SPEAKER_00: hey everybody it's friday and i'm doing a solo news show today i'm on the road i am actually in texas and i just got to watch the starship launch on 420 so i talk a little bit about that and then

SPEAKER_01: we'll get into buzzfeed shutting down buzzfeed news cutting 15 of its employees as well as fox settling their dominion voting system libel case for 787 million dollars and i'm going to take a

SPEAKER_00: little victory lap here remember i had said that reddit and core should start charging for their data sets well reddit ceo has come out and saying and has said they're going to start charging ai models to use their data to train it finally we'll talk about tiger global marking its huge 12.7

SPEAKER_01: billion dollar fund down another 20 percent and perhaps a little um hand wringing and pain and suffering in the late stage of venture capital and what that means for founders also i'm going to answer some of your questions i think i have three or four great questions from the audience today i'm going to answer at the end it's going to be a great episode stick with us

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SPEAKER_01: welcome to the show everybody i'm in texas i was here for the starship launch at starbase and it was an

SPEAKER_09: incredible day i would say one of the most intense amazing things i've ever experienced in my life a true privilege uh to witness history and this rocket ship that spacex launched is called starship and i'll just give you a quick overview of it you can see it there taking off um and then this happened on thursday it was originally supposed to happen on monday uh and there were some challenges and that got scrubbed and they launched today thursday when i'm taping this brief history if you don't know

SPEAKER_01: um the falcon um series of rockets is what spacex is most known for and they have had 221 mission successes with that rocket i believe it's the most successful rocket in history

SPEAKER_09: and that's what you see them putting up satellites all the time uh and landing those uh reusable rockets

SPEAKER_01: on platforms and they've had a they had a two failures one partial and uh one total loss in the history of that program so a tremendous incredible record uh for the falcon for spacex 224 launches and for the first time in history the ability to actually land these rockets and then reuse them so according to spacex's website 224 of those falcons went off 186 of them landed and 158 uh reflights and this is the key to what spacex is doing if the rockets become uh reusable then you can lower the cost of getting to space economics drives a lot of things in the world and getting to space uh faster and cheaper with reusable rockets is a critical piece of this but starship is a really different beast is the most powerful rocket that's uh ever been developed by humanity and it uh consists of two main parts you got the starship and then you got the super heavy booster starship is that really uh science fiction looking uh rocket on the top of the booster it's about 400 feet high and it's huge you can put 150 000 metric tons uh into into space and that's the equivalent of 330 000 pounds tesla model y that's about 4600 pounds it can carry 250 metric tons uh and just the bbc made this chart just to give you a scale from the space shuttle to the falcon heavy

SPEAKER_09: the really souped up version of the falcon rocket uh all the way to the saturn 5 uh and then the starship it is truly amazing and i got to witness this firsthand i was in the control center and it was an epic moment to see the the rocket launch uh of course the press was a little negative on it uh you can see some headlines here spacex uh starship rocket explodes shortly after launch

SPEAKER_01: some pretty cynical takes in the mainstream media but the truth is these you know this is the largest rocket ever made and success was defined really by just accomplishing two things one and spacex was pretty clear about this elon was pretty clear about it hey can they get this thing off the launch pad and when you see this thing in person it is unbelievable the scale of it but could they clear

SPEAKER_09: that launch pad and that is um that they cleared very easily and uh the the flight went on for i think over four minutes and then they did a uh planned uh you know if if the rocket doesn't uh reach its next

SPEAKER_01: stage when it separates then they have this plan to blow it up essentially and that's what they did the other goal is to survive what's called max q this is like uh the stress test of the rocket can handle all that thrust this thing has a lot of the uh engines at the bottom of it thrusting it into the air this is a completely new platform nothing's ever been made like this so this would be if you were in the space industry a huge success now if you're watching headlines on the news it might seem like a

SPEAKER_09: complete failure but typically when a new rocket is developed three four five six seven rockets uh it takes to get these things stable and into orbit and so this is the start of what will be a humanity

SPEAKER_01: changing platform and it really is a platform for putting large amounts of cargo into space and then

SPEAKER_00: elon's obviously stated mission is to get to mars so what we witnessed today shows i think a couple

SPEAKER_01: lessons for founders who listen to this podcast rapid iteration and incremental progress right this has been almost two decades in the making oh we're in the second decade of spacex and they just have been incrementally making these uh systems more powerful more reliable

SPEAKER_09: and bigger and with bigger payloads and that's what you really want to take away from this and they will stack and rack another one of these very shortly is my understanding i'm not going to speak at a turn here i'm not giving any inside information that you can't get on uh twitter and social media or from elon's twitter handle himself if you follow him uh but this is the start of something very big and you're going to see some more of these rockets go off and it's super exciting so more to come but i can tell you just from a very personal place congratulations to spacex team i got to talk to a lot of them today and this week and uh some of them watch the pods uh which is quite nice

SPEAKER_01: and they are real heroes for humanity the amount of effort and suffering and sacrifice it takes to have this level of innovation is truly impressive to me and so congratulations to all my friends at

SPEAKER_00: spacex okay listen everybody in the early days of your startup you need to be focused on your product your customers even your team and building that out but you can't forget about getting your accounting dialed in as an early stage investor i've seen so many accounting horror stories people doing cash-based accounting instead of accrual maybe they forgot to do their tax returns maybe they paid uh employees or they paid contractors without having a proper payroll system in place and they didn't withhold the right taxes i can go on for hours about accounting nightmares but when you're a founder you got to balance two things you got to have a proper accounting system and uh you're going to need to run your startup at the same time and you can't hire a cfl we all know those come when you hit maybe 10 or 20 million in revenue so i want you to take a look at pilot they've seen all these problems hundreds and hundreds of times and they will handle your books for you from the start when

SPEAKER_01: you get big enough of course you hire a cfo you bring in your own accountants you do it in-house whatever you want to do pilot understands that they want to help you right now they want to dial

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SPEAKER_01: the first six months at pilot.com twist that's pilot p-i-l-o-t.com twist for 20 off your first six months speaking of the media i told you we would see a series of media layoffs after the tech ones and today was a major one buzzfeed uh went public through spack became worth billions of dollars it was worth billions of dollars in the private market the media business especially the advertising one is incredibly difficult especially in a down market also buzzfeed had a very expensive news division that had done serious investigative reporting it was actually really well done uh they had actually won a pulitzer in 2021 when they reported on the treatment of the uyghurs and using satellite imagery buzzfeeds as a news organization was backed by venture capitalists and that is something you will rarely see venture capitalists do not like to back content companies because they're low margin they don't scale they can get to hundreds of millions in revenue but they don't typically get to billions now technology might uh so something like a social network instagram facebook google search a technology platform that has advertising in it youtube user generated content that works fine but when you have to pay for the journalists who are not cheap you know journalists you know probably at buzzfeed averaging starting salaries 50 60k and you know uh going up to 100 and maybe there are a couple all-stars in there who get paid two or three hundred thousand

SPEAKER_00: dollars a year well they had another riff uh their stock's down to a hundred million dollar market cap just to give you an idea i mean they do a couple of hundred million dollars in revenue so they're trading at less than their revenue and we talk about one times revenue two times revenue they're below that now uh they're down 90 percent since uh going public in december of 2021 they were valued back in 2016 at 1.7 billion dollars they should have and they had raised 200 million

SPEAKER_01: from nbc universal they should have sold the company at that point but the news business is tough and this is a cataclysmic event but what i can tell you that's really interesting to me

SPEAKER_00: is when you look at how the media cycle works every time we've seen the industry uh go through a recession a depression a correction when people get laid off they will then go start their own

SPEAKER_09: publications and it happened with the web in the 90s uh and email newsletters then we saw blogs which i

SPEAKER_01: was involved in within gadget and joystick and all these great blogs and then podcasting which i was also involved with uh and even mobile apps mobile apps never really worked here in america they do work in some other countries like smarter news in um japan and china and some other places korea news apps have become very popular they're not popular here kevin system's working on a new one but this is an opportunity for all of those people who've been laid off as hard as it is to look and say hey maybe um i can start a podcast maybe i can start my own media company the secret to media is keeping expenses low and what happened with buzzfeed is they had venture money and venture money thrown onto a business like this distorts it and it makes it very hard to understand that the fundamental economics of the media business which are generally horrible and now solo media efforts like this podcast right which does a couple million dollars in advertising if you can keep the staff size under 10

SPEAKER_00: or so yeah you could you could build a profitable business perhaps even a very profitable business

SPEAKER_01: but you have to get rid of all the infrastructure you can't have offices you can't have layers and layers of management and investigative journalism is some of the most expensive items that you can produce on the web because it takes six months and sometimes they don't go anywhere you might have five people working on an investigative story and it just fizzles out or gets no traffic

SPEAKER_09: adding to this problem was buzzfeed had an addiction and a dependency on facebook and facebook rug pulled them i believe multiple times so remember facebook pages facebook stories

SPEAKER_01: optimizing headlines uh paying for facebook headlines and then doing what's called arbitrage you buy a bunch of traffic from facebook at you know one price and then you try to sell premium advertisers and then at some point facebook was like you know we'll just keep the traffic

SPEAKER_09: here and we don't need to send traffic to buzzfeed so they didn't have direct traffic to their own website and the media business is hard and it really is moving when it gets this hard

SPEAKER_01: you start to see unnatural acts occur and it becomes largely entertainment and clickbait the audience is starting to understand this so this has turned into a really vicious cycle and it's not all publications but many publications are fighting to get attention so then they go with whatever the clickbaitiest headline is as we just talked about the previous

SPEAKER_09: story oh my god the rocket ship blew up but the goal of this was of course to just get off the launch pad so this was an incredible success for spacex but that's not as uh sexy as a headline or as clickable as a headline as rocket ship blows up right and we see this really has manifested itself

SPEAKER_01: most acutely in what we saw earlier this week when fox settled with the dominion voting system for 787 million dollars let that sink in uh that's that's basically eight buzzfeeds at the current

SPEAKER_09: valuation is a lot of money uh the previous biggest settlement uh in the media space was 177 million dollars in 2017 between abc news and a south dakota meat processing company and this is four

SPEAKER_01: times plus that and this settlement happened as there was about to be a defamation trial in delaware fox acknowledged uh that the court had found tons of falsehoods that they aired but fox is not going to be required in the settlement to do apologies or retractions as part of the settlement i think dominion wanted to get this huge check and they got it a lot of the different folks at fox had to

SPEAKER_09: testify and there was a lot of discovery where they pull people's text messages emails and so if you

SPEAKER_01: look at just this settlement wow i mean it is such a large number fox had four billion in cash on their books so they're basically giving you know 20 of their cash over to this voting system i don't know how big the voting system company is but i think this is the biggest dividend they're ever going to give to their shareholders and they've been pretty quiet about the settlement from reuters

SPEAKER_00: host tucker calls and sean hannity who had been expected to testify in the dominion trial did not

SPEAKER_09: reference the settlement during their prime time broadcasts and this is something that we can all reflect on now fox news does not represent all media outlets uh but television news specifically

SPEAKER_01: has changed over the last two or three decades there was a time when the nightly news walter cronkright tom brokaw katie corek there was uh considered a a an honor and uh that this was a vocation and it was an important service to the public that you get it right over time uh cnn came out msnbc which was originally a partnership between nbc and microsoft that's the ms and msnbc if you don't know that you can look it up but of course fox news and it became entertainment and so you went from reporting to opinion and the audience was trying to parse that am i watching walter cronkright am i watching tom brokaw peter jennings somebody who's telling me really specifically what happened in the news well researched or is this just a talking head or is it an entertaining talking head and really the audience i think has now figured this out calling it fox news i mean if they just called it fox entertainment or fox opinion they could just call fox opinion a network and that would be i think a little more honest because when you watch these and i'm not just saying it's fox i mean msnbc obviously a ton of opinion folks and very little original reporting a lot of times their original reporting is by having a new york times reporter on the program so this is indicative of something

SPEAKER_09: that's you know been happening in the media space and it's why twitter podcasts email newsletters and

SPEAKER_01: other independent journalists are doing so well right now it's because the audience wants to talk to a small number of people they feel they can trust and they are trying to figure out what the motivation of that person is so you're probably here listening to this week in startups wondering hey what's my motivation i invest in startups i'm passionate about it i don't need to do the podcast every day this amount of money i make from it it's not life-changing for me i do it because i love it i have a passion for it so you can infer from this i'm an investor passionate about startups passionate about technology

SPEAKER_00: and i enjoy doing it does that mean i am pro technology of course my pro entrepreneurship and capitalism of course but am i trying to entertain you and maximize the revenue and ratings i'm not going for ratings here obviously but i was going for ratings it would sound like maybe some other tech

SPEAKER_01: podcasts where i'm you know being hysterical about technology and whatnot so we try to just keep it 100 here keep it a buck keep it super serious and insidery and always try to tell you the truth

SPEAKER_00: okay listen if you're running a sales team you got a design agency you had a media business you know the hassle of one pagers right they never format correctly on mobile you can't track them properly it's a complete mess i have worked in the media business for many years three decades in fact i'm getting old and nobody had figured this out until now you have to check out issue it's issuu.com issue is the all-in-one platform for you to create and distribute beautiful digital content it's not just one-pagers those are important of course but you can create marketing materials magazines

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SPEAKER_01: for your free starter account or 50 off an annual premium plan as we keep moving here through the news

SPEAKER_00: is that ai is changing uh a lot and journalism is going to be greatly changed by chat gpt4 and other language models and they've been trained on large data sets we saw bloomberg release their own version of like a chat gpt and other people are doing that too but i have to take a little bit of a mini victory lap here you may remember on this week in startups and the all-in podcast i have been saying hey if you trained trained your language model on somebody else's data set that would break their ability and there's a very multifaceted but pretty simple rubric here of what's fair use and

SPEAKER_01: when you can use people's data if you create a derivative work out of somebody else's information and you impede their ability to then do that themselves you are going to get dinged with a lawsuit uh and you will be stopped well here we go reddit is going to start charging companies that use their data to train their ai models of course reddit's content comes from users so

SPEAKER_00: it is user generated which leads to the next question should those users who originally put it in do they need to have permission and do they need to get paid well no when they posted it to reddit

SPEAKER_09: they said reddit gets to keep a copy of that for all time right that's the agreement you make when you use any of these networks uh like you know and you posted them the portion who owns it whether

SPEAKER_00: it's core etc gets a license forever to use your content so be aware of that and so here's what i said

SPEAKER_30: back on all in episode 111 chat gpt and all these services must use citations of where they got the original work they must link to them and they must get permission that's where this is all going to

David Sacks: shake out and i believe that's well forget about permission i mean you can't get a big enough data

SPEAKER_32: set if you have to get permission in advance right it's going to be the large data sets quora yelp

SPEAKER_30: the app store reviews amazon's reviews so there are large corpuses of data that you would need like craigslist has famously never allowed anybody to scrape craigslist the amount of data inside craigslist as but one example of a data set would be extraordinary to build chat gpt on chat gpt is not allowed to because as you brought up robots.txt last week there's going to need to be an ai.txt are you allowed to use my data set in ai and under and how will i be compensated for it

SPEAKER_00: and so this next clip satya nadella will answer this question from the verge's neelay patel it's not a great answer kind of obscurifies but we'll talk about that after the clip

SPEAKER_36: but if i ask the new bing what are the 10 best gaming tvs and it just makes me a list

SPEAKER_39: why should i the user then click on the the link to the verge which has another list of the 10 best

SPEAKER_41: gaming tvs well i mean that's a great question but even there you will sort of say hey where did these

SPEAKER_43: things come from uh and would you want to go dig in like that even search today has that like we have answers they may not be as high quality answers they just are getting better so i don't think of this as a complete departure uh from what is expected of a search engine today which is supposed to really respond to your query while giving them the links that they can then click on like ads

SPEAKER_46: and search works that way in my mind there's a terrible answer he needs to address how they get paid he punted the answer and just said hey listen search works this way will the rights to the data will will google just say to quora hey we'll give you a billion dollars a year for this data set

SPEAKER_00: if you don't show anybody else they should so he's kind of saying hey chat gpt and uh giving an answer

SPEAKER_01: is going to give a link but they don't actually give links in these they just give the answer

SPEAKER_00: and so the question really should be you need to pay the people who wrote that story and back to the buzzfeed story from earlier today if they trained chat gpt on buzzfeed's content and buzzfeed is struggling right now well maybe we can fix so sometimes there's an opportunity here maybe we could give buzzfeed 50 million dollars a year they give they get 10 million dollars a year from five

SPEAKER_01: different language models who want to use their corpus of data every year maybe reddit gets a hundred million dollars maybe reddit says to their top users if you contribute over this number of words

SPEAKER_09: we're going to put you into this pool and uh or if your content gets used more regularly by a language model again this is somewhat complicated but not unprecedentedly complicated because we have sampling in the music industry um there could be some money that is shared youtube shares revenue advertising revenue with its users and so why couldn't a language model and you know google should just if i'm google right now are we just doing exclusive content contract with reddit and quora for a billion dollars each for 10 years 100 million a year and block microsoft what's going to happen when these

SPEAKER_01: lawsuits drop because i do think this will result in lawsuits is you could get an injunction against somebody like let's say chat gpt um if they did in fact use reddit which i believe they use reddit twitter they did everything and google's ward has probably used everything so if you are using that

SPEAKER_00: content you can probably get an injunction and and basically turn the service off so this is going to result in some very large checks being cut by the people who have trained their models without

SPEAKER_01: permission on tuesday reddit said it planned on charging uh for access to the api it were made free for developers and researchers for non-commercial use but obviously of microsoft chat gpt google bard they're using it for commercial and according to the new york times 57 million people visit reddit every day it's a very large website a small number of people contribute to it but the ceo uh steve huffman who's been on this program it's been a while uh steve come back on the program anytime i would love to talk to you about this he says more than any other place on the internet reddit is a home for

SPEAKER_00: authentic conversations there's a lot of stuff on the site that you'd only ever say in therapy or

SPEAKER_01: aaa or never at all that's an interesting insight actually the reddit corpus of data is really valuable but we don't need to give all that value to some of the largest companies in the world for free crawling reddit generating value and not returning of any of that value to our users is something we have a problem with it's a good time for us to tighten things up so he's indicating there that the user should be cut into this i think uh and when he says it's a good time uh i think that has a lot to do with the fact that reddit uh was planning to go public and this would be an incredible story to go public with hey we have advertising revenue we'll have some sort of subscription or maybe a virtual currency they were playing with their reddit gold but really if they can start dropping hundreds of millions of dollars and licensing fees to the bottom line that could be extraordinary interestingly shutterstock sold some of its images and the data in those images to open ai which was

SPEAKER_09: used to create the dolly text to image model there are a ton of different uh lawsuits that have already

SPEAKER_01: been fired off i've talked about them before here and if you follow elon on twitter he literally says to a tweet about microsoft using twitter he says they trained illegally using twitter data lawsuit time

SPEAKER_00: so i don't have any inside information but there you have it folks uh right from elon himself so this is going to be a lot of popcorn in the coming months and weeks and it really is fair for these content sites to get paid and maybe we can fix journalism here maybe the new york times uh maybe washington post maybe cnn maybe fox if they did have a revenue stream that was based on high quality content as

SPEAKER_01: opposed to link baiting maybe they would do less link baiting and just focused on incredible content

SPEAKER_09: right because they wouldn't be worried about the advertising the eyeballs and chasing you know an extra 25 of people to click on a link that maybe isn't as accurate as the boring reality of most stories in

SPEAKER_00: life another uh important story has come up tiger global has told its lps that its 12.7 billion dollar venture fund had a loss of 20 at the end of last year that seems like a low number actually when you think about how high this was and it's uh important to note the paper losses net of the management fees so this doesn't include the management fees they recorded an eight percent loss in june of 2022 11 loss in september of 22 this is all from the same fund and they had launched this 12.7 billion dollar

SPEAKER_01: fund in october of 2021 the peak of the covid zerp which stands for zero interest rate policy and uh all that tech craziness so they came in they were the last money in they paid the highest prices and um in an article earlier this year the waltz journal reported that tiger marked down all of its private investments by about 33 percent makes sense to me that wiped out 23 billion dollars in paper gains this

SPEAKER_09: fund has been largely deployed so this is going to be a very very painful process and they're not the only ones so while people lps are leaking these documents uh you know some of them might be upset

SPEAKER_01: it's going to um be tremendous markdowns and crypto is a big part of this ftx and openc were two of the

SPEAKER_00: big investments that tiger had made ftx of course has been completely marked down they had invested 38 million dollars they currently market to zero dollars that's the correct mark 100 and this is the book

SPEAKER_01: value this is what they believe it's worth on paper openc which was really printing a lot of nfts 127 million they marked it down to 30 million bite dance they invested 145 million marked it down 30 that seems reasonable because of the issues with uh or the chance that obviously bite dance might uh or i should say the chance that tiktok could be shut down hopefully it gets divested and they make a ton of money from that the crypto stuff has been just a complete disaster a disaster and this is why late stage late stage investing is going to be brutal for the next couple of years as late stage funds try to figure out how to take the medicine here hopefully some of these companies become legendary companies and they make up for the losses but this will be a painful number of years i'm glad i'm an early stage investor because when you're investing at a 5 million to 20 million dollar valuation you know you could lose your money and go to zero of course most startups do fail but you the chances of overpaying would be you overpaid by 2x 3x maybe 4x and we talked about this previously with y combinator valuations being maybe two to four times reality of if they were non-yc companies and didn't do the demo day whipping people up into a frenzy so worst case scenario you doubled or tripled the valuation in some of these sas businesses or some of these crypto businesses people may have paid 50 times what they're actually worth on there were 100 times and there might not be an exit that will ever be above those high water marks and there's a term for this venture tourists sometimes people dabble in venture

SPEAKER_09: capital sometimes venture capitalists dabble in private equity sometimes people from other

SPEAKER_01: countries with large amounts of cash will come in and dabble in hollywood right we saw the japanese russians and now the middle east want to be involved in hollywood they will pay for big productions and then maybe they get bored with it they don't make any money and they leave so chance things could bounce back but we will see a lot more discipline in the later stage and that's because the public market

SPEAKER_00: comps are so much lower so somebody asking for 50 times or 100 times or 200 times revenue when the

SPEAKER_01: publicly traded company that you have liquidity that you can trade in and out of is that 5x 2x 10x

SPEAKER_09: i just talked before about you know how much is uh buzzfeed trading and if you got 100 million dollar market cap and two or 300 million in ad revenue i think is where they're at they're trading out at half of their top line revenue it's crazy so it has been a brutal brutal slog for people like tiger and they may exit the business completely is a possibility or they will maybe have a little more

SPEAKER_00: discipline if you remember we talked about tiger strategy they were outsourcing their diligence they were doing multiple term sheets a day reportedly and they were doing what's called momentum some

SPEAKER_09: people might say hype but momentum-based investing they said hey all all the people who came in late stage previously double tripled their money before these companies went public and that uh rule um just did not continue so they were uh in this game of last person standing they didn't get a seat so it's uh pretty hard right now and uh but we'll get through it and the venture tourists are gonna have a little bit of a

SPEAKER_01: tough time the people who have been here uh doing series a's and b's and seed investing and accelerators incubators and we're we're all working really hard sometimes we get an offer here at this

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SPEAKER_01: and up to 50 discounts thereafter okay let's do a couple of ask jason questions some of you have some questions for me david from abacus computing a quantum computing startup asks jason what is the best way to

SPEAKER_00: position a mostly experimental technology at present to potential customers in our case quantum computers man that's really hard what you need to have is somebody who is a really true believer they have a really

SPEAKER_01: vibrant business right now and they want to have an option to get ahead of their competitors vtols is a perfect example self-driving cars perfect example you saw uh the car companies invest in a lot of self-driving car technology companies you saw uber and car companies invest in micro mobility and vtols vertical

SPEAKER_00: takeoff and landing so if you want to really get ahead of your competitors and you don't have r d

SPEAKER_01: internally and you've got a lot of cash laying around you might want to make a frisky bet like that so you would be looking for somebody i don't know if dell computers has an effort here or someone like that or somebody who would use this as a potential customer down the line like jb morgan or some finance company they believe they're going to need this or google believes they're going to need it they might want to either invest or maybe pre-order some of this hardware and software from you but this is why often experimental technology is done within a laboratory at a

SPEAKER_00: university and then eventually when it's ready to be commercialized they have a licensing group at that university that licenses it out so if you wanted to work on you know a teleportation right now

SPEAKER_01: not many buyers i don't think american airlines going to make a bet on teleportation technology but they might make a bet on uh vtols sure why not right that doesn't seem like it's that far away

SPEAKER_00: they might invest in jobian in fact i think jobie did get some transportation companies investing in a great question blake from facet uh tech hiring platform asks ai will allow sales reps to engage prospects at scale with better quality messaging with this new tidal wave of outreach coming how does a company stand out from its competition to break through the noise so what he's talking about here is you have sdrs who will qualify candidates and then they email people they email people say hey do you want the software and what he's predicting is just like we all in the industry get many people asking us hey do you want to hire my development shop in san paulo or ukraine or manila or india or china or boise idaho i get these things all day you probably get some of them too or you get people saying hey who are you using as your hr provider i think it's going to lead to people building

SPEAKER_09: autoresponders with ai in email and it might burn out the email channel just like and it might it could even result in regulation so maybe they'll regulate hey because automated spam versus one-on-one

SPEAKER_01: spam the those are things that if a company gets too frisky sending too many emails it could damage their domain name if they damage their domain name what's going to happen uh they're going to get a lower

SPEAKER_09: ranking and then everybody in the company gets a spam warning so i do think that this ai outreach

SPEAKER_01: could get too efficient and people could abuse it for spam but the converse is also true people could use ai to respond and say no thank you or they could use ai to say here's a list of all the

SPEAKER_09: saas software we use and if you would like to compete against it you know we would like one year free so i could literally just tell somebody hey if you want me to switch from my hr provider to

SPEAKER_00: your hr provider you know the opening conversation is i'd like a year or two free and the ai could just

SPEAKER_01: ask for that which is kind of funny at one point i believe we work was doing that i remember founders telling me they had we work offering them six months free rent if they would sign you know a 12 year

SPEAKER_09: deal a 12 month deal or something right um and i think that let them put more fill their buildings up right and and hopefully people would keep paying so it's not necessarily a terrible idea but

SPEAKER_00: we will see a tidal wave or maybe the ai will be more intelligent and not send as many emails because they're doing better targeted ones which could also be better okay our producers actually asked chat gpt to write a sales email while i was answering that question my producers gave the following prompt write a sales email from jacentech a startup that sells internal communication software for remote employees that's better than slack and microsoft teams and it literally did this subject unleash your team's full potential with jacentech the ultimate internal communication solution dear recipient's name are you tired of juggling multiple communication tools just to keep your remote team connected say goodbye to hassles of slack microsoft teams and discover the future of internal communication with jacentech i mean why choose jacentech streamline communications enhance security and security and even put emojis in front of these ai power collaboration seamless integration claim your 30-day free trial for a limited time blah blah blah blah blah if you'd like to learn more uh email phone number best so it could already write a very generic sounding one that's not going

SPEAKER_01: to get through the noise and so what might get through the noise is hey jason or you know hey joe

SPEAKER_09: i i know that uh you at your company acme widgets uh are using microsoft teams and we know microsoft

SPEAKER_01: teams cost this price and maybe a more sophisticated pitch that's a little more personalized would work better but ai can write pretty reasonable uh copy already we know that and so i think it's just going to be messy it's just going to be messy thankfully uh email spam is something that is tracked by the major providers and you know whether it's microsoft or google's products everybody in between so they'll

SPEAKER_00: come up with countermeasures and we won't get as many of these all right bridget from to and from a gifting platform says we're growing fast and i'm running a fundraising process i can't hire a bigger

SPEAKER_01: team until i raise but i can't spend enough time on my raise without sacrificing growth this feels like the ultimate catch-22 i'm sure you've covered this before so i'd love to understand how vcs look at

SPEAKER_09: this dilemma when evaluating companies yeah the way we look at it is you need to have multiple co-founders in a company and if you had two co-founders one could do fundraising one could work on the product and one could work on growth and this is why y combinator r accelerator launch accelerator tech stars and others are looking for two or three founders in a company you've basically proven the

SPEAKER_01: point that you don't have enough leadership in your company vested with founder shares to be able to multitask on very important tasks like fundraising product and growth additionally um it's a competition

SPEAKER_00: so if you can't figure it out and other people can then capital allocators will rightly prioritize other investments and that's what you have to realize you're in a competition you are not like you are not guaranteed anything in this life you're not guaranteed to get any amount of funding you have to fight versus your contemporaries and in a market like this it's going to be pretty dogged

SPEAKER_01: and it's going to be dogged for smaller dollar amounts so while i sympathize with you you need to step up your game is basically what it comes down to you need to either work harder or get partners and if you had partners probably wouldn't have sent the email and i don't doubt that you're working hard but this is why starting a company is not for everybody okay we'll take a final question this one's from josh at an esports company he's developing racing simulations he asks how do you think video games influence how do you think video game influencing gamification has impacted user acquisition for startups loyalty programs membership and ranks all seem more commonplace yes for people

SPEAKER_09: who don't know gamification is when you level up in a game started with dungeons and dragons you have it in martial arts go from white belt to yellow belt green belt these milestones make people uh motivated this is how humans work we want to just go up a ladder we want to get recognition the things that work

SPEAKER_01: really well our recognition affiliation and you know lastly compensation so really the the main driver

SPEAKER_09: is recognition status and when you look at something like angel list when it came out

SPEAKER_01: the size of your syndicate there was a ranking page how many deals you had done and i remember emailing naval like wait a second i have the largest syndicate with the most number of deals why am i not listed as number one with the largest amount of members the largest number of deals completed and um they said oh we don't count your accelerator companies in there why not they said oh well because you've already invested in them and you're getting a special deal and they had some fakatka answer for me and it really upset me because i was like well i'm number three on the list but i'm really number one and you've actually figured out a way to lower me in the rankings i was

SPEAKER_00: like hurt i'll be honest like i was like wait a second i climbed with the rankings and then i wait so wait a second do the rankings actually matter or does the amount of money i'm investing and how much of it i'm keeping matter and that's when i left angel list right i couldn't come to

SPEAKER_01: terms with the way they were treating me in the ranking system so these ranking systems are very powerful and it's a large part of what drives uh reddit uh hacker news and even if you open up your starbucks app how many coins you get right and really drive a behavior oh i'm gonna get some coffee when i go to the you know local coffee shop or do i go to a place where i'm gonna get double points because it's tuesday and i'm ordering a mocha or something it works i think it can be cheesy at times people who buy high-end products are not necessarily looking for this they're looking for other things so people who don't need to save money and they don't need status because like i don't need status in my uber but i

SPEAKER_09: would like a shorter wait time short and uh i have the uber one platform and one of the nice things on that is if somebody cancels i don't get charged or i get a certain number of cancellations so it took me a minute to get down the elevator at my hotel one time and my car left and i was like oh god i have to pay that five or ten dollar fee how annoying i'm gonna be 10 minutes late to the airport and i look in the app and it was like oh no they gave me like a courtesy uh like a courtesy cancellation right sometimes it's you know that little sort of niceness uh that bespoke you know oh i'm part of

SPEAKER_01: this more upper status right so it still has status but it's not necessarily about paying people off

SPEAKER_09: i think you can also take it too far uh there's an app called strava if you know it and they were

SPEAKER_01: timing people on different bike rides and stuff like that and people were trying to beat certain times and that made people do dangerous things right incented people to try to go really fast

SPEAKER_09: down certain runs on bicycles or something i find myself i'm i'm addicted to an app called slopes and um i was skiing and i forgot to turn it on and i'm incredibly frustrated with myself oh my god

SPEAKER_00: there's like five runs i didn't count in japan and there was three runs i didn't count in lake tahoe and so i had to like net that out at the end of the year and i keep looking at this year versus

SPEAKER_01: last year 36 days this year 40 days last year and i'm just obsessing about getting those extra four days same thing with steps same thing with scale so i just encourage people when you're making this to be

SPEAKER_00: thoughtful or using these things to be thoughtful about motivating yourself in the right direction and motivating your users in the right direction if you don't know about gamification i would look at

SPEAKER_01: anybody who has a loyalty program and you can just look on your apps and you'll find them all right everybody we will see you on monday on this week in startups corrects again to my friends at the spacex team and elon what an inspiration uh just amazing to to see that rocket ship go up and uh you know

SPEAKER_71: rack and stack next rocket up let's go baby