I'll tell you a great story. I went to, she. Which is the, the old walled city of China and my partner, she studied, um, uh, Chinese, uh, writing.
Um, and in, in Xen they have a, a lot of galleries that kind of display some of the old, you know, art of Chinese writing. And [00:58:00] we were walking through this gallery and because she'd studied all this stuff, she was able to say, oh look, you know, that's the such and such from the third Dynasty. And look how perfectly he copied the emperor.
And that was a great compliment to both the emperor and to him. And now look at how this guy copied this. And that kind of dawned on me that actually it, it celebrated in the Chinese culture. It celebrated the ability, it's, it's flattering that I I have copied you so well. Right. And so the, you know, we, we often think of it as as theft, but Right.
I, I think it starts from a position of respect that, you know, wow, you guys are so advanced. We're gonna try and catch up by, by re replicating what you've done as a starting position. You know? So, look, I'm, I'm, I, I wanna stay aware of what China's doing. So that's part of the reason I use Deeps seek. I wanna be, uh, cognizant of the fact that, that probably they've accelerated that through learnings and money that's been spent in the, in, in the us.
Um, but I don't, I don't think that's a reason to close it down. I think it's there, it exists and, and we should, should embrace that stuff and use it and, [00:59:00] and learn from it.
James Reed: And keep an eye eye on what's happening. Correct. Correct. Correct. These are two huge economies that are developing very fast, correct.
Um, I, I Ai, I,
James McHugh: I, I've got a, I've got something there for you, which I think is really important. Yeah. So we, we just saw, um, the series c@u.com.
James Reed: Mm-hmm.
James McHugh: So u.com is run by a German guy, CEO, uh, brilliant guy, ex Berkeley professor. Um, they, they just raised a hundred million bucks at a 1.4 billion valuation. They have 20 million revenue in 2025 with the ambition of going to 60, 70 million revenue in 26.
Their technology is really good. I have seen a similar business in Europe run by two or three guys that don't wanna fundraise, so they, they can stay in majority control of the company. [01:00:00] They, they will lose.
James Reed: Mm.
James McHugh: The guys with a hundred million in the bank that can accelerate their growth. Richard and his team will win.
Um, I, I, I think that that's one of the fundamental differences that I see between the US and Europe. And
James Reed: that's because the money's there in the US or there's the desire in the us or Bit of both. Or I'll give you another
James McHugh: great example. So we're working very closely with NA 10 company that I think is a brilliant company out of Germany.
James Reed: Mm.
James McHugh: Um, they have just raised, uh, again, they've just raised, I wanna say it's about a hundred million bucks, but it's on a 2.4 billion valuation. But they've raised from Sequoia in the US believe it's Sequoia. Um, 50 plus percent of their growth, even though they're a German company, 50 plus percent of their growth is coming from the us.
So the customer's take up of technology is faster. The capacity to put money into companies that are scaling is. [01:01:00] Faster. Even a company that's German based needs to step over and get involved in the US market, both for growth and for financing.
James Reed: Mm-hmm.
James McHugh: So, you know, the, the challenges in Europe are, are, are structural.
James Reed: Mm-hmm. You know, so your focus will continue to be It sounds Yes. To me. The US Yes.
James McHugh: Yes. In fact, I, I, I had a house in San Francisco for years and I rented it out over COVID and I've just taken it back. Um, and I've taken it back because e everything is happening in San Fran right now. All of these companies are sitting in, in San Francisco.
I've, you know, I I, I took my daughter to a concert in San Fran about two years ago. Uh, it was just before Xi Jinping's visit. And it, and it, it genuinely was a zombie apocalypse. It was, it was terrible to witness what could happen. Uh, in, well, these are
James Reed: people with drug addiction, terrible addiction, terrible.
Around the center of, I've heard this. Just awful. Is it not like that? Now [01:02:00]
James McHugh: it's, it's back. Like, what's, what's happening? So what happened
James Reed: then?
James McHugh: Yeah. The, the AI companies came in. Yeah. Because it was happening. They dragged all the young smart kids in, told 'em, get in the office 'cause we need you in here. 12 plus hours a day.
These kids are working six days a week. They need somewhere to pick up sandwiches. There's a new mayor in town. They've managed to clean up most of the streets, but there's an energy, there's, uh, you know, young people and people working on something and mission statements brings in energy. Right. So I, I've taken back the house because like, I, I, I can have five, six great meetings in, in San Fran in a week, you know, and I, I.
So that's where, that's where the
James Reed: action is.
James McHugh: That's where the action is.
James Reed: Well, yeah. I wanna get on a plane. I heard it would've been become sort of hollowed out, but it sounds like you say it's back.
James McHugh: Yeah. It's amazing.
James Reed: It'd be a good place to visit again. No, I really enjoyed visiting there in the past. Yeah.
That was very positive. Well, thank you for coming all this way from San Francisco, James to privilege. Prove [01:03:00] to me privilege. Yeah. And been really interesting. And I wish you continue success with your ventures and, um, let's hope AI turns out okay. Well
James McHugh: go for truth seeking and, and in favor of, of humanity and, and we'll, we'll be okay.
I think
James Reed: at the other end of the process, starting a business, you know, you are looking at these technologies that you can sort of support and consult around. How do you, how do you identify which ones that you should pick? I mean, how do you, how do you pick winners in a sense like that?
James McHugh: Um, so the best expression I've ever heard is fast flowing rivers.
You know, if something's growing at 30, 40%, you can afford to make a lot of mistakes.
James Reed: Yeah. While
James McHugh: you're working in that space. And if something's growing at five, 6%, you probably can't afford to make a lot of mistakes to get it right. Um, and and the crazy part of that in something like technology is those fast flowing rivers can be right next to stagnant waters.
Like, it, it, it's just not a big, [01:04:00] a big change to turn around, look over your shoulder and see where Yes. Where there's super demand. Um, so I, I, I think in all cases, try and look to where the puck is going, not where the puck is, and look for the fast flowing rivers. And then you jump in with both feet.
James Reed: So right now that is
James McHugh: SAI data agentic.
James Reed: And that's where you've jumped in.
James McHugh: Yeah.
James Reed: With both feet by the James. Great.
I always ask two questions at the end. Mm. Um, of my guests, James, and I'm gonna ask you the, the first question because at Reed we love Mondays is what gets you up on a Monday morning.
James McHugh: Mm-hmm. Um, so I think my superpower is people. I, I, I really have a passion for great people. Um, what gets me up on a Monday morning is, is learning and working with great people.
James Reed: Very good. [01:05:00] And my last question is from my interview book, why You 101 interview questions You'll Never Fear Again, and it's where do you see yourself in five years time?
James McHugh: So, ba based on this discussion, James, and where AI is going, I, I hope. Uh, to see myself in five years time back here talking to you about whether I was right or wrong.
James Reed: Okay. Well that would be very good. I thought you might say President of the United Island, Jane,
James McHugh: that's not for me.
James Reed: There's better people for that job. Trust me. Yeah, well, all sorts of things can change in five years, so I look forward, I'll invite you back and we'll find out. Brilliant. Fantastic. Thank coming.
Appreciate [01:06:00] it.
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