How SpiceAI is Tackling the AI Tooling Gap with Luke Kim

In this episode of Founded and Funded, partner Aseem Datar sits down with co-founder of Spiceai.io to talk about the power of building tools for developers, the difficulty of integrate AI (SpiceAI is making this easier for developers) and moving from a big company to building a startup.

Transcript below

Welcome to founded and funded, I’m Erika Shaffer from Madrona Venture Group.  Today, partner Aseem Datar, sits down with founder Luke Kim of Spice AI.  Spice is a new startup focused on helping developers integrate AI into their applications.  The founders Luke and Phillip LeBlanc recognized that in order to integrate AI, developers need data engineers which is a high bar for startups, so they set out to build tools to alleviate this requirement.

The first implementation of Spice is focused on their blockchain data platform.  This public platform, enables developers to access Ethereum and smart-contract datasets, like Uniswap, across real-time and historical data with a single SQL query.

Spice plans to extend the platform to other blockchains, like Bitcoin and Binance Smart Chain (BSC), and to traditional time-series datasets. It will be available in beta next month.

Aseem and Luke dive into the power of building tools for developers. They talk about the transition from working at a well established company to building a startup and the different skills that are necessary to make that successful and how AI is something developers want to leverage to build intelligent applications – but it’s not easy.

You can learn more at Spiceai.io

Aseem: Hey, Luke. Thank you so much for joining us today. I’m really excited to have you here and get the opportunity to chat.

Luke: Thanks, the same. It’s also good to be here. Yeah, I appreciate the warm welcome.

Aseem: Awesome. Awesome. What part of the world are you at?

Luke: I’m in Seoul, South Korea. And yeah, fun fact about me. The first thing a lot of people ask me about is my accent. I was born in Korea, but I grew up in Australia and spent most of my childhood and University there. And then came over to the U.S. about 12 years ago, spent the last 11 years working out of Seattle for Microsoft, which is of course where we first met.

Aseem: Yeah. It’s amazing that I was just recollecting and counting backwards. I think we’ve known each other for over 10 years now, which is amazing, and I think in cloud world, its dog years, so it’s a great to be reconnected.

I’d love for our listeners to know a little bit more about your background. How the journey at Microsoft? What did you do at Microsoft and what team you’re on? Any exciting projects you worked on? So, it would be great to start there.

Luke: Yeah. For sure. As I mentioned as that 12 years at Microsoft. Even before that, I had done internship and I was part of the student program. But in the last two years, I was in the office of the Azure CTO reporting to Mark Russinovich, which there which is just an amazing experience. I got to build an incubator there where we worked on a whole bunch of interesting projects.

Some have been released. Most of them were open source and some have yet to still be. Just an amazing opportunity. You got to work with people across Azure, the industry, a bunch of customers, and what comes from cool stuff. So, three years before that worked with Nat Friedman, who just stepped down as the CEO of GitHub, and built a bunch of the services and infrastructure behind both GitHub and GitHub actions. Along with a product that we had called AppCenter, which helps develop his build and operate mobile app mobile applications. And yeah, so most of my career been building tools and services to help developers build software be more productive.

Aseem: Well, that’s amazing. I think what a stellar career at Microsoft, working on two big products, of course, GitHub and then Azure. Tell us a little bit more about, what excites you. I know you talked a lot about like working with developers but give us a little bit more color on what is the exciting part, tell us a little bit more on the project you work at Microsoft.

Luke: Yeah, for sure. There are two things that come to mind. When I think about developers in kind of that track, I just think that it’s an amazing way to scale. If you think about the leverage that you have, you can, if you’re a developer, you can build an application. You could build that overnight, and that could affect millions of people, right?

That is there’s very few other places in the world where you could spend a week building something and affect so many people’s lives. I think. Now if you take building tools and services for developers to help them do that, you almost get this double leverage. I just think that’s an amazing way to contribute back to the world.

That kind of leads into the second thing, which excites me is, I think at some point we’re all asking the question, like how can we contribute back to the world? How can we contribute to people? For me this like amazing set of leverage through helping develop is help other people. I’ve been privileged enough to be in my career at Microsoft in positions where I’ve been able to do that and lead teams and build teams. I was literally hired out of a university as a grad hire. It was probably just a year into my career. I was working on visual studio, and I was working on the debugger like some deep level stuff. At the time we were just transitioning to Windows. And that’s a new architecture. So, we didn’t have the tools to write that software productively.

Those are set of tools called ‘system internals’. That helps you do diagnostics and write software. Mark Russinovich at the time, he had just had his company acquired by Microsoft, a technical fellow who had helped write the tools. I was like this grad hire and I was struggling with writing the software.

And so, I emailed him, and I said, “Hey, Mark, are these tools available for this new architecture? Because it would really help us run the software.” He replied, “No, sorry.” But it turns out that I was a little bit bolder and so I replied, and I said, “Hey, if they’re not available, would you be willing to give me the source code? And I will go and convert them and put them over to this new architecture, because it would really help me out my job.” And he said, “that’s an interesting idea.”

At the time, only just a couple of people in the company had access to the source code. So, he emailed me back. There was no Git at that time. So, he literally emailed me, “see files” and I started doing this port and I would email them back to him. I did a couple of tools and within about six months, a bunch of people across the company were using these tools to build windows.

That’s how we first got to know each other. From that point on, I was working. This is internal source for the rest of my career. For like the next 10 years, I was like a pseudo developer or manager for these insistent tools.

Yeah.

Aseem: How wonderful and I think it’s amazing to be a part of such a large enterprise yet have the personalization and the drive. Two things that you said stood out for me. One was the ability for you to work on scale projects. You talked about the two for one kind of thing. When you build tools for developers and when developers build solutions for the world, you get the double benefit and the second thing, which you also highlighted, right? Finding these white spaces, right? These spaces of opportunity that can then be converted into products that many people can use, which is the example that you cited working on working with Mark. So, coming back to what we were talking about, you had a wonderful journey at Microsoft and a wonderful career. You’re moving mountains. Tell us a little bit about this thing called DAPR that you worked on, where we’d love to understand what that was and how that has bearing into what you’re doing today.

Luke: When I first went and joined Mark’s team I said, “what should it work?” And he’s like, “well, there’s a couple of people in my team. They’ve been looking at this runtime that helps develop is build distributed applications.” Because as we’ve moved to the cloud and not just the cloud, but the cloud and edge, these applications have become more and more complex.

So now before you had an application, which was just on a single machine, 10 years ago, now you’re dealing with all these distributed pieces across the different servers, different infrastructure. How can we make that even easier and benefit developers so they can just focus on their business application?

What DAPR does, is it abstracts away a lot of the complexity. So, if you just need storage key value, you instead of going and having to, not only choose a technology if they must choose Reddis or Cosmos or some other store, but I can also just use a simple abstraction over HTTP rest APIs to store my state and focus on my application.

That’s what DAPR does, it provides a whole bunch of these building blocks in terms of state. It has Pubsub, it has Secrets Management, it has a whole bunch of these like basic things that you need to build a distributed application. It lets you just focus on building an application and not doing all the distributed systems behind the scenes.

At the beginning it was called Codename Actions. They’d spent maybe I think, two months on it at the time. I came in and we built an entire team around that and built up this project and released it probably within the first three months.

So, we released like a private preview of it. There’s a whole bunch of lessons from that, one of the things was that it was radical, it seems basic right now, but it was a radical idea when we first did it. We got a lot of pushbacks both internally and across the, I wouldn’t say necessarily across the industry, but a lot of developers ask, like why do we need this?

We just pushed through; we keep kept working on it. After about two years, when we developed it out, we had so many people come back and some of those same people are like, why do we need this? To say, this is a savior. This helps us be so much more productive.

I think as a founder you always go through these moments at the start where you’re doing something just a little bit crazy, just a little bit out there. A little bit beyond what people have as their normal mindset. And you’ve got to be able to see the vision and push through that.

What I say to some of the guys on my team, though, at the very start, they were getting a bit down because, they’re getting not as much of the attraction that they thought they were going to get. Look, I said to them, this seems like a crazy idea now, but wait, in two years’ time, some of these people will be telling us that it was their idea all along.

It was just so funny. Like two years after that we had people come back and say this was like our idea like we believed in this from the start. People will come around. If you truly have something. Yeah, I’ll say, in terms of the fanboy movement, was you just think this is just a small open-source project, but I had the opportunity to be in a Satya a staff meeting, and Satya  knew about DAPR and he was supportive of the project. That was just super cool. Like we were part of these massive organization. I think it was like 140,000 people at Microsoft. Yet Saatchi, like he knew about DAPR. He knew how it worked and he knew how it makes life better for developers.

We were able to present that to him. One of my fanboy moments was, I was able to debate with him how we could make applications better in a staff meeting. So yeah, I thought it was cool.

Aseem: No, that’s awesome. I remember being in that meeting and I remember the red side but that’s a story for another day. Hey, as you, one thing I think our listeners would love to hear from you is, a great time at Microsoft. You’re on a meteoric rise as far as career is concerned, but then I think eight months ago you left to go build this thing called Spice. ai. Tell us a little bit about like, how you thought of the opportunity? What you’re seeing in the world.

What are the challenges that developers face today? You talked about building applications for the future, which is a theme. We call it as ‘intelligent applications’ over here at Madrona and we have a thesis around it. We’d love to hear from you on your, in your own words, on what challenges are you seeing today? What are the core value prop that you’re building forward and how do you expect to change developers’ lives in the future?

Luke: Yeah, that’s it. There’s a lot. That is a great question. In terms of transitioning from a big company to do a startup, it’s a journey, right? If you’re in a big company it’s, especially today in tech, it’s such, I think a great opportunity to you. You have the ability, have all these resources at your disposal to really go make a massive impact. Of course, you also have a bunch of the safety and security in terms of just regular paycheck and all that goes along with that. Stepping out into going and doing like into a bunch of ambiguity, a bunch of unknown, and doing something really takes I think, you to be intentional and make a choice about what direction you want to go in your life.

Coming back to what I said about this stuff, to me, you get to a point in your life where you want to decide, like how you want to contribute to the world. For me, I always knew, I had done some stuff like a long time ago, 12 to 13 years ago. I knew for me that the way I wanted to contribute back to the world is in like leaps of innovation, like in ways where we can really move the needle.

To me that was like doing a startup and doing my thing. Honestly, there was a lot of fear that we had to work through to get there. There’s a great book. It’s called Feel the Fear and Do It Anyway. That was the theme. It was like, yeah, it’s scary. At some point you got to choose how you want to contribute.

For me that was leaving the safety net of a big company and going, doing. Yeah, if you can find people to go do it with, I think there’s also something special about the start of a startup. I’ve heard this before in that it only ever happens once.

Like you can never go back and redo like the startup something, it’s like the start. And I think experiences are also even better when they’re shared. If you can go find a couple of your friends or a couple of people that you really respect, you can go and do that style of this startup and do it together and have a lot of fun. I think everyone should experience in my opinion, at some point in their life.

Aseem: That’s great. I’m going to, I’m going to bookmark that reference to that book and make sure I read it. But more importantly, I think what you said is as along the lines of finding your own tribe, right? Like finding the people that you deeply respect that you’ve worked with in the past and who would be allies in going and solving those tough challenges. So, coming to understanding the developer space like a space that, we’ve looked at from close quarters, both at our time at Microsoft and even now, like what challenges are you seeing in the ecosystem? How is Spice. ai positioned to think about solving those. Maybe I think I know the story, but it would be great to learn about how the idea came to you what you experienced in your time and how did you formulate this thinking around building Spice .ai?

Luke: Yeah. So, in terms of in intelligent, like you mentioned intelligent applications and you have a whole thesis around that. Well, it all really ties together with developers. I think there’s going to be a few challenges going forward. One I think a lot of people in the tech space already know, there’s just so much demand for skills. I think it was even back like 2018. I remember Saatchi, one of the conferences saying that more developers were hired outside the tech industry then within the industry. So, people who are lucky in banking or insurance or whatever, there’s more developers outside. That was just a, it was like an ‘aha’ moment to me, an amazing a statistic because if you follow that to directory, then this is going to be more and more demand for software, more and more demand for developers.

If we are going to meet that demand in the world, to make all the software and to make all these applications that people need. Then we’re going to need help to build software. To me, what I saw or both at Microsoft and across the industry, and in my own side projects, that it’s still too hard. One, I think to really be productive and build a software. But also, if you think about that demand for software, we’re going to need help. What I believe is that help can come from AI because AI is not a magic bullet.

It’s not like some magical thing that’s going to solve their problems, but what it does do, and it does do well, is it helps. It basically you write a program that runs program for you, right? So, like you could take a hundred developers in 50 years and do like a whole bunch of image processing and just normal code.

Or you could build an AI model that will go and write that code for you.  So, what I believe as a thesis going forward is that intelligent applications are not just going to be a nice to have but are going to be required. It’s going to be a necessity in the next 5 to 10 years to not only compete, but just meet the demand of how much software that we need. Because we’ll use AI to help build software as developers, it’s still too hard to leverage AI, to help build applications and help you build a better application faster.

It’s really the thesis of the company. We want us to go out and solve that problem and solve that gap. It’s honestly a difficult problem to solve, but if we can help developers build better applications faster using AI, then I think it’s going to not only help developers but help us thrive in kind of this world going forward.

Aseem: That’s amazing. Look, and I think we share that worldview. Making lives easier by, by being able to create software at a faster pace. That’s more intelligent and that can self-sustain to a certain extent. I think one of the things that you said that’s most interesting is how you get the scale effect, right? If you’re able to empower developers, then you’re helping them write software faster, which means that you’re getting to the meat of the problem and the solutions faster in whatever industry. There’s a saying where every company is a software company and I see that true more and more in today’s day and age, especially because of distributed computing, because now you have access to all these tools, memory, compute, storage that otherwise you would you’d be hard pressed to get. So that’s a big point of view that I wanted to highlight.

Luke: It’s just like one anecdote on that in terms of scale, like we saw his company and they had spent three years building this algorithm to basically do routing on the edge. Then after the three years, someone came along and said, “Hey, I wonder what would, happen? Just as an idea, what would happen if we tried goodie and our AI model to see if we could do this right. Could we get Cyprus?” They spent like three months on that AI model, and they got better performance. They got like a ten for one scale by applying AI to the solution. Now, of course, like I said, AI is not a magic bullet, but it gives you an idea of just how much faster you can develop some things then just a traditional approach.

Aseem: Yeah, that’s cool. I think that sort of ROI is amazing from a developer point of view and who wouldn’t want that. So, following up on the Spice .ai conversation, tell us a little bit about, potential customers you’re talking to, any lessons learned so far, and maybe just give us a little flavor of the use cases that you guys are finding interesting, especially with Spice .ai at this early milestone.

Luke: Yeah. So, with this Spice the idea behind it was to help developers build these intelligent applications, not just do AI. I think there’s a ton of AI companies out there and we’ve made a ton of progress. But if we can use some of the techniques that we’ve really matured as an industry of the last 10 years, things like I really felt, Dev Loop, we live preview, so the idea is can we take some of these things and help develop is built in an intelligent application, faster, better.

If you think about, what you would do as an intelligent application, like what is the intelligence? For us, it boiled down to basically a decision engine as the main core thesis. If you think about what you’d want an AI to do in your application.

Well, we think it’s to help make decisions. If you think about a couple of use cases around that, we had a food delivery application and Uber Eats and they basically had to, when they got an order, they must decide about what delivery driver to route that order to, like what’s going to be the best. What’s going to get it to the fastest. That’s a decision. When they first started, they just use people, they just hired people. They would get orders and route it to people. Route it to these drivers. If you could take a decision engine and put that there, you can get the order, have AI decide fast, which is the best way.

There are so many different cases like that that you can choose. Everything from even just like retail trading, these days really took off with the things like Robinhood. But deciding like what stock to buy. That’s a decision, right? We had a case around, retail shops where you order online, and you pick up in store. Well, what store do you want to pick up that item from?

Right often it’s not actually the store that’s closest to you. And so, it’s a decision. What we started to really realize is there’s a lot of interesting cases where you can build an application where you’re making these intelligent decisions. We started really working on that, but of course, as a startup, you must really focus and where we started a small team, three people. What we found is there’s quite a lot of interesting use cases right now in the FinTech space. You can imagine there’s also a lot of decisions to be made. So not only just like trading decisions, but for example these days especially in the blockchain space, distributed finance there’s many different exchanges that you could, send your order to.

That’s a decision, right? What exchange is the best exchange throughout my order through. So, there’s quite a lot of different cases around this.

I think going forward into the future, especially around like web three, if you have things like, well, should I interact with this person or not? Does this new token, is this going to be a scam or not? And that’s really what we’re going after right now.

Aseem: Yeah, that’s amazing. I think the way I’m thinking of it is you’re really building out an intelligence platform or a decision engine that can have vetted applications all the way from FinTech to retail. Shopping to food delivery. It’s amazing that, so much of these decisions in the future can be thought of as intelligent and automated, which then saves, whole lot of logic writing as well as like individual point solutions. Which is what, what makes it very exciting. I’m privileged on behalf of Madrona to be a part of this journey with Spice.

So, thank you for that. We couldn’t be more excited to see these come to life soon. One of the shifts gears a little bit, Luke, and talk a little bit about, the journey of the startup and as you’re going through building Spice .ai, like how are you thinking about, building a team? Are you thinking about, any early lessons that you’ve seen and learned so far, that would be good to share with the people?

Luke: Oh, so many. One thing, I think just coming from big company to a startup, that a lesson that we learned, it’s a completely different mindset. So, what makes you successful in a big company often is the ability to be very responsive and very reactive, right? So, a problem comes along, and you go back and solve it, right?

We must respond to this thing in the market, then you go solve it and you can have a lot of success that way. Often the opposite, you must go make things happen. Customers don’t come to you, like you’d go out and make them. In fact, we hired an AI ML engineer. One of our first hires, the way that we found him is I literally went through Reddit posts, and I looked at people who had posted good analysis of deep learning frameworks at the time in the area that we were looking at.

I was like, this guy is he’s obviously written some really good content. I just DM’ed him. You’ve got to as a start, just go out and chase down these opportunities and make things happen. So, I think as a startup founder, that’s one thing that you really must switch your mindset from.

From having stuff come back for you, these opportunities show up and just going in and making things happen, chasing us down. So, we started really building this thing in July last year. When we first started, we knew this general thing that we wanted to help developers, but we had no idea how at all, like we literally had no idea.

So, we started 1st of July, by the end of July, we’d build a prototype. We just liked different ideas and we started showing that prototype around. We didn’t expect to do any funding or early raising at all. We thought we’d probably go for a year before we would have to, or even want to do that.

But we shared around and gelled with different people. We were excited, we have some awesome investors on board. People like Mark, for example. Nat Friedman as well as on board. Thomas Dohmke, the current CEO of GitHub, and these guys all really believe in the same philosophy, which is help developers help people. To what happened was in terms of the fundraising journey, people started asking to invest in. Once they saw this thing and so we decided to do a very small pre-seed round in about July/August and that I’d never raised before. Like I did everything from scratch.

Go find people who are like one or two steps ahead of you. So, we were like doing a pre-state. So, we found people in the seed round and a series A round. Who’d just been through that. Cause obviously things change and got advice for them. So, I have a good friend whose David Siegel, who’s a CEO of Glide Apps, which is like a No Code App platform solution. He’s two steps ahead. In between a seed round at the time. So, he gave me so much advice on how to do it. So as a founder, go find these people to do that. The second thing is, really lean on like a lot of VCs that are investors will come to you and say, look, how can I help?

Take that help, lean on it. So, with Madrona early on and with you, Aseem, it was the same. Also, Tim there at Madrona were just so amazing. So how can I help? And I just leaned, I said, look, this is all the ways you could help.

We need help hiring. We need help figuring out like this direction. We want to decide here and how should I also think about fundraising? Like how much money should I raise, for example. I think that support even for when we first did our PR and the kind of announcement about our raise. Madrona did so much help.

I had no idea how to do a PR thing. I had done some PR at Microsoft, but we had a team. The way I did PR at Microsoft was I go to the PR team and work through them. Madrona really helped us do that. So overall, it’s just it’s been a really been an awesome partnership together.

We have, I think, 33 investors all up and we fit them all into this small 1 million rounds. We were offered a whole bunch more money, but we turned it away because we really wanted to focus on solidifying what we’re building first, before we took a whole bunch of money. I would say, there’s a whole range of people who get really involved and help you out and people who, I’ll give you my money and you go, you run with it type thing.

So out of those 33 investors, I think Madrona just helped us out a ton and it’s clear to see who’s on point and on their game. Tim and you, Aseem, have really helped. So, thank you.

Aseem: I couldn’t be more thankful, thanks for the warm words, Luke. But I do think that you’re right about, it takes a village to go create something amazing and I’m so pumped to be a part of the journey. I’m positive that, we do build something amazing and you’re already on the journey. You’re two steps ahead in your own words on this journey. So, it’s amazing to see the progress that you’ve achieved in shadow such a short amount of time.

One last question before we let you go is, what’s your take on the Seattle ecosystem? We’ve talked a lot about the last 10 years, the growth that Seattle has seen, the Northwest is experienced with, the Amazon, the Microsoft, the Google, being in the backyard and becomes the cloud capital of the world. How are you thinking about hiring? How do you think about adding talent? Then any comments or observations of the Seattle ecosystem.

Luke: Yeah. I often think we tend, I’m not sure it was also developed is like this, but we tend to think things in like binary, like it’s this all bad. To me, I often look to think about things in hands, not ours. To me in terms of a lot of the world going to remote, I think that there’s benefits, obviously, remote there’s also benefits of coming together. I believe, Brian Armstrong from Coinbase has written about this quite a lot, it’s in terms of his transition from going to a remote first company. In that the reality is the chances of getting top talent.

The chances are that they’re going to be within, a 15-mile radius or whatever of your HQ is obviously very low, not true. So, if you want top talent, you’re going to have to go chase them around, chase them down across the world. At the same time, there’s a huge amount of benefit to like human connection, and really being together in the same place. I think there’s so much innovation and creativity. I think we’re moving to a world where you must chase down talent, wherever it is, and enable remote work at the same time, have opportunities for people to get together. So that might be like offsites, coming together once a quarter, meeting people in different places. In terms of this yellow tech ecosystem, I totally believe that it’s cloud capital.

If you want to, if you’re in distributed systems. Also, AI. There’s a whole bunch of AI stuff that happens in Seattle. So, if you’re anywhere in that space, in Seattle, it’s a great hub to do that. So, it’s like you have remote teams, but you also bring them together. I think Seattle is an awesome place to bring your team together. Also connect with other people in that ecosystem that really has deep experience in both cloud and AI.

Aseem: So cool. So cool. The way you think about it. I think what’s mostly energizing is there’s distributed systems, there’s distributed development, and now there’s distributed teams. So, you, I think you summarized it well. Talent first, and I think everything else follows, which is a great mantra to live by.

Hey, I’m so excited to have heard from you and, being a part of the Spice journey obviously, people know where to get ahold of you. I know, you’re hiding in the area and beyond, to anybody who wants to reach out to Spice. I think the best way would be to communicate with you and fill that.

Luke: Yeah, absolutely. So, if you just go to Spice ai.io/team. Sorry, slash career, that is careers. That’s where you can see our job postings. You can also just grab us on Twitter, LinkedIn, all the usual places as well. Yeah, so Phillip and I co-founders, you can search us out.

We have a tech crunch article out there, which also gives a little bit of background on what we’re doing as well. Just search for Spice .ai on Tech Crunch.

Aseem: Awesome. Hey Luke, it’s been an absolute pleasure talking with you and we’ll look, I know, you release updates about Spice on GitHub and that’s another place where developers can go to check you out and see the progress you’ve made. We’ll look forward to continued dialogue with you soon. Hoping to see more awesome news from Spice shortly.

Luke: Yeah, absolutely. Yeah. So, our project, the underlying engine we really believe is build up with the community. We are developers. So, it’s all opensource. You can go grab it, all free, and you can run it yourself. One thing, I just want to encourage founders as a last note is, if you take that story from the start where I was a grad hire, there was a technical fellow, you don’t often like just go email these people. I’ve emailed Saatchi before I’ve emailed all these people. Like I would say, as a founder, you’ve got to go do those things and don’t be afraid, be bold, right? So, if you must go email like a CEO, you must go reach out to somebody, go do that. I really encourage you to go make things happen. Don’t be afraid to be rejected or whatever it is, even if you think you don’t, you’ve got no writer to do this because of your position or whatever, just go after it.

If you email someone like you could lead into a great, like for me and Mark, led into 10 years of development together. Yeah. I just encourage you to go through those things.

Aseem: Awesome. Wise words, Luke. Thank you so much for making time out of your busy schedule. I know you’ve got a business to go build. Thank you so much for taking time.

Luke: Thanks, the same. It was a pleasure. Thank you.

 

 

 

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