SPEAKER_00: they rewrite it they would literally go into the answer and change the answer and polish it and they would send that to two finance people and then look for okay is it clean right you do a double blind kind of situation yep that's what scale ai was doing all this time and they were making more and more money from it so now the question is is meta going to just turn that off and just say we're not going to provide that to other people we're just going to use it for our own needs and that would make sense for them to do it but it would also be super anti-competitive and i'm sure this i don't know what's going on with mna we talked about it i think last week on friday maybe even and you know as i said i just look at the game on the field everything's all these things are happening so maybe they're just going to get a pass but that would be a thing to look at did zuckerberg buy this to kill it this week in startups is brought to you

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SPEAKER_00: off your first year all right everybody welcome back this week in startups he's alex william i'm jason calacanis we do this monday we do it wednesday we do it on fridays and we have a ton of startup

SPEAKER_03: big tech little tech everything in between news and i am still on the road alex i'm still on the road

SPEAKER_04: i've just given up you going back to austin i think you went to texas you had some barbecue

SPEAKER_06: play some poker and now you're like you know what i'm going to asia i'm going back to california

SPEAKER_00: you know here's the thing it is brutally hot in the summer and your kids get out of school the fir end of may first week in june i think somehow related to the heat and then they start up again in early august which is crazy you're like wait we're starting school in august that school started

SPEAKER_03: in september au contraire mon frere it starts in august so uh did a week in singapore that was great

SPEAKER_00: i've got you know we talked about my feelings about singapore um thinking about bringing founder university to asia at some point yeah so that was like my little exploratory trip went back to los angeles spent some time at lashify the company i'm on the board of beauty company and the family was out for two weeks doing a little vacay and seeing friends we have a lot of friends in los angeles from our decade living there yeah did the disney thing that was great then i went up uh to see some friends up in

SPEAKER_03: um palo alto lost a ton of money playing cards i'm playing bomb pots with chumaz and my friends uh and uh got to see my friends ai company and spent some time there on saturday he's crushing it

SPEAKER_13: actually i i have a picture of that and i gotta say jason i did not know that all of our discussions about rocking and enjoying the march uh kind of around the ranch had led you to this level okay of muscling i i didn't realize you'd gone wwe and less nerdy so uh yeah at xai uh on saturdays

SPEAKER_00: you know we we push code we get the new models out grok 3.5 and then uh we we uh we lift we lift but

SPEAKER_03: i met a bunch of great team members over at xai i spent the day there with elon and some friends that's yeah all about that's the original from roman roman's a great guy working on cool stuff over there at x and xai and uh man they're crushing it it's just amazing the pace at which ai is moving

SPEAKER_00: i was i can't really talk too much about the meetings i sat in and yeah the stuff i saw there but you know going to an office on a saturday and seeing the lot full and seeing people there till

SPEAKER_03: eight o'clock at night building the future i am so enthused about the future of ai and then also

SPEAKER_20: i'm dipping a little bit into ai doomerism like i am really glad at the work they're doing and then i'm a little bit concerned about how powerful this stuff is and maybe the wrong people getting their

SPEAKER_03: hands on this with not great intent i actually now understand why so much time and care was put into open ai original mission before they became closed ai and a corporation when they were like a non-profit yeah and i understand why some of these people are doomerous you know it's like it's uh it's moving at a pace that i i have never seen and i've been in the tech industry for 30 years without without breaking

SPEAKER_04: confidence what can you tell me about the pace of improvement that you're seeing is this multi-agent

SPEAKER_26: frameworks is this just smarter models with more context like uh which direction are you seeing this

SPEAKER_03: progress i think it's everything and i think the agentic stuff is super interesting because there's a lot of agentic stuff going on and this is all public knowledge but that you actually don't see

SPEAKER_00: so there's one thing for us you know we've been working on some agentic stuff here and we're like oh how can we look at what people are talking about in these different communities and surface interesting stuff you know you call that curation previously so could we have a bot doing that constantly and putting it into our group chat and telling us hey here's an interesting startup

SPEAKER_03: maybe we could source an interesting founder in the building public you know groups you know we track on the web looking for cool founders anyway long story short um i was like they're doing some stuff with agentic that you don't see and they are looking at some of the world's hardest problems and they have you know groups of agents trying to solve those problems in like a competition kind of thing which is all public knowledge like that's like a thing but to actually see people doing it and how it's working and their how thoughtful their approach is to it it just makes me think grok is you know i know it's top whatever it is four or five in a very competitive race you know i think they have a really significant chance of being the winner um you know whether they're in the final two three four you know depending on how you judge these things but you know let's say it's pretty safe to say final four i think everybody would agree you know in that final four i think you know

SPEAKER_29: the combination of um the social asset they own in twitter combined with colossus and their ability to build big iron and infrastructure very quickly all of it's just really inspiring um that was the

SPEAKER_04: pitch that antonio gracias made uh last year when we were all hanging out together up in uh was it napa was it sonoma one of the two napa yeah he was like look you know without proprietary data there's no value in an ai model essentially was his argument and uh so we're kind of seeing the the fusion of it

SPEAKER_13: just backing up what you said though jason you said uh top four top five it's interesting to look

SPEAKER_04: at where grok sits today this is the old kind of legacy lm arena user but it's pretty good and if you take a look here you see google open ai and then right there is grok and right there yeah what you

SPEAKER_33: don't see here is much from meta in this top list one deep seek you know a little bit from other

SPEAKER_35: companies there yeah get gpt gemini yeah i mean that's those would be my final four yeah i think

SPEAKER_03: you know if you go open source you kind of have to go slow to go fast so you know but to think

SPEAKER_00: we're living in a time when five giant four or five giants in technology have all decided this is the

SPEAKER_29: prize and we're going to work towards it and uh then thinking about job destruction or displacement

SPEAKER_37: that's the thing that's got me i don't want to say staying up at night but i am i keep teetering between it's manageable and it might not be manageable i'm sorry to be a doubter at the start of the show but when i saw people burning the waymos they were calling the waymos during the you know riots disturbances whatever ice raids plus riots you know i don't want to make this a political show here but during those disturbances when the bad actors were lighting the waymos on fire they summoned those waymos there to light them on fire so let's think about that for a second people were like i'm angry yeah how can i displace my anger robotic taxi they didn't burn the police cars you know when the lakers win they find a squad car they flip it over and light it on freaking fire yeah they weren't lighting i didn't see a police car on fire i'm sure oh they did see one get like rocks thrown on it whatever but i they decided they would call a deliberate act on their phone

SPEAKER_20: they signed up the waymo app and told them come to us and the waymos came to them yes like um what are the what are the uh animals that will like go on like a sacred march to their death lemmings well that's lemmings going off a cliff yes that's but that's not a real animal in the world but like do the elephants slowly walk to like some sacred place to lay down and die you know uh lemmings are real by the way are lemons a real thing okay sure you just have to be doubting

SPEAKER_48: my entire graveyards thank you producer editorial director so the elephant graveyard you know i felt

SPEAKER_37: like they were like these stoic creatures marching towards their death and then so going back to the pace of ai you gotta think there's people at waymo right now and of course tesla doing their uh you know

Chamath Palihapitiya: dry run you know very safe very small if you're running a business every missed call is losing you money if i need a plumber i'm not waiting for someone to get back to me of course not i'm just gonna call the next number on my list right i got a plumbing issue but with open phone you'll never miss an opportunity to connect with your customers why well open phone is going to streamline and scale your customer communications say goodbye to voice jail nobody wants voice jail everybody wants the voice the human if a human's not available how about an ai agent that can be set up in minutes by your friends over at open phone and you to handle calls after hours hey it's two in the morning

SPEAKER_37: here's our ai agent we're going to grab the new lead while you're sleeping open phone is a no-brainer see why over 60 000 businesses like mine trust open phone open phone is offering twist listeners 20 off your first six months at open phone dot com twist if you have existing numbers with

Chamath Palihapitiya: another service open phone we'll port them over at no extra charge open phone no missed calls no

SPEAKER_29: missed customers and oh and by the way i got to drive in a tesla cyber cab that was the other big thing i did on saturday i took three rides in a cyber taxi or the latest build of the cyber taxi software and um um yeah it's good it's better than my model y with the hardware four and it was really tight i have to say like the the things i've talked about before where it's hesitant or it you know jitters a little

SPEAKER_37: bit you know going to a stop sign pulling out coming out of a driveway making a left turn all of those

SPEAKER_00: kind of things it made a u-turn at one point that was it was kind of a brooklyn u-turn i gotta be honest it was like yeah i'm gonna make a u-turn bang just did it and i was like okay this is what i'm looking for in a in a driver so i think uh tesla's gonna have great success i think they're going based on the reports i'm saying i don't have any inside information here but based on the reports i saw

SPEAKER_03: of people trying to find those in uh austin yeah they've um i think they are going to do something safe and small in austin and take their time which i am in favor of i actually think they should

SPEAKER_00: have a safety driver i think they have safety drivers remote and in the passenger seat i saw

SPEAKER_55: a picture today i don't know what the reality is but june 22nd is the launch date in theory for

SPEAKER_57: the tesla robotaxi thing they said it might move but they're they're driving around so yeah yeah no

SPEAKER_26: i'm just saying i'm excited to see what they come up with and jason just a point of clarification were you in one of the new two-seater cyber camps that were shown on earlier or a okay you were a

SPEAKER_60: traditional tesla with new software i was in the model y that they're using and the model y that they're using is uh for that specific uh robo taxi so there's cyber cab which is a two-seat thing

SPEAKER_29: robo taxi is a generic term so i was in the cyber cab not the robo taxi wait wait okay i was in robo taxi

SPEAKER_00: not cyber cab cyber cab is the design of the two-seater that looks like the cyber truck right that's how you remember it it's cyber that's the cyber one that's not out that's not what the test is

Chamath Palihapitiya: going to be um it's model y's you know the juniper release of the model y which is really beautiful uh we got a lot on the docket i think we got to get some docket going here so yeah i'm uh i'm in um

SPEAKER_03: right now i'm in uh uh santa barbara for a big banks conference uh i'm not speaking out i'm just a guest here but that was really nice of them to invite me uh i wouldn't say who because i don't

SPEAKER_67: know if it's a public thing uh and then saturday i got to go down to la for the launch of the all-in tequila they're having a little launch party but finally i get back to austin finally get back to

SPEAKER_71: austin after three weeks on the road man too long on the road i i hate being gone for more than two

SPEAKER_04: days i don't know how you're holding together for three weeks but points to you um all right let's talk about some stuff so first of all i have a a package of questions for you jason about startups

SPEAKER_13: and best practices there's a really cool company called post hog and the recent news item is that they raised a 70 million dollar um round led by stripe that's kind of to the side what's really interesting about this company is how it's kind of breaking all the rules that startups are often going against so as i was just digging through their materials it's all very public but they are an open source software company but they also offer very generous hosted free tiers they don't do outbound sales they like to cut prices not raise them they do monthly pricing with no lock-in and they don't really seem particularly interested in upselling you on pretty much anything this cuts just dramatically against traditional sass growth techniques and so i'm kind of curious

SPEAKER_74: when should startup founders following the post hog approach and go against conventional wisdom

SPEAKER_60: great question so yeah i see this post hog yc back startup raised 70 million uh by stripe it's

SPEAKER_03: very interesting that stripe keeps investing in companies i think that's like uh an under reported on fact that they are kind of like a venture capital firm at this point i wonder how

Chamath Palihapitiya: many companies they've invested in now you know we could pull up that data but it's it's definitely i think low dozens like maybe a dozen or two i would guess like maybe it's 15 or something that

SPEAKER_77: we know about 10 or 15. um so this is all in the category of uh business model innovation so when vcs say you know hey how is this innovative well you could say it's a new technology it's gps

SPEAKER_00: yes it's consumer gps it's built into your phone and now uber can go find you doordash can go find you you can go find your doordash or etc uh you can use maps it all makes sense right that's a

SPEAKER_29: technological innovation not a business model innovation uh a business model innovation comes

SPEAKER_77: when something that was extremely uh was priced in one way is delivered in a different way with a

SPEAKER_03: different business deal so let's think of one um if you were to buy enterprise software uh and that would be before cloud you had what was called client server so instead of paying by seat you would

SPEAKER_00: pay for servers and a server had a certain amount of capacity so if you had a document management piece of software like google docs is today but they used to have like dedicated servers for that before google docs existed and and and microsoft word was in the cloud and all the stuff office in

Chamath Palihapitiya: the cloud office 360 i guess they call it so what they would do is you'd buy a server and they say

SPEAKER_00: yeah you can have a hundred people a hundred lawyers can edit documents on it and store their documents on it and it's fifty thousand dollars for that so you say okay we had a hundred attorneys on there fifty thousand dollars and it lasts for five years and the server costs fifty thousand dollars so it's a hundred thousand all in between the hardware and the software it's a thousand dollars per attorney it's two hundred dollars per year and you would just take out a calculator and you do the math then they'd say yeah you know and if you put a bigger hard drive in and you double the memory it's going to cost you an extra 20 grand but you can put another 30 you know attorneys on so you kind of do that math and then they you know some places were like you just always have twice the capacity so if one goes down it's redundant then you had um a revolution that occurred from uh mark benioff where he said hey it's all going to be in the cloud we're going to pay you just based on the number of seats and there was another business uh innovation which was instead

SPEAKER_37: of locking you in for two years pay as you go pricing so why would you i guess is your original question why would you do this kind of stuff well if you're coming in and there's incumbents

SPEAKER_29: and you want to f with them and you want to disrupt them it's a really good way to do it so when you see i don't know wireless plans come up and you know verizon you know expensive at tnt super expensive and then somebody's like yeah you know we're not going to try to get you for 90 dollars we're going to give you a family plan for 90 with five phone numbers you're all on the same data plan you pay as you go whatever and you know it's 20 bucks a person but your coverage isn't

SPEAKER_00: great so there's a little business model innovation there that's all it is business model mission probably the best one that we've talked about here would be the epic pass you used to go skiing you could get a season pass at one resort so if you owned a home and you were you know going to deer valley you'd buy a season pass from deer valley vale resort said buy the epic pass and we'll just start buying up mountains anywhere and you could buy the local one for five mountains in utah the local one in tahoe for five mountains or you could buy the international one uh and uh all you can eat all you can do pricing and all you can eat is the idea of a business model what did that do the mountains were filled up yeah then people spent more money on uh food on the mountain they spent more

SPEAKER_37: money on lodging at the mountain they spent money more money on rentals and it got more people into it because the big blocker in skiing was this is really expensive really expensive you know it's 200 300 per day to go skiing in america now now people in europe pay 50 japan pays 50 some places 75 100 a

SPEAKER_29: day so you don't even why would you buy a season pass you go 10 days you pay 500 but if you're paying 300 a day and it's 900 for a season pass or 600 you know it's usually in that range depending on block out dates you can be like hey if i if i do three days i'm in the black i do four days i'm in the black and that's how people do it then they subscribe they don't ski this year but they ski next year they ski the year after they don't ski for two years they just keep their subscription going that's the

SPEAKER_90: business model innovation i i really appreciate that but investors are often looking for a particular

SPEAKER_13: thing when they're you know their conception of the market and how startups should operate so if you're going to cut against the grain either in a technology sense or a business model sense how would you go about conveying to investors that you're not being absolutely insane for example

SPEAKER_72: we're going to cut prices not raise them how do you get across their factor by you going against commissioners you just ignore them yeah vcs are you know if a vc is smart

SPEAKER_00: they are going to look at the entrepreneur and say tell me you're thinking okay yeah that's an interesting idea why do you want to cut the price in half do you think you can make up for it by having five times as many people and uh yeah when they started uber pool or lift line a lot of us were

SPEAKER_37: like is that a good idea because that five dollars a ride six dollars a ride and it was like yeah we're going to try it the cities love it and it didn't work it's worth trying right all right founders i

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SPEAKER_00: that's v-a-n-t-a dot com slash twist uh or uber bus right and then now they have this uh these routes in manhattan where every 15 minutes an uber bus goes by and it's five bucks you get on and off and you give up the last you give up door to door which you gain uh 50 discount and then everybody in new york city is talking about uber shuttle i haven't taken this yet but i'm going to do it next time in there just as you know for a little product market research the jfk shuttle which is being advertised all over the subway system in new york is i think 15 to go to jfk i'm looking at the page

Chamath Palihapitiya: right now i don't think it has a listed price that i can see yes j s gemini or claude or grok or chat gpt i think it's 15 or you know our team should be uh checking that while we're here so lon or sergey or chris or oliver just feel free to dump the answer into a statement for us i think it was 15 i saw it

SPEAKER_00: might be 20. it was in other words like if uh an uber x would be 75 dollars an uber block would be 150

SPEAKER_04: that's basically 25 one way oh 25 bucks though yeah so it's half price a third of the price yeah i take that night day whatever that's fantastic also i gotta say when uber pool came out and lift line came out if you were in your 20s in san francisco that was lifeblood that was the best

SPEAKER_26: thing in the world we were all broke we loved it rip lift line uber pool i miss you a lot i think you

SPEAKER_00: know with the cyber cab coming the two seat what they're reporting might cost 15 20 25k you know

SPEAKER_29: eventually maybe 25k to start 15 at scale and i think they're gonna scale it you know that might be the kind of thing where it could go down to 10 bucks a ride or whatever seven bucks a ride again because those cars are so cheap uh to produce and they'll be utilized 20 30 times a day uh so yeah you you can ignore your investors or potential investors advice um i think you explain it to them and if they don't get it they don't get it you know it's it's just the nature of it if people don't get it you know some a great investor wants to hear your thinking have a great debate with you about it and

SPEAKER_00: then let you cook you know and so if steve kerr's like i'm gonna take 12 threes a game because they and you know i'm gonna let steph curry do that you know if you're the owner of the club you're like okay yeah you got a season let's see yeah maybe two seasons you're looking for a little innovation you know and that's why the three-pointer revolutionized the game and then that's why everybody's trying to get you know all five people to be able to shoot threes at a decent level and then that's why the volume of threes went up so business model innovation you can see something like that in the nba there's an innovation in nba and if you do that you have a really good chance to disrupt uh you know people who are incumbents so the reason really to do it is to f with incumbents and delight customers one of those two reasons um people thought it was crazy to even consider like spotify like why would the music industry ever want to support something like spotify when

SPEAKER_37: it was 99 cents a track and 99 cents a track was a steve jobs innovation that they were like why would we ever do 99 cents a track we want to force people to buy the album for 15 bucks to get the 12 tracks for a buck 30 each why would we ever do 99 cents right we're just gonna snipe the best one so there's three different business innovations the cd going to yeah the cd going to spotify and then spotify going

SPEAKER_29: to all you can eat or cds going to 99 cents on app itunes and then to eventually uh you know being all you can eat and then they're also on youtube so when i was in singapore i was shocked that the cars you're allowed to in the dashboard led play video yeah i i mean you you i think that's illegal in all the united states yes and a hundred percent of them had youtube playlists they were playing and so

SPEAKER_00: you're sitting there in the back seat watching a music video from youtube and i'm like yeah i was

SPEAKER_20: always wondering why these videos have a billion views it's because every cab in singapore is playing

SPEAKER_121: a youtube playlist number of videos in singapore googling that six million people i guess there's

SPEAKER_123: like one percent of the people so sixty thousand there were a fifteen fourteen thousand taxis and

SPEAKER_04: forty six thousand other i'm kind of chauffeurs in singapore back in you put those together that's

SPEAKER_125: one percentage sixty thousand i nailed it once again notes folks all right let's take a big pivot

SPEAKER_13: here and talk a little bit about the navy so the story is that in the navy uh do you want to keep

SPEAKER_128: singing no okay every time you say navy i think of the i think of the um village people ah when i think

SPEAKER_133: of the navy i think of my childhood dreams of being a navy fighter pilot that were foiled once by being too tall and far too blind got it ah rest in peace alex's navy dreams anyways so the navy's cto justin

SPEAKER_13: finale is working hard to make it easier for startups to sell into the navy and this is a couple of things at once jason so first of all they're trying to kill off the valley of death which is the time between when the navy orders something from you and when you actually get paid for it if it's too long startups can't float essentially paying for someone else's product for too long so that's very important and also they're trying to get the overall time from kind of selling to the navy to getting something approved down quite a lot so one startup via um went from request from proposal to deployment in under six months which i believe in government terms is light speed yeah and you know we have a lot of defense companies on the swiss 500 vatin systems castellian overland ai there's a lot of names on there but i'm curious what can startups bring to the navy in particular or the military as a whole

SPEAKER_26: that existing defense contractors can't so where should startups be focused today if they want to

SPEAKER_59: sell into the dod okay that's a big question so there's a business model and a payment uh to to

SPEAKER_00: segway from the last story the existing model is cost plus so we get a contract with you and we just make a percentage on top of it i hate that business model i'll tell you why in a second the other model is i make something i'm a technologist i make it better make it faster and i make it cheaper and you buy it and that allows me to make it better faster and cheaper and then you buy more of it and we just keep going when you do cost plus that never happens because your incentive is to make it cost more so the plus on top of it the percentage on top of it goes up as well because you want to increase

SPEAKER_37: your profits and your revenue right everything's got to go up and to the right yes there's two ways

SPEAKER_00: for it to go up and to the right charge more or sell more so there's the tension and what startups

SPEAKER_03: are great at doing bigger faster cheaper and you know smarter falls in there right what's smarter better smarter faster cheaper smarter better uh faster you know these are all the sort of variables that typically a technology product can beat an incumbent on and so if you look at the category

SPEAKER_00: of products that are getting chosen they tend to be in the drone category the new faster cheaper

SPEAKER_03: um components or products that use off-the-shelf components so what happened with battery technology sensor technology over the years is people in ukraine can build really effective you know offensive and defensive measures and they can do it with commodity commodity um quadcopter aka drone parts even though

SPEAKER_00: they're not fixed-wing drones they're quadcopters they get called drones as well so this is an

SPEAKER_37: admission from the navy that uh what do they call them the primes yeah defense defense contracting

SPEAKER_29: primes yeah yeah so the primes um are slow and expensive they want to go fast and they want to go cheap and they want better and that's the bet that america needs to make because our adversaries are now doing it uh this entire offensive uh action by iran uh by the israelis in iran that happened whatever number of days ago now five days ago six days ago when that happened it was or

SPEAKER_03: it's thursday night i think yeah so when that happened and we started hearing about it on wednesday and i remember i did that quite weird tweet are we really doing this when they empty the embassies it's like yeah it's happening we're not doing it but the israelis are they um they had boots on

SPEAKER_00: the ground inside of iran and they weren't sending f-16s in or any kind of complex stuff well i mean

SPEAKER_03: maybe it was complex but they were doing drones and small arms that they had snuck into uh iran over and turan i think they snuck it in over a year and a half two years

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SPEAKER_00: military base deep into russian territory was a similar thing they had been you know hiding stuff for six months there so uh that is the adversary or that's the theater that's how the theater will emerge and that's really plays into the strengths of nimble startups yeah people in ukraine are building these things in the field so if they're building in the field what can you build in a factory you know and the payment cycle is a really great innovation by the u.s navy so shout out to the cto justin on really understanding that startups have typically 18

SPEAKER_29: months in revenue a funded one 18 months in runway a funded one and if you're gonna you know if these things take four or five six years um yeah the startup's out of business so i love the idea of we're gonna pay as we go we're gonna buy 10 million dollars worth of stuff we're gonna do 20 on signing 20 when you hit these milestones and so on and so forth and um a lot of i think vcs now are like

SPEAKER_157: maybe we'll just build stuff and then show it to the military and then say how many do you want

SPEAKER_40: right and that's like an even better model if if vcs can just say hey we're gonna make this stuff

SPEAKER_29: this stuff whether you need it or the israelis need it you know or brazilians need it i don't know what the rules are for startups that would be a really good question so we should have a defense investor on and talk to them a little bit about that i don't know what the rules are for who you can sell to but i like the iron man tony stark stark industry style just we're gonna make bombs and

SPEAKER_90: if you want them tell us how many well we have a lot of allies around the world i mean five eyes you

SPEAKER_13: know australia uk us as a collective nato i mean we have a lot of friends and i think if you're building for the u.s our allies tend to have access to things i mean the f-35 is not a single nation project right yeah um we do have a question though from uh vaish over on ig because we're live on instagram everybody there you go he wants to know jason what are your views on agentic ai applications inside of defense and the first thought that i had jason was well

SPEAKER_27: palinger is doing fine but i'm curious what you think yeah agentic inside the military i'm

SPEAKER_60: i'm assuming you mean uh like on the battlefield and that is there are some united nation laws against robotic unmanned um guns weapons robots and i know that we have some agreements to not have those

SPEAKER_00: but to have them for you know robots that are monitored controlled by humans taking a human out of a loop in a drone means the drone can make a mistake and land on a hospital like really bad i don't think

SPEAKER_60: any of us want to live in a world where you have optimist figure style humanoid robots or the dog one with a gun mounted on it we showed that we've seen that on the show yeah we had the chinese one with the with um and the chinese had uh taken one of those robot dogs and just mounted an ak-47 type

SPEAKER_00: assault rifle on it you know if that thing was just like shoot people in a uniform that is an american

SPEAKER_37: uniform well you know that's not perfect uh and it's going to make mistakes the one i did see that

SPEAKER_29: was really interesting i saw a gun i should have put it on the docket um one of the producers will find it but it was a gun that will only fire when it has a drone like a quadcopter uh-huh and it's a hundred

SPEAKER_37: percent sure that you're going to hit it in other words your aim is perfect so imagine a rifle and

SPEAKER_00: you put it up and it's got computer vision and when you have it squarely in when you have the quadcopter squarely in the crosshairs it vibrates or it says okay to shoot or it just gives you the green light and you start firing but if it's not in the crosshairs there's no green light so you can't fire and i was like well that's interesting why don't they just make it so if you hold it up you just move it around and it says up down left right a little more right a little more left and it just makes a like a sound yeah like you know uh one of those metal detector sounds increasingly higher pitch as you get closer to it and then when it's in the crosshairs it just fires itself i think the reason they don't have fire yourself is because of these agreements with the united nations there's definitely a

SPEAKER_172: continuum there from like you hold it it tells you when you're in the zone you hold it and it

SPEAKER_04: shoots when it's in the zone to it tells you where to put it in the zone and at some point jason i really do think you're just having a gun on an arm but this is the brave new world that we're going

SPEAKER_13: in this is not just drones by the way everyone don't forget that and systems one of my favorite

SPEAKER_26: companies is building underwater drones we also have drones that sit on top of the water so warfare definitely is changing one more question about the primes though jason when i think about electric boat and raytheon and these major companies that startups are taking on i'm thinking about like literally building submarines it seems like the shift in warfare has created a really great opportunity for smaller cheaper faster weapon systems like drones that we're talking about so it

SPEAKER_176: it does seem like the the war is war fighting is moving towards the startup domain and away from

SPEAKER_59: mega systems like aircraft carriers am i right there well obviously yeah i mean everybody understands

SPEAKER_60: it's going to be smaller things uh yeah 100 percent and these hypersonics i i don't know oh look they found the smart shooter here it is uh all right i have the video i'm pulling it up for us

SPEAKER_27: so we can see this in just a second there yeah so if this is the one i think it is um i think this is

SPEAKER_00: like has the ability to if it's in the crosshairs actually fire uh there it is folks this is so crazy 95 hit rate um this ai weapon turns any rifle into a drone killer smash 3000 in action so he's looking

SPEAKER_27: through the site oh and uh bingo yeah it just tells you okay to shoot and kill and uh you take your shot so you're not wasting anything yeah that's pretty neat that's pretty neat stuff right there

SPEAKER_133: that's pretty neat also use you in friendly fire like if you should have gone up in the air the bullet

SPEAKER_125: comes down yeah that you know too yeah that's probably why they're doing the test over the ocean

SPEAKER_13: they're doing that camp pendleton yeah i don't think the uh the fish are gonna mind uh uh too much all right jason alon had a question for you on this which is if you were a defense tech founder today what would you be doing to ensure that you're locking up some of this pentagon money that's up for grabs more marketing more pitching or just as you said earlier build it and they will come

SPEAKER_27: yeah it's not as simple as build it it will come it's hire people who've been in the defense industry number one to work at your company who know how to navigate it to hire lobbyists who know

SPEAKER_00: how to navigate it and three have vcs who have invested in the space um i think all three of those which is to activate your network are the best advice it's really the similar thing you know if you were building a consumer or marketplace app or a software app and you talk to me and you're like hey i'm you know i'm wondering what google or microsoft or apple this person might be a part a partner or what we could learn from them or you know whatever maybe an acquisition yeah i can make the introduction

SPEAKER_03: there are people who we spent 20 years at the defense department who are now running venture firms

SPEAKER_00: or work with venture firms so this is what investors provide money advice network money advice network man money advice network i'm not saying it just because it spells out man but man that's what

SPEAKER_77: they provide can cash advice network can so that that is the nature of i think what you would be

SPEAKER_26: looking for good question all right so let's move on and talk about some big news that's actually relating to how startups build and go against incumbents jason we rapped about the meta and scale

SPEAKER_13: deal as everyone heard it's a minority transaction meta's buying 49 of scale and taking their ceo the last remaining co-founder the interesting kind of second order effect of that deal is that a lot of customers of scale are now looking elsewhere essentially they don't want to go be a scale customer because they're google or another competitor with meta reuters had a great story up about this

SPEAKER_59: and maybe a good idea to explain what scale does since most people don't know about ai training and

SPEAKER_04: and how deep this is going now yeah i was gonna yeah no worries uh so scale does a number of things it

SPEAKER_13: was most famous for data labeling helping companies get their data in an ai friendly shape it also does lln evaluations i believe they do r l hf which is reinforcement learning with humans in the loop

SPEAKER_00: yes and this is all examples of this might be uh remember like the silicon valley hot dog not hot dog

SPEAKER_60: app you know in the early days you would just have humans say what's in the photo they would type five items in the photo another human would type five items in the photo photo and if they got four of the same things and they said this is an orange you know and it's a it's a man eating an orange on a beach and there's a seal you know they would say okay great two out of two people are great we'll put

SPEAKER_00: those tags and it was called tagging back in the day you put tags on humans tag stuff on flicker and then people would use that flicker data or instagram data from those tags to train ai and do machine learning but there were also companies doing it then it became tagging was kind of easy so then with large language models what they started doing would be you asked a question about finance hey explain to me the rule of 72 sure they would look at it and you know when you're asked to give a thumbs up or a thumbs down that's you giving some feedback that would go to with a thumbs down or people complaining about it an expert in finance and over time it went from literally somebody who could

SPEAKER_03: tell you what was in a photo which is like any human being who can use the english language and even poorly they don't really need to even be able to put full sentences together to being somebody

SPEAKER_00: who's a finance person who says that description is technically wrong because of these little nuance and they rewrite it they would literally go into the answer and change the answer and polish it and they would send that to two finance people and then look for okay is it clean right you do a double blind kind of situation yep that's what scale ai was doing all this time and they were making more and more money from it so now the question is is meta going to just turn that off and just say we're not going to provide that to other people we're just going to use it for our own needs and that would make sense for them to do it but it would also be super anti-competitive and i'm sure this i don't know what's going on with m a we talked about it i think last week on friday maybe even and you know as i said i just look at the game on the field everything's all these things are happening so maybe they're just going to get a pass but that would be a thing

SPEAKER_06: to look at did zuckerberg buy this to kill it well i don't think we even have to assign motive here

SPEAKER_13: jason because it appears that it's going to die on its own for example reuters reports that google did 150 million dollars of business with scale last year they were going to do 200 million this year that's going to go to zero and a number of startups are reporting an influx of demand for their services which were competing with scale before because people don't just want to give meta essentially their data to show them what they're training so a company called label box told reuters that they're going to quote probably generate hundreds of millions of dollars of new revenue this year from customers leaving scale turing and handshake also said the same thing um i pulled the list by the way of companies that are in the data labeling space it's in the twist 500 newsletter today we're going to put a couple of these on the list but my question for you is if you're a founder and the incumbent whoever it is in your space stumbles or becomes less marketable or just less attractive

SPEAKER_55: what's the best way to go out there and ensure that you're going to absorb that demand that's not going to peel off from there i'm thinking like discounts or promotions how would you go about i

SPEAKER_27: would hire previous sales people uh who work there or previous employees to be consultants and tell them

SPEAKER_60: not to put their names on your linkedin page so if i was another labeling company and five people had left scale ai in the last year i'd say don't give us your database but we'd like you to come be a

SPEAKER_00: consultant and tell us hey what would be great help us do business development right and so if somebody leaves a company as long as they don't take the database with them if they've got 10 relationships and

SPEAKER_37: their kids go to school together and they made a friendship with the person at google who spends this money and has this contract and they go to the warriors games together and yeah you know uh they've

SPEAKER_29: had dinner at miller and lux a couple times and had the you know the tomahawk great fine they they might be able to win that client so that would be how i would do it right off the top of my head um but you know you you gotta be you're gonna have to rise and fall with the quality of your own company you could put up a web page actually now that i think about it that uh says uh you know uh offering free consultations off-boarding consultation and assessment and audit for people getting off of scale ai um or

SPEAKER_37: scale ai alternatives so when you type in like slack alternatives or salesforce or hubspot alternatives

SPEAKER_194: you get all the other sas products and sometimes the sas products will put on their own web page salesforce versus sales hub competitor or whatever and it's the sales hub you know web page but they're doing a comparison of their two astoundingly even though they did it completely objectively did you know that sales hub actually turns out to be a better product wow shocking i'm

SPEAKER_197: going away unbelievable that they would find themselves to be the market leader it just was you

SPEAKER_123: know just it's objectively the truth so they they decided to highlight it on their page and buy ads

SPEAKER_00: around it to send more traffic to it to drive the seo so yeah i would probably do that as well um and then maybe writing some blog posts and maybe doing some press hits on podcasts etc where you explain the space you explain the deal so making yourself available to journalists and podcasts podcasting is kind of the new journalism now or like the new place people look for information so i would just go hey who's talking about this hey we can provide a subject matter expert would you like the ceo of

SPEAKER_29: this company and this data labeling company to come on your bot boom well i mean when these three startups

SPEAKER_04: turing label box and handshake were in the reuter story they're the first place i went now admittedly i did go find another five but i mean that's a great way to get your name out there build seo but my question is is what's the ethical line we talked a lot about the deal if you don't steal the database

SPEAKER_60: okay yeah you don't steal the database you'd never have anybody break their ndas you know i've been in meetings where people have offered me information and i just stop them i'm gonna stop you right there

SPEAKER_00: don't tell me anything that your previous employer would be upset at you telling me don't tell me we have an investment in uber please don't tell me if you're doing something competitive with uber or disruptive to uber because like i had tons of people want to pitch me uber competitors

SPEAKER_29: or adjacencies i said whatever idea you have for an on-demand company they had it six months ago and they decided to move it down on their runway after getting to the 9 000 10 000 11 000 city which is more important than your idea to do you know uber for dry cleaning i mean i need uber for dry cleaning

SPEAKER_37: right now i'm wearing polo shirts i've been on the road for three weeks i need it twice a year i don't

SPEAKER_31: need it you know every day of my life like i do uber eats and and uber rides so i i do miss that era

SPEAKER_26: though that that era of consumer was so much fun if you were in san francisco like my across the

SPEAKER_13: hallway neighbor in my apartment building tried out every single possible uber for dry cleaning

SPEAKER_04: an uber for laundry because they all had amazing early discounts and he just cycled through them and he got essentially free service for like six months i hope they didn't destroy his laundry

SPEAKER_77: my favorite was luxe valet uh and i would pay for this again uh luxe valet would have a valet

SPEAKER_00: meet you at any location in san francisco and they were wearing a blue jacket and they would take my tesla and go park it in a parking lot for me and they would abstract whatever parking lot they were putting it in because they had rented a certain amount of capacity in parking lots at a discount so they would get 10 spots or 20 spots in this lot they pick up my car they bring it there then for an extra 10 bucks oh no for the same price they would then come and be waiting for me outside the battery or wherever and it could be different ends of the city so i could go to my office with my car then walk to the battery have you drink with somebody then have them bring the car over to the battery and i'm like for the same price it was like 30 or 40 and my parking was 20 dollars so or it was 25 and then i would give a five or ten buck tip so it's like it was a wash but i got the

SPEAKER_60: person to bring me the car and they were basically losing 30 dollars or ride yeah that's why i'm

SPEAKER_26: looking at this headline that i just pulled up because i was curious what happened to luxe and

SPEAKER_13: jason from 2017 valet parking start of luxe latest casualty if on demand bust and there was another startup called zerx that was doing kind of a similar idea and it pivoted to the enterprise which is a polite way of saying that our consumer business lost too much money yeah yeah and self-driving was

SPEAKER_03: coming and cars parking themselves is an inevitability and uh you know ride sharing is

SPEAKER_06: ubiquitous so can i can actually ask you a question about this because much hay has been made over the

SPEAKER_13: years about ubers essentially taking a loss on certain rides to drive demand subsidizing drivers subsidizing riders etc building a marketplace when does intelligent subsidy go from marketing effort to oh my gosh you're just torching capital like how do you as a founder does the customer

SPEAKER_113: come back a second or third time or are they just there for the free pizza so in the world of two

SPEAKER_00: for one my dad would never i was like dad you know i see all these places doing two for one entrees and we're not busy at 5 30 we get really busy at 6 30 7 30 he's like yeah those people will come in

SPEAKER_27: they will eat three loaves of bread put two loaves of bread in their pockets still the silverware and they'll complain and they'll send their food back and uh there's their uh coupon there was a term for

SPEAKER_37: them that was derogatory but like coupon a-holes basically sweepstakes jerks kind of thing uh those two for

SPEAKER_29: one errs is what kind of groupon eventually became and i recognized that with groupon because there were all these stories that groupon killed my business people who had small businesses that were destined to

SPEAKER_157: then be like i need to get more customers i'm scared it's my whole life is riding on this yoga studio

SPEAKER_91: this cafe so they would do something where they lose money to your point hey buy a cup of coffee get a cup of coffee free buy a croissant get a cup of coffee or whatever it was they would construct the

SPEAKER_29: deal that they would lose money and then they would sell a hundred of them so now they'd be losing two dollars times a hundred they would you know lose two hundred dollars when they were trying to make

SPEAKER_37: two hundred dollars to make their rent and it would be a debt spiral yes if the customer yeah

SPEAKER_00: so the what you're looking at is cohort analysis are these customers going to stick around what's their lifetime value in the cohort so you have to make sure on the tuesday when you said we have yoga and you can come to this class for five dollars instead of 20 you track that cohort do any of them come back and is there any damage to the studio and do they write bad reviews on yelp or do they help and it turned out they would like write bad reviews so you get these cheap people who'd write bad reviews

SPEAKER_27: you'll be like working against your business that's how you do it cohort analysis great question no i

SPEAKER_04: really appreciate that i think the phrase was extreme couponing uh according to what i what i can find sure frugality is good but you don't want to attract customers that are going to give you the lowest margins and the most complaints so i i i went through that on the avoiding the two for one

SPEAKER_27: people because my god you know some places have ways of managing this so if you gave unlimited iced tea

SPEAKER_00: the cost is contained you know some people might go crazy if you do bottomless mimosas and it's like you know champagne that's sparkling wine that's going to make you go blind it's really cheap and you buy it in like you know a two gallon bucket or something okay fine you know so there are times you can i think work around it but the problem is people in the industry during that time period and perhaps now with ai you know if you're losing money on every search and you're providing massive amounts of

SPEAKER_37: compute well maybe those people would not actually use the product long term and they're not your ideal customer so then the data coming in is sending you in the wrong direction so we're all doing

SPEAKER_29: these queries on a 200 what should be a 200 a month subscription for an elite multi-threaded incredible

SPEAKER_00: ai product that should cost 2500 a year and uh we start using it and they burn two thousand dollars a year for you and i using it and then we never convert to paid and all the data they got from us

SPEAKER_20: was searches that are from people who are not their customers so now you spend all this time thinking about somebody and trying to teach them yoga and they paid five dollars and they don't want to do yoga they're just there because i got a deal so that's the other thing is i think the data problem

SPEAKER_00: and that's why cohort analysis is so critical so many people just get customers and they don't think how did i source that customer we actually know where all of the people who come to founder university came from and we asked them in a survey and we asked them on the call when we do an introductory call with the founder how did you find out about our firm they say oh i listened to all in oh i listened to this week in startups oh do you listen to both yes i'm gonna this week in startups listen who started listening to all in i'm an all-in listener who then went to this week starts i started jason speaking at a conference i read his book figuring i saw him on cnbc and what that did over time was gave me the confidence to say you know who the best leads come from this podcast the more i talk about startups and startup issues here the more people find it the more they apply or when somebody does want an angel investor to come to a program they say yeah you should talk to jason he that's what he does

Chamath Palihapitiya: so you have to study where your customers are coming from also it's good to look at cohorts over

SPEAKER_04: time jason you talking about this made me think of this chart from the chime s1 filing and what this shows is new cohorts of customers based on i think it's year and then quarters since first active and what they're trying to show here if you're listening to the audio version is essentially that their newer cohorts are having greater product attachments so they're using more of chime's products over time but this is another way to take a look at cohorts and um how profitable they might be because jason if

SPEAKER_13: they're having a higher attach rate you can spend more i presume on customer acquisition because each customer's ltv long-term value lifetime value is going up yeah this chart is great if you just take a

SPEAKER_60: moment and look at it the x and y axes are the number x is the one that goes up and y is the one that goes

SPEAKER_14: across um x goes horizontal y goes vertical okay so the y is the number of products used each month

SPEAKER_00: one two three or four and then the quarter since first active goes from zero four eight 12 16 20 24 28 32 36 so up to 36 quarters which is nine years it's a lot of years you know and what you see is the oldest folks from q1 of 2016 is the white line and it took them years to get to two but they started at two products or so took them years to get to three like literally took them 16 quarters four years to get to three on average but then you look at the people who have been using it for zero one or two or three four quarters even four quarters which is a year they're getting out of the gate to three products they're using three products in year one and then now you're starting to see people get to

SPEAKER_37: four products in year two what this means is they're not unsubscribing they're not going to churn and their efficiency in explaining their product and getting people to try the product and get value

SPEAKER_157: from it is going up what that means is the quality of the revenue here and the quality of the startup

SPEAKER_00: and the management team is extremely high for chime unless there's some gamesmanship going on here and so always look out for that remember there was a bank i don't want to say which one because i can't remember but banks were signing people up for four accounts and they only knew about one or two and then all

SPEAKER_157: those banking legislation came out and they were like yeah the people signed me up for a money market a checking i didn't sign up for that i just wanted a savings account or they put me in these other things and then i started getting these fees for it that's an example of an incentive there was an incentive for people to try to get people onto more products and they use dark patterns or just straight up lying cheating stealing i'm just gonna say i'm gonna put them into two because they said they wanted to open an account i was like oh yeah business savings money market and they said yeah i want a savings and there was like okay they said yeah first so that means all three like literally that was people's explanation of it now they were getting a 25 spiff or something for each one they did so show me an incentive i show you an outcome people cheating so you have to as an investor when i see that number or a public market investor i would be like okay how often are they using those products how much value are they getting from them which would be a little double click but this is a great trend line and that trend line um most startups are not capable of doing that kind

SPEAKER_00: of analytics or most startups don't do that kind of analytics until they get later in their life because number one they don't have that much data okay number two they don't have a ton of resources as tools come out to do this kind of analysis cohort analysis and and all kinds of metrics and they become easier to use and you have chat gpt and grog and gemini to teach you about it and an accelerator like ours teaches it people get better at it in fact we have a module uh at founder university teaching people about cohort analysis even though we know they're not going to use it because they're not even incorporated yet we just want them to know cohort analysis exists lifetime value exists you want to start doing it right from day one and right from day one means in your database

SPEAKER_37: when did they sign up what was the source did they come from a facebook ad or a tick tock ad that could matter maybe the facebook people stick around and tick tock don't tick tocks are transient i have

SPEAKER_00: a friend i think i mentioned it on a previous one he has an ai app and let's just say certain demographics ages genders race cities phone types android versus ios newer ios phones versus older android phones show radically different amounts of cancellations and complaints requests for refunds bad reviews

SPEAKER_157: and also people who buy it and never turn it off and have huge lifetime values so all that granularity needs to be set up day one early in the life of your company no there was something in the news i

SPEAKER_00: wanted to talk about did you see this story trending on twitter uh sorry to put this on the docket earlier that somebody sent a fake email saying he had a term sheet to another investor to try to get them to do a term sheet a competing term sheet and they sent them a fake email that they already had a term sheet and then somebody was like this is securities fraud and i retweeted and i said you know i've told people this over and over again if you lie while you're selling shares you could actually

SPEAKER_37: have this happen so um think about that for a second i understand you want to get a term sheet but if you lie in the process of trying to incent somebody to get a term sheet i think technically that would be securities fraud right and so here it is yeah here's the tweet from from nick carter and just

SPEAKER_13: quoting the tweet here directly faking an email from a vc saying they're sending you a term sheet

SPEAKER_04: while raising is securities fraud misrepresenting material facts in connection with the securities offering and then jason added on top this is an important thing for founders to understand and i brought it up quote countless times lying when selling shares in a company is securities fraud

SPEAKER_13: and jason this is a great example of the fine line between startups being a little aggressive with the truth a little bend a little nudge and breaking the law but anyway here's the original email i guess

SPEAKER_173: this is the original email we could just read the original email hi avi we should have circled back

SPEAKER_04: sooner after our last conversation got caught up in some internal discussions around consumer timing and had a few larger deals that needed immediate attention your round ended up getting pushed etc etc etc and then emily nsf a well-known kind of venturish twitter account says founders would rather

SPEAKER_06: commit securities fraud in public with the worst ai slot email ever instead of just working on finding product market fit but he says i'm attaching a term sheet for your series a the valuation reflects

SPEAKER_71: current market dynamics and we're prepared to lead so i guess the the thing that's got people trying

SPEAKER_27: to figure this out is you would ghost the founder then send the term sheet so it doesn't make any sense

SPEAKER_245: yeah yeah i don't all right well also don't don't do this like don't do what this person is doing

SPEAKER_26: it's not what what does this get you you know it's it doesn't make you look cool it makes you look

SPEAKER_113: like someone you well in obvious replies avi patel's replies here if this is or if any of this is accurate

SPEAKER_66: i'm just putting a huge disclaimer here throwing myself in a palmer lucky like situation

Chamath Palihapitiya: there's a bunch of people commenting looks like it was written by ai they just cold emailed your term sheet out of the blue lp's asking why they didn't invest that's the fake part so maybe it's all put

SPEAKER_251: on maybe but it's it's traced i i no matter what the lesson here is one don't make it look like you're

SPEAKER_07: committing securities fraud oh here we go okay sorry to interrupt no please i'm looking in the replies if

Chamath Palihapitiya: you look at the replies to his original one there is a reply from roy lee remember from the um cheating

SPEAKER_37: startup yes uh clearly uh who we had on the show the uh interview coding software that let you kind of cheat and he's like always talking about cheating he says good mental avi replies chestnut checkers baby and then sean g replies yes fraud is chess so i think it's a bunch of precocious founders doing funny things that they don't realize and trying to get zoomers and boomers to reply which i just did

SPEAKER_08: so i guess it's all put on i but yeah it's not funny okay that's that that's that's the thing here

SPEAKER_26: like jokes are good yeah potentially committing securities fraud but maybe not but also maybe doing it is not funny like i look i love a joke i love a joke in anything except for a highly regulated part of the economy where humor is not allowed like don't joke about workplace safety because people get killed and don't joke about securities fraud unless you want to become the next paul manafort

SPEAKER_137: okay last one last one okay jason a couple of options for you how not to buy another company

SPEAKER_13: how to shut down with grace or quote we almost killed our startup by raising too much money too early

SPEAKER_60: dealer's choice i gotta go with we almost killed our startup by raising too much money because i was talking to somebody today who raised 50 million and a 300 million dollar evaluation and a really interesting discussion with him first time founder million in revenue like really great amazing and i

SPEAKER_27: said you know what if they paid 15 for that 50 million that means they uh if they want 50 million

SPEAKER_60: to turn into 500 which would be a 10x 15 of your company's got to be worth 500 it's 3 billion

SPEAKER_00: or 4 billion you know maybe a little dilution 5 billion and if they really want a 50x or a 20x like now you're talking about 10 or 20 billion you know how hard it is to build a 20 billion company your 10

SPEAKER_157: billion company would require at least a billion dollars in revenue growing at double a year in

SPEAKER_29: order to sustain that valuation like yes you have to a thousand x and still be doubling every year like this is incredibly hard to do it's never really happened except for like gpt and it's snow the list

SPEAKER_13: all right so this is from our dear friends over at r slash startups where we spend a lot of our time looking to see what people are talking about and this is a post that i just i really thought it came from the heart and this person kaleidoscope fast 7871 everyone knows them um it was discussing how jason they started off as a very scrappy company but then things picked up vcs noticed what they were working on they raised a three million dollar seed and then a month later a nine million dollar round i think that goes to show that this is probably a 2020 2021 era story and then the funding he says made them dream big but they got distracted instead of focusing on customer problems they began to think bigger picture get a little broader hire some more people etc etc etc you know where this is going they eventually launched no one cared and then over the next couple of years they got back to their roots and they made things work out but this is a story we've heard ad

SPEAKER_26: nauseam so for founders how to avoid raising too much too fast well if you can get the money and you

SPEAKER_00: take it i don't blame you if it's at a good valuation and it's great investors okay it's reasonable that

SPEAKER_37: you took it what you do once you take it is you have to know do i have product market fit and to what extent if you have strong product market fit that means your product's growing without any marketing

SPEAKER_00: people are calling you on the phone saying god i love this product can i have more and they're emailing you i can't stop using your product would you you know uh can we uh do a deal with you whatever uh can you yeah like amazon prime you know like perfect example i can't get enough of disney plus i can't get enough of netflix can you do another season of this you know uh daredevil sure you put it all together um if this is a company that obviously hadn't even launched yet so if you're pre-launch you should really be focused solely on not the money that's in the bank account just us getting a

SPEAKER_37: small number of customers to do this and to engage with your product and to understand your product and if you're doing three or four different things then you might get moderate success at three or four

SPEAKER_157: different things you know what the biggest blocker to breakout success is alex moderate success correct and i say this to people all the time i've had this happen so many times in my career i do something it gets moderately successful people are like that's really great what they mean is that's really good but they say great because people like to be nice to founders so you're getting all this input from the world nine three million dollars ten days later nine million dollars

SPEAKER_40: everybody loves you you get a tech crunch story you got a tweet you know you put out a fake

SPEAKER_280: you put out a vague term sheet with an ai written email and you get you know a bunch of don't do that you get a bunch of followers like all this stuff is happening yeah what's not

SPEAKER_157: happening is product market fit understanding your customers and what's great about this is the person's uh reflecting on it and learning so this is my favorite type of founder to invest in somebody who you know figured it out had middling success moderate success and then they figure it out and

SPEAKER_37: have big success you know reportive roles first company was like you know it's like a cool tool that people loved and got bought by linkedin all that's like super successful but then lo and behold

SPEAKER_29: reportive people are addicted to that true product market fit with a certain group of people here we go red swoosh interesting company third sold for 30 million dollars by a little founder named travis

SPEAKER_37: then he did uber you know generationally defining company zip to a publishing cms platform for the new york times and other publishers and then tesla plus spacex boom so you know you start looking at

SPEAKER_27: second time founders third time founders who've been through this so great if you're one of those jason at calacanis.com tell me about your next idea come to the accelerator love to uh meet you so one

SPEAKER_04: last thing and then we're going to close up for the day but in a follow-up response from the same founder he said that there's he says essentially raising too much money doesn't correlate with success but he

SPEAKER_13: also says what i noticed is that second time founders when offered five million seven million

SPEAKER_137: as their first round take two or three million this tells you a lot so is he correct that second time

SPEAKER_194: founders tend to take on a little bit less capital early second time founders will self-fund the

SPEAKER_00: prototype they'll work for six months or they'll just raise from their friends and family like pass the hat 50k 10 people and they'll just quietly and not announce it everybody knows the risks they're taking they raise 500 at three four five six seven million dollar valuation then they go out for the seed when they have the product the first hundred customers first thousand customers for a consumer

SPEAKER_71: product they have some data they show it to them they have a product they can play with why it just makes more sense it just makes more sense to go out at that time yeah yeah well everybody this

SPEAKER_26: has been another episode of this week in startups we're back on wednesday we are back on friday we are always coming to you with the latest and greatest from the world of startups we are here for founders he's jason i'm alex this is twist we'll see you then bye bye