SPEAKER_00: if you're a founder this is the important lesson if you raised venture capital before and your team your team is made up of the people who raised venture capital and failed before you're like level one in terms of fundable then if you had an exit and you returned your you know if you return people's money back plus a little bit you're like level two if you had a great return

SPEAKER_01: and you returned a lot of their money back they had a great exit now you're like level three and

SPEAKER_00: if you ipo'd or you had like a billion dollar sale now you're like level four so if you just like look at those levels of founders level zero is you're just new to the game okay go to y combinator

SPEAKER_01: launch accelerator antler tech stars etc but once you've raised venture capital before now you can go to venture capitalists and say hey remember when i lost four million dollars trying to do this crazy pending company and it didn't work well now i've got a better idea and here's what i learned from my pending company and uh you know just putting the first two stories together that actually makes

SPEAKER_03: you more more fundable this week in startups is brought to you by aws activate aws activate helps startups bring their ideas to life as you build and scale your business activate credits grow with you to support your changing needs apply to aws activate today and receive up to 100 000 in credits visit aws.amazon.com startups credits lemon.io hire pre-vetted remote developers and get 15 off your first four weeks of developer time at lemon.io twist and squarespace turn your idea into a beautiful website go to squarespace.com twist for a free trial when you're ready to launch use offer code twist to save 10 off your first purchase of a website or domain all right everybody welcome back to this

SPEAKER_06: week in startups it's monday it is september 29th the summer is over folks and soon it'll be snowing and

SPEAKER_08: you will be getting halloween costumes thanksgiving dinner and putting up christmas ornaments ornaments oh my god how did this happen i just it's like the starter's pistol the only good news for me when the fall comes you know what that is what's that jason my knicks are playing in uae and i got invited by many people in the uae to sit courtside because i am a micro celebrity as you know my my select my i'm a micro celebrity a mini celeb and so people invite me to sit courtside if they can't get an actual celeb so you know they'll start with timothy chalamet and go to ben stiller and you know maybe ben stiller timothy i don't know whatever your bag is uh maybe a kardashian and then they'll go down and eventually they'll invite me when they when they before they sell their tickets i'm like the

SPEAKER_01: last before they put them on got it uh but yeah the knicks are playing in uae so thursday and saturday

SPEAKER_00: i get to watch them in the morning and i am so excited for my knicks this season uh but you're doing really well your eagles are four and oh that's great absolutely we're stoked now the context

SPEAKER_11: for here jason is that you have some views about eagles fans that i think you should put on the record and tell everyone in philadelphia the founders the venture capitalists what you think of them

SPEAKER_01: oh it's not like i have like a polarizing view i don't want to create a palmer lucky like situation

SPEAKER_15: but they're terrible they're horrible worse fans in sports i mean they burn things down they defecate they urinate they i mean was this the group that ate oats out of horse dung i think when they won that would not that would not surprise me but what matters literally like a guy got on his knees and was like i'm gonna eat that oat out of this horse dung on the street and then like they're climbing up they're in tidy whitey underwears on the top of lamppost poles if these guys go 10 and 0 or something crazy 7 and 0 i mean philly they're gonna just i mean they have to send in the national guard which i think you know trump's on a 10 city national guard door anyway so yes yes just skip chicago and go go straight to philly uh but congratulations to them that's pretty that's that's pretty hard to do to start the season it is pretty hard to do and what's even more

SPEAKER_11: important any eagles fan will understand this but the cowboys the dallas cowboys the team that claims to be america's football team is currently one two and one so ha ha ha cowboys all right listen we got a

SPEAKER_15: lot to get to and friend.com i saw that had a lot of main character energy people are losing their minds

SPEAKER_08: over friend.com tell us a bit about this all right so friend is a ai pendant one of the startups that

SPEAKER_27: was founded in the wake of the launch of chat gpt when people really wanted to bring the llm closer

SPEAKER_11: to their lived experiences their life jason uh friend.com is a 129 pendant and basically it's a digital companion think of it as something that sends you text messages and kind of is your friend throughout the day and they're back in the news because they put together an enormous campaign in the new york subway here's a picture of it here is the ceo avi schiffman describing this

SPEAKER_27: as the largest nyc subway campaign ever and the if you can't if you're on the audio version it has signs like i'll never bail on your dinner plans friend.com and just is if you don't have enough friends you can get this pendant and then it'll be your friend now not everyone was convinced here's an image of someone who uh graffitied on the ad writing surveillance capitalism get real friends which is a pretty big diss but i think also you know if you're this company no publicity is bad publicity uh but jason i think that our view or at least my view is that uh we don't need to ai fi

SPEAKER_10: everything so to me this seems a little bit outside of my box but i'm curious if you have

SPEAKER_01: a different take i mean i have been super critical about persistent recording because listen i'm a gen xer i think you know i actually care about privacy and the surveillance state and i have enough scar tissue to know that anything that end up just firsthand experience anything that can be hacked is going to be hacked that's just how it is folks and so you learn this over typically you learn this the hard way you know something gets hacked you know whatever your bank account your email something and uh your group chat and that's what will happen with these somebody will hack it um not necessarily friend.com but all of these and you will be having a spicy conversation or you'll be in a therapy session or you'll be drunk with your friends and you'll summarize your friend in their worst moment in time

SPEAKER_08: and i can tell you you know whatever your you know friend's worst drunk moment in time is like probably not meant to be broadcast to the world so i do have um issues with this technology but i also am smart enough and experienced enough to know that this is an inevitability people are going to embrace these there's going to need to be some regulation i told the story here i was at a

SPEAKER_01: dinner with a friend of mine and he had one of these note-taking pendants and like i don't know a couple of minutes into the dinner i see like a glowing white led not like glowing in a major way in a minor way and i was like what's that he said oh it's my ai pendant and i said oh um and he said is that a problem and i said i mean only if you want to remain friends like you you're recording six

SPEAKER_15: people at a dinner like what and he took it off but he showed me and it was for the first five minutes it was a perfect transcript like i was wow that's insane in a restaurant no so i just want to encourage

SPEAKER_31: everybody to understand you're being recorded and transcribed already it's already happening so

SPEAKER_01: that doesn't mean we should do more of this what's interesting about this story is the amount of hate

SPEAKER_08: for this uh founder who i believe is brilliant uh friend.com i think he spent like 18 million on that domain i'm not sure if that number is correct but i saw that go by in my feed uh and friend.com is you know that's a that's a domain worth a couple of million 18 million certainly overpaying for it by a factor of at least three or four x should be no more than five million for that domain but okay when i was at aol we bought games.com and the guy wanted 10 million for it and had a conversation with the leadership and i was like the domain guy there so they were like do you think we should do it i said give me the rough profile of our games business they explained the games business to us and i said yeah pull the trigger on that 10 million if worst case scenario is we can resell it for five million if this isn't a priority anymore and we'll have lost five million but we've already got tens of millions of dollars in profit from this business why not have yeah

SPEAKER_23: uh jason it was uh according to producer oliver it was 1.8 million for friend.com not 18 million so

SPEAKER_10: they didn't overpay they actually may have gone in for uh relative steel that's actually cheap yeah that's cheap so uh and that is this company has raised how much uh 2.5 million that we know of so a pretty material chunk of that went to that domain but if you sell a device for a second if

SPEAKER_00: they did the largest ad campaign in the subway that had to be millions of dollars so um we need to figure out how much that they must have raised since then we we we need to as producer cloud to get

SPEAKER_37: involved here because they must have much more money raised they raised a 2.5 million round in july 24 and then another 5.4 million led by pace capital in december of that year so we're talking about

SPEAKER_11: the first round so a total jason of 7.9 million uh which actually now that i say i think i say that out loud 1.8 million for the domain a million for the subway ads and they have a harder device shipping theoretically later this year that's pretty efficient overall i mean here's what i'll say um

SPEAKER_01: the the people who are like that should have gone into your product etc okay you can make that argument hey a million dollars with you know i don't know five more team members highly paid 200k all in would they make a better product it might not it might not be an either or and what this signals is um to a venture capitalist that this person understands branding and is willing to go big there there are far more founders who don't who are not willing to go big and vcs are like well i have all this money sitting over here i would like to see you swing for the fences so if you feel you have product market fit then go ahead and spend a couple million on marketing if you can afford to do it but this obviously could be runway if the startup was spending two million dollars a year uh you know and they're burning 150k a month let's say uh 200k a month you know that two million dollars could be an extra year or so of runway in which case you would be like hmm but this person's playing to win and putting aside the product i do think there's a market for these and spending this kind of

SPEAKER_08: money seems a little bit aggressive maybe a lot aggressive to people but here we are we're talking about it as the number one story and it's the i think he has 25 million views on the tweet about the largest new york city subway campaign ever so let's say the subway campaign got 5 million views then maybe 5 10 million people take the subway every day probably saw this maybe uh maybe that

SPEAKER_01: means 15 million will see it over time 25 million views on the tweet about it if you want your business to succeed online it has to stand out and that's why you need a beautiful world-class website the good news is you don't have to hire an expensive designer anymore nor do you need a bunch of developers no squarespace has all the tools you need to claim your domain and start building your company hey maybe you got a product to sell maybe you want to show off some samples of your work maybe you've got a new service you're providing well squarespace is the all-in-one tool you need for your business to grow and flourish and they offer beautiful templates maybe you want to start an online course or you're scheduling appointments for people maybe you're generating client invoices all that is built into the product everything you create with squarespace is pre-optimized to show up in search engines as well so you don't need to hire some expensive seo person nope they're building your meta descriptions they're setting you up with an auto-generated sitemap and the seo is done before you even get started plus there's a new ai powered feature it's called blueprint which makes it easier than ever before to customize your website and make it really pop so check out squarespace.com twist for a free trial and when you're ready to launch go to squarespace.com twist to get 10 off your first

SPEAKER_41: website or domain purchase that's squarespace.com twist it used to be you did things irl to get viral

SPEAKER_11: buzz on social now i think he's kind of it feels like it feels like the the viral element of it's more important than the actual thing you're doing uh jason a couple of things first of all according to the friend.com website on the privacy point where are your memories stored that it records they say that they're encrypted by your friend's circuit board and if you lose your pendant they're inaccessible forever so it's on device now that doesn't solve the recording your friends point it does

SPEAKER_37: at least though mean that hopefully you're not going to have all of your memories leaked uh i still i

SPEAKER_00: mean they're using an industry standard you know concept in terms of keys you know you lose your key you lose your data you lose your keys you lose your coin like in crypto so i i get that um i'm sure

SPEAKER_01: there's an export feature where you could set it up at every year or every couple of months or whatever your bag is that you back up your data and export it and email it to yourself uh so uh i i i think that there will be a market for these i predict that the product being made by johnny ivan um sam waltman will be exactly like this some sort of a puck or device that you um has a long battery life that has a 5g connection and wi-fi obviously that has a couple of really slick design buttons on it that you can take out ask question to it has great speakers so it can play music so uh but here's the thing that blows

SPEAKER_27: my mind about this they have only sent out and activated nearly a thousand of these friend pendants so far so i know they've sold more than that but with d30 retention so 38 retention of 25 percent

SPEAKER_46: and only a thousand ships was this leaked or did he publicly talk about it probably talked about this

SPEAKER_27: is uh jason this is pulling from a uh note to his investors that he put on x here it is um as of july 30 since july 30th 464 friends have been activated uh now it's closer to a thousand according to him uh d30 retention 25 percent and over 125 000 messages have been sent it's a small sample size we're gonna have to see but they certainly have enough attention that if they can't convert this level of buzz and hype into a functional user base i don't know what their plan is but uh moving on

SPEAKER_11: paid.ai raised a 21 million dollar seed round jason this comes after the company raised a 10 million euro pre-seed round in march tech which reports the company is now worth over 100 million dollars now i like this company for two reasons one what paid is doing is interesting in product terms but also we just have the ceo manny medina on for a twist 500 episode that's episode 2175 if you want to go back and listen to it uh but what paid's doing is awesome so everyone out there wants to build ai agents that essentially do stuff for you that replace humans that lower your cost of doing business but it's really hard to price them because you don't really want to use a traditional sas models jason because that's going to ruin your margins because tokens are both variable in demand and not cheap to generate and then deliver so what paid does is tries to help people pinpoint their costs and then price on a per value delivered basis and therefore allow the agentic economy if you'll forgive me the phrase uh to actually be a a profitable business for startups that want to deploy these to end customers i think it's a cool space and i think it's really cool that they just raised a bunch of money right after

SPEAKER_47: we talk to them yeah i wonder who is actually using this because i don't know of any ai agents right now

SPEAKER_08: out there in the field i've yet to see somebody like say talk to my ai agent with the exception of maybe customer support but it feels like something along the lines of stripe where you're going to be billing people based on consumption so it feels like rails and infrastructure so the bet you're making here

SPEAKER_01: on what really is not a seed in a series a this is a series a and a series b in terms of numbers yeah you're betting that there are going to be a billion agents out there charging for their money or a

SPEAKER_00: trillion of them and that some number of them are going to need rails and i guess that was sort of like stripes pitch we people need to do commerce on their websites and you can drop in this javascript and we'll manage it all for them so makes sense um and i wonder if they have early revenue to back up this did they did they talk about their customers at all or is this all they did in the clouds yeah uh well

SPEAKER_11: during my interview uh with manny so he said that they quote broke code uh in january february this year so it's a very young company i i know i i love that phrasing um started out with the pilot customer they now have close to 20 of those and they quote just landed their first enterprise customer last week now a couple weeks ago but yeah so they appear to have an actual real customer and maybe two dozen pilot customers so very nascent uh but manny medina was able to raise this amount of money at such a high valuation because he was one of the co-founders over at outreach and he was their ceo for a long time that makes sense yeah and that company was worth 4.4 billion back in 2021 uh paid.ai i think it's a cool company uh if agents are going to become big they'll become big if agents flop uh they will

SPEAKER_00: too but i love a binary bet in startup land yeah i mean when you see a hundred million dollar valuation and 30 million raised with one customer that can be frustrating for you know founders who have a million in arr and they can't raise a series a right uh and so when you see that always double click and see if this is a successful founder with an exit if you're a founder this is the important lesson if you raised venture capital before and your team your team is made up of the people who raised venture capital and failed before you're like level one in terms of fundable then if you had an exit and you returned your you know if you return people's money back plus a little bit you're

SPEAKER_01: like level two if you had a great return and you returned a lot of their money back they had a great

SPEAKER_00: exit now you're like level three and if you ipo'd or you had like a billion dollar sale now you're like level four so if you just like look at those levels of founders level zero issue you're just new to

SPEAKER_01: the game okay go to y combinator launch accelerator antler tech stars etc but once you've raised venture capital before now you can go to venture capitalists and say hey remember when i lost four million dollars trying to do this crazy pending company and it didn't work well now i've got a better idea and here's what i learned from my pending company and uh you know just putting the first two stories together that actually makes you more more fundable let and because two things you've raised venture before and you're a serial team those two ah man people look at that that's why it's important to bring your last team with you get the band back together almost all the great bands you've heard of out there dire straits or whoever they probably paid played in a band or two before and then one or two of the best members left the band and then went to another band and then they started a third band and

SPEAKER_08: that was the band that actually hit you just history forgets those previous bands but um yeah really interesting story and great job getting that founder on the twist 500 the twist 500.com

SPEAKER_00: is where we're tracking the top 500 private companies the top 500 private companies and our newsletter

SPEAKER_06: uh which you can sign up for at thisweekinstartups.com newsletter hopefully that's working and if that's

SPEAKER_11: working you can sign up for our newsletter yeah if you want the newsletter just go to ticker dot thisweekinstartups.com that's where we're talking about the twist 500 companies because jason they

SPEAKER_66: don't get enough coverage when you're a busy founder finding a new developer my god that can become a

SPEAKER_67: full-time job and you've got enough on your plate i mean you're running a startup but lemon.io has done the hard part for you already they've got a crop of pre-vetted developers that they've ensured are experienced results oriented and prepared to make an impact at your startup and they can work right now at competitive rates these are skilled hand-picked devs with a minimum of three years of on the job experience and just one percent of applicants are accepted into their program lemon.io isn't just recruiting you the top talent that's out there they're helping you integrate them into your team if anything goes wrong lemon will find you a replacement developer asap and many of our launch founders and founder university companies have staffed up with lemon.io and we always get the best feedback so go to lemon.io twist and find the perfect developer or even a tech team in less than 48 hours and twist listeners get 15 off their first four weeks stop burning money hire developers

SPEAKER_69: smarter visit lemon.io twist so as we were going to record the show today anthropic dropped a new model

SPEAKER_37: claude sonnet 4.5 we actually went ahead and had the model itself explain to us what it does and what it does well we'll get to that in a second but how meta how meta how well no jason how anthropic actually

SPEAKER_10: in this case yes i was using meta with the lower case m i know i know uh you can't do everything that

SPEAKER_11: we're doing without a good paid plan over on anthropic so if you want to get claude up to the level that we have it you can get 50 off your first three months of claude pro if you go to claude.ai twist

SPEAKER_69: that's claude.ai twist now let's hear what it has to say producer claude says the big leap is that this

SPEAKER_11: is better at writing code we all know that claude sorry anthropics models have been very popular inside of products like cursor so not surprised to see another step here it's also going to do faster debugging it's better at the hard work of programming like refactoring your code and it has what it calls practical workflow improvements says quote i'm better at working with real world scenarios messy code bases incomplete requirements and legacy code i can help fill in the gaps and make reasonable architectural decisions based on best practices while respecting the constraints you're working

SPEAKER_48: with not surprised to see anthropic fire back jason after we saw xai's claw uh grok code fast one do so

SPEAKER_00: well yeah you know these uh teams are working extremely hard they're in the offices you know 996 and although these models don't feel like they're tripling or quadrupling like the functionality because they're coming out so frequently and they're typically 10 20 30 percent better at specific tasks if you're doing two of these a year three of these a year it's getting twice as good a year and i like the fact that

SPEAKER_08: they're dropping them more frequently yeah that seems to me to be a wise decision because you just get to um have more swings at the bat in communicating with your customer base and then your team is more dialed in so i think apple was always like twice a year two big keynotes i think airbnb did something similar and they copied it since um the ceo had a mentor in uh johnny ive and i think he just decided let's just roll up four or five features every six months do a keynote and it just gives

SPEAKER_00: a cadence to the team where you feel like you're accomplishing something by a date everybody gets worked up for it and uh yeah it's like a great management technique it's a great company cadence

SPEAKER_01: technique and you can then look back and you can start to not just on a quarterly basis by finances or a monthly basis by your pnl you can look at the product drops over time and see the impact they're having and you can also then measure your team hey you know is the team picking really good things for each

SPEAKER_00: six month sprint or are they picking vanity things are they picking what matters and here everybody knows that like code is the big piece and that you know and and workflows those are two major pieces that

SPEAKER_01: people are using so you can then give examples to your user base hey coders here's what you can now do refactoring etc and then hey for people who are doing workflow and using this for their i don't know um customer support or their sales function here are new features you can implement so it keeps a dialogue alive with your key constituents and i think that's what's starting to happen here these companies are starting to get into buckets okay for people doing you know x you know here's the

SPEAKER_08: team working on x here's the team working on code here's the team working on workflow here's the team working on images here's and then that will become personas designers finance people lawyers accountants you know service people writ large coders product managers and that means this is all going from very theoretical and open-ended platforms to very verticalized software that's what we're seeing here is the verticalization as we hit four or five six versions of this software um is more application

SPEAKER_11: layer functionality i think it's great yeah to that point um they also teased a new thing called imagine with claude which is it seems to be almost like a vibe coding service from them so going up into the app layer there uh but i want to just highlight how quickly things can change jason um we talked about uh the grok code model when it came out and i've been keeping tabs on its market share over on open router which does hundreds of billions of trillions of tokens so it's big enough to have a market share of material note but if you take a look at how fast things have changed this teal right here on this

SPEAKER_37: chart is xai's market share going from very little to 40 percent i think in the latest latest column so anthropic does have real competition on the coding front i think people are underselling how much of

SPEAKER_11: that market xai has taken so i'm going to be curious to see how much market share anthropic can get back at least on open router from the uh elon musk ai company because they really have done quite well

SPEAKER_00: lately gotta gotta hand it to them it's pretty darn impressive yeah uh at this pace we're going to see developers obviously become 30 percent more efficient a year 40 some astounding number then you're going to see people who are vibe coding or adjacent to developers maybe they have the ability

SPEAKER_01: to do light coding but they never took the coding job which is probably 10 times the 50 million developers in the world i always hear 30 million 40 million 50 million developers in the world i'm going to start saying 50 million 50 million developers in the world i think will 10x to 500 million in

SPEAKER_08: other words we're going to go from if there's seven or eight billion people on the planet what's the number seven or eight you know right now it's less than one percent of the planet is a developer it's going to go to five percent and five percent you know times seven eight million people 350 million developers 400 million developers that's going to be a very different world folks a very different world and that doesn't count um you know having the other 95 be able to vibe code or another 10 be able to vibe code i'm leaving vibe coding out of that i'm doing developers as a dedicated career and the next group of people who are developer adjacent and just haven't had the focus level or the aptitude

SPEAKER_84: or the time to to just go fully into development jason there's a company out there called circle and no

SPEAKER_37: i'm not talking about the staple coin company that went public earlier this year this is circle dot s oh

SPEAKER_00: we use this product we do yes for founder university we use circle dot so it's a community platform and it's also really good at um putting in your curriculum so you can have like here's our curriculum here's chat rooms so think of it as a place to bring a community together to function as um you know like a course so it's kind of like a course combined with a chat room combined with slack yeah it's it's very good we we like using it we are considering moving off of it because we just love dis we love

SPEAKER_01: discord and we love notion and so there's this tension do we use a full application like circle where people have to learn to use it again or do we use something people already know like the notion discord combination or notion plus slack but slack charges you for every person so it's very hard

SPEAKER_08: to do free stuff on slack it doesn't give you your whole history so we think the future is either circle or discord plus notion but it is something i've used and now i think for four maybe four years and it's really good circle dot so it's a great product yeah well it has a lot of competition but it's also doing

SPEAKER_11: very very well so in in may of this year the company said that it reached profitability and was going to reach about 50 million arr by the end of this year critically it's been essentially bootstrapping it's been making its own money it hasn't raised since 2021 and then this september just a couple days ago the company said it's going to blow past the 50 million arr milestone soon on track for its best quarter ever more fee cash flow every month and it can wisely reinvest and its rule of 40 score is up to 64. so here's a company that really has found an amazing growth trajectory here i'm just trying to figure out jason how common is this is this trajectory because they raised money before venture capital tiger etc back in the day and then they've just been exploding and funding their own

SPEAKER_67: growth feels very rare so what's going on here we're all familiar with aws amazon web services that's the cloud platform that powers so many of your favorite brands but do you know about aws activate that's their program for startups where they provide up to a hundred thousand dollars in aws credits for all startups whether you're backed by an investor or you're bootstrapping money is time to keep innovating time to delight customers and time for you to keep gaining traction you need runway and aws's activate is going to help you with that runway we hear this story from so many of our founding university companies are finding product market fit the words getting out about their product just a little boost finding some savings here or there to get a little extra time can be the difference between getting traction and bringing in revenue or hey let's call it what it is running out of money okay and shutting down aws knows this that's why they've created the ultimate toolkit for early stage startups looking to boost growth with aws activate you're gonna get up to a hundred thousand dollars in aws credits hands-on support and training plus exclusive discounts with some of our favorite companies and tools so start getting the support you need at every stage of your startup journey to learn more visit aws.amazon.com startups credits that's right aws.amazon.com startups credits

SPEAKER_00: well you know that whole cohort of companies they had a challenge in that they probably raised money at a very high valuation right uh when the tigers came in and did a lot of these rounds and they probably needed time to finish the product to explain to customers like me here's the value of this product to then get us to pay for it and to value it and um yeah sometimes it's better for a

SPEAKER_01: founding team to just keep their head down and work on product market fit then work on raising more money so um they had a million in arr in 2020 and then it grew 4x in 2021 it doubled in 2022 that's what you hear sometimes triple triple triple double double double something in that range and then a 2x run rate in september of 2023 so this is a high growth company high growth in the public markets is like uber or doordash or coinbase or robin hood 15 to 30 percent year over year is considered high growth

SPEAKER_08: that's a growth company blue chip companies grow five or ten percent right as i think generally the

SPEAKER_01: accepted um growth rate but yeah 50 million in arr profitable tons of money laying around that's awesome and then you don't have to dilute yourself so there's many ways to build a great company it doesn't always have to be just dumping huge amounts of cash into the company and doing unnatural acts sometimes the best thing to do is to sit there talk to your customers refine the product iterate on building a great team and if you want to understand the rule of 40 it's a saas software uh financial metric basically rule of 40 a company's annual revenue growth rate which here could be 50 it could

SPEAKER_00: be a hundred percent plus it's ebitda uh it's profitability so let's say you were had a 20 ebitda and you were i don't know grow you grew 40 this year you'd have a number of 60 they have a number 64

SPEAKER_01: and that's up from 45 so i think the reason this number is coming out i'm not sure where that number was released in a press release or in an interview is because they want to show that they are a great

SPEAKER_08: company to buy and then eventually for people to invest in ah okay so yeah the founders have been

SPEAKER_11: tweeting through their growth trajectory which i really appreciate because it gives us such a better insight into how companies are performing uh on the rule of 40 point jason i have heard different things from different people about what should count as profitability some people like operating cash flow some people prefer ebitda some people claim it really should be gap net income is there

SPEAKER_08: a standard in startup land that people should stick to i think as long as you explain your math you show

SPEAKER_01: your work is the way to do it most people will be able to figure it out sometimes you have one-time transactions that occur on a balance sheet of a startup that can just distort things let's say a founder got bought out so you use 10 million of your profits that year to buy some early shares and

SPEAKER_00: then you retire them how do you put that in so you'd probably separate that out you just say hey here's the gross profits or here's what our ebitda would have been um you know if we hadn't done this office build out or bought out this lease whatever it is so you just the growth is the growth that's easy so if the growth is 30 great and then yeah you can back of envelope explain away your profitability and if you get over 40 man it's just it's hard to fake that's what's nice about that number is it's hard to fake um if you had zero percent um profitability no zero percent ebitda but you were growing 50 percent year over year people would be like okay that's fine with me eventually you know you could stop marketing or cut some growth team or cut salaries and run this business for profits if it's 50 profit margin business and it's not growing yeah that'll come out as well um and probably balance they probably should have a rule of 40 where there's like a third thing which is and neither

SPEAKER_36: of these represent more than 75 percent right so there's some sort of balance between those two

SPEAKER_55: all right well i like that a lot but do you think companies today that have quite a

SPEAKER_11: you can get the rule of 40 in a number of ways because you can have high growth and some lack of profitability is there currently a a unprofitability percentage point that's too high to explain away

SPEAKER_48: with growth i'm thinking about early stage companies here that might be burning a lot of cash but also growing very quickly so is there an extreme that's too much no that's where you get to your

SPEAKER_00: runway and so if your runway is 36 months and you know you're losing 10 million a year nobody cares now if your runway is six months and you're losing you know 100k a month and if you can get that to 50k a month now you got a year of runway yeah you know people are going to have that conversation so it really has to do with runway and then can you raise more money and can you how easily can you raise money circle could raise money probably easily depending on what the valuation was when they did their peak zerp if they did a peak zerp type round which i'm totally guessing here but

SPEAKER_102: end of the day 95 million was that round valuation according to pitch book 395 no 195 oh okay so yeah

SPEAKER_103: that they could easily raise money again if they're at 50 million and they're profitable

SPEAKER_00: and they're growing uh 50 million in revenue times 10 times 8 is 400 million 500 million 600 million you

SPEAKER_01: could probably uh get a good deal i think ultimately that product and all these sas products that aren't at 500 million are going to be you know either becoming acquirers of other companies or they're going

SPEAKER_00: to be acquired and we're going to see a lot of roll-ups like iac and barry diller famously did

SPEAKER_11: a perfect segue to the next thing we're talking about uh menlo partner dd dos uh recently promoted to that role over at menlo uh tweeted out that he's quote met with dozens of slop as a service startups that are making millions of dollars using ai to create an endless stream of blogs for their customers to help them with seo and geo they're all growing insanely fast and then he adds the initiatification of the internet continues so i was curious what what companies might fit into that bucket um jasper does ai generated marketing content right sonic former yc company similar thing profound have them on the show they do geo and some ai generated content the thing is it seems that everyone agrees with you that this is either gross or in the eyes of many temporary that people are essentially taking advantage of a moment in time to make a lot of money how do they go with yeah okay what's your question yeah oh i just how do founders tell the difference because yeah people are doing well in the sector but we also don't like it so i'm trying to just balance out the two yeah so before dunking

SPEAKER_01: on any of these companies um it really depends on how much content and with what type of supervision

SPEAKER_00: i think a lot of these companies are probably the uh white hat companies that are saying hey we're going to help you do this in a better way so that you don't get dinged with a search penalty by google

SPEAKER_01: or bing or duck duck go the people who are doing the slop as a service are probably gray and black hat people or just gray and they tend to be just shops that you give them some amount of money they publish all this stuff then you you wind up getting reported to google as a slop generator they see your robots.txt they see your site map and they're like okay this is garbage and it is a moment in time

SPEAKER_00: where identifying ai content is going to become easier and easier and once they do that and you don't have an author and there's like an authorship tag and that authorship doesn't go back to a social media account of a known person ah you're going to start having problems google knows who wrote stories you know tech meme gabe has done an amazing job of building a database and semantically understanding who is the author of every article the new york times the washington post tech crunch all these

SPEAKER_01: publishing companies vox they know how to put the authorship on there they know how to put the bio of the person what's going to happen in the age of ai slop is those writers are going to become more valuable those companies that have authorship on them of known people that link to their content a substack for example if substack does their job like the new york times does or beehive does theirs and they don't allow slop on their platform yeah then they're going to move up so there's going to be like a slop rating and a known authorship rating that probably exists in some way today yes on the the latter part which is known authorship google knows who the authors are just like gabe at tech meme built that brilliant site where you can now like go see who not only like who's the author but who are the top authors with breaking stories by this category that data is amazing i don't know why

SPEAKER_00: google or xai or somebody doesn't just buy tech meme for 100 million no no in a day i mean not our beloved tech meme i mean yeah that's true if they bought it they probably would screw it up but um you know

SPEAKER_01: that kind of semantic content uh that he suffered over building that architecture super valuable today and so i don't know if dd um is talking about jasper and right sonic and profound but this um ai janitor in

SPEAKER_00: marketing content should always be a starting point that humans then clean up i would never let anybody produce you know ai directly to publish on the web for any of our properties and if i caught somebody doing it we did catch some people retroactively doing it man that would be like instant firing and now every company is going to need to have these rules no ai slop do not post ai content um really really bad and we had a story last week didn't we about how people feel about work slop yeah so this is becoming a significant issue um people are now hating droids they don't like the droids they don't want them in their bar like in star wars we don't uh we don't accept your kind here that's what's happening

SPEAKER_01: is people are going to start fighting for humans and spotify is going to have to make a decision substack is going to need to make a decision everybody's going to need to make a decision do we want to be a slop shop or do we want to say humans only in here yeah i saw um on a heavy metal

SPEAKER_11: subreddit that i frequent there was a ai generated band that people were discussing and it was the metal core uh subgenre and people were calling it clanker core clanker being a a meat space slur for our digital friends i guess i don't know how to phrase that uh but this is becoming an issue across every

SPEAKER_48: single place i just don't think we're ever going to be able to fully replace humans trying to reach out to humans by putting robots in place of humans doing the actual outreach but uh for now clankers

SPEAKER_00: were actually battle droids in star wars so you remember those stupid droids in like attack of the

SPEAKER_116: clones that had the weird heads and jedi would like kill them a hundred at a time those were called clankers by jedi and by uh yeah were those the ones that had the the bubble that went over them

SPEAKER_69: in the jar jar movie oh okay yeah jar jar movie yes they were thank you yeah those are clankers

SPEAKER_122: specific type of droid oh well i didn't realize it was a star wars reference yes no yeah it should

SPEAKER_37: look like a banana yeah yeah clone troopers uh hated them yeah so jason we have a couple of companies that we might add to the twist 500 today the first one's called fiat this is known for its founder

SPEAKER_11: phoebe gates uh has raised money from people like kleiner perkins chris jenner and hayley bieber

SPEAKER_37: it's doing quite well it's consumer ai breakout raised eight million dollars it's working on helping

SPEAKER_96: people find fashion at an attractive price not really my domain but i think people are going to be

Chamath Palihapitiya: interested in it yeah it's a chrome browser uh extension people love shopping i think it's a good

SPEAKER_00: candidate for consideration before we add it to the twist 500 i would want to see who the contemporary set is so when we do the twist 500 process we should look for fiat competitors you know established ones and new ones i think many of the larger llms are now incorporating shopping

SPEAKER_01: specifically we've got to look at fia in the context of what google shopping is doing that'd be very interesting and just compare side by side the results and ask yourself hey is the fia result a better experience does it have better content than a than a gemini search or which is basically google shopping that's the way you know a venture capitalist would do their diligence on these kind of products is side by side comparison of the results take out the logos take out the you know the accoutrement of the interface which still counts and just say what did you what blazer did you tell me

SPEAKER_00: to get if i described i want a blazer between 500 and 1500 that looks great and it's classic for when i go to nantucket you know in the fall for a wedding boom and just do those side by side the second one hux you know this competes a bit with open ai's pulse uh or what i used to do at inside like the inside daily brief we would just do a short summary of news people liked it but what i found was

SPEAKER_01: you know with news products we've never had a news app never had a news app in the united states reach critical mass you have to ask yourself why that is and it turns out people consume news in instagram tick tock twitter slash x facebook um those are the places people go for news and it's incredibly hard to build a product that is two three four times better than that experience what you can build is communities in verticals but i think hux like what i did at inside with apps or um there was um gosh

SPEAKER_129: what were the news apps at the time pulse was a news app uh there were circa was a news app i had

Chamath Palihapitiya: invested in circa oh i forgot this really interesting cohort because there was something called smarter

SPEAKER_00: news in asia and smarter news became um smart really i think it was smart news or smarter news app um we take a look here smart news you're right um and smart news in asia became something where

SPEAKER_132: people just lived on it it was so popular uh but again in the united states yeah um one last thing

SPEAKER_48: before we move on here uh regarding fia and e-commerce and the large ai model companies and who's going to

SPEAKER_11: win while we were recording today so this isn't actually in the docket um open ai announced that they're going to put out buy in chat gpt instant checkout and the agentic commerce protocol working with shopify and i believe stripe as well so there's quite a lot of movement in that space i think they really want to bring e-commerce into chat gpt because that's a way to make a lot of money

SPEAKER_48: um but yeah a space to watch and we'll keep an eye on it and last week we talked about ads coming to

SPEAKER_00: chat gpt so you know sam altman watched web 2.0 to today you know worked at and ran uh y combinator for a bit he understands monetization comes like just three or four different ways consumers can pay you for the product advertisers can pay for the consumer's product uh or transactions can pay for the product and i would be surprised if you wouldn't do all three of those in a product at scale

SPEAKER_48: like um chat gpt is yeah next up jason we're going to talk about main character energy and perhaps no

SPEAKER_11: one has more of that recently than tai lopez this is a well-known youtuber who was busted by the sec because along with his partners alex mayer and maya birkenrode they ran a ponzi scheme that involved raising money to buy distressed e-commerce brands and turning them into money pits as far as i can tell they raised hundreds of millions of dollars and between 2020 and 2022 their holding company called rev or rev uh cheated and they got busted by the sec and they're in quite a lot of trouble uh what's

SPEAKER_140: funny this is all allegedly this is what the sec alleges yes yes they ran a ponzi just so we're super

SPEAKER_55: clear here i appreciate that keeping me out of trouble one year at a time yeah uh the reason why

SPEAKER_11: this is somewhat humorous uh even though of course fraud's never funny and financial crimes are bad is because the man in question mr lopez uh did things like this jason i don't think i can improve

SPEAKER_143: on his own words check this out here in my garage just bought this uh new lamborghini here fun to drive up here in the hollywood hills but you know what i like a lot more than materialistic things i don't know tell me knowledge yeah me too in fact i'm a lot more proud of these seven new bookshelves that i had to get installed to hold 2 000 new books that i bought okay i don't know how to how to improve

SPEAKER_148: on that that's like that's like a bite size it's the amuse bouche of like um youtube i'm super aware

SPEAKER_00: of this because when i was doing my um uh my pilot for nbc that never got on air and then another reality

SPEAKER_01: tv group wanted me to do a show they they brought up tai lopez in both no and one of them it's come up like two or three times actually when you know i've talked to cnbc about doing shows whatever everybody and tai lopez's name would come up and they would be like what do you think of tai lopez and i was like i'm sorry i who and they would be like this guy and i was like oh i think he's selling courses or mlms you know multi-level marketing products and all of those courses and stuff like that i was always like oh god i hope i don't ever get perceived as somebody with a course because we have founder university and angel university in both cases founder university is free to founders as long as they show up they can't take the seat and not show up um and then angel university i think we charge like 500 bucks and all the proceeds go to charity and we've given 200 000 to charity obviously i don't need to do courses to make money um but it's always a red flag for me when a rich person with

SPEAKER_00: lamborghinis and gosh 2 000 books and seven bookshelves uh you know needs to make money off poor people with a course that's always like a bit of a red flag so yeah and then it was always very weird like people buying pure one imports or you know radio radio shack these logos because i did i do remember in radio shack went up for auction somebody was like hey should we buy this or whatever in one of my group chats and i was like what would be the plan because radio shack means something to

SPEAKER_01: a small niche audience of gen xers or older who used to use soldering irons you know those people are all going to be gone like what would you do with it and i brainstormed with somebody what to do with it

SPEAKER_00: and the best i could come up with was like maker uh you remember that magazine and event series maker that uh bill uh tim o'reilly had sort of done um i was like make it into a maker space yeah sell all that stuff in the back or in the front rather and then in the back just have classes and let people bring their kids there for stem classes and how to learn how to build circuit boards or whatever but yeah that's not surprisingly i'm not surprised by any of this tai lopez stuff uh every time you see these people you should just run it's really gross a couple more red flags here because the lamborghini

SPEAKER_11: part of this is humorous yes if someone's showing off their lamborghini to make them seem like a person of great business acumen what they're really showing you is their ability to pay depreciation on an asset that's not even very drivable um also the company rev was promising people uh 25 annual return and a two percent preferred dividend no that's never going to be the case no one's ever going to offer you that kind of guaranteed return it's fraud and jason they did use some of the money to pay back uh newer older investors they used newer investor money for that they stole allegedly 16.1 million for their personal use etc etc etc i don't think humans are ever going to stop falling for ponzi schemes but we can at least highlight them when they touch on our space and this was a pooled investment

SPEAKER_27: opportunity into e-commerce so it kind of lands in our domain it's fraud folks yeah it's uh i guess

SPEAKER_00: that's made off style right he was the new investors were paying off the old ones who were trying to redeem their shares yeah um startups are hard and you need to have diversification i wrote a book called angel it's super honest about how hard this is if you're going to do it you need to put in 20 hours a week for call it three four five years uh during your primary investing you're going to need to meet

SPEAKER_01: with 50 to 100 startups for everyone you put a small check into and of your 20 30 40 or 50 uh startups in your portfolio be prepared for 80 to go to zero very quickly within the first three years that's called the j curve and then if you decide you want to be at this long term you're going to have to have a strategy for exiting those investments that typically takes 10 to 15 years so it's an amazing career if you love startups if you love entrepreneurship and um you know you're retired with a bunch of money i think it's like one of the great jobs being an angel investor for successful accredited investors

SPEAKER_00: but i we we tell them in the angel university course which is based on the book angel and like the book is like 10 bucks or 20 bucks so like it's the greatest deal in the world if you decide not to

SPEAKER_01: become an angel investor because i scare the out of you in the book which i try to do um great and if you decide to become one you basically get everything i learned up until that point 15 or 20 bucks you can

SPEAKER_00: go resell the book for half that amount and of course you seven bucks and books are incredible uh in that way and so yeah it's like these are very hard pursuits and anybody who like i see this guy um grant cardone all the time uh on like cnbc or um this whole cohort of people selling courses or access to

SPEAKER_01: real estate access to startups and i run a syndicate as well when we do the syndicate.com it's only for accredited investors no retail have to be sophisticated basically or and have inherited a bunch of money or won the lottery and in all those cases you should only invest money you can afford to lose so i always tell people like with crypto or startups if you're a credited investor less than five percent of your net worth let's say your net worth was 10 million you put 500k into crypto let's say you lost it all well the other part of your portfolio should be making seven percent a year so in one year you've made up for your mistakes in crypto if you were going to retire in five years that would not be good but if you were retiring in 20 or 30 years that would be just fine you can weather the storm

SPEAKER_84: so just one percent two percent maybe even 100k 200k and be thoughtful about it folks uh always my best

SPEAKER_11: advice yeah i was just googling grant cardone because i forgot who that was and one of the first pictures that came up was him standing in front of a private jet which in my experience jason people who have private jets don't do there's like two rule there's three rules of private jets none there's

SPEAKER_01: four i can tell you these number one don't be late i was like an hour late for a jet with chamath he still tells the story um it was his it was my fault because i was like i have a speaking gig and i'll go to toronto with you to interview you for this other shopify thing or whatever but i'm leaving the shopping this gig here i got to get all the way to san jose it's like don't worry about if we're late we can go to another and it was like i hit massive traffic and we did have to divert from one airport to the other bummer uh second thing second thing you don't take pictures or talk about it that's what i'm saying third thing you let the principal decide where they're going

SPEAKER_00: to sit first so you come in you place your bag somewhere neutral you don't sit down you wait for the principal to pick their seat which is typically if you go in if there's like a four top in the front like four seats not that no table it would be the right one facing forward that's where the principal sits typically in my experience so you can sit to the left if you're having a conversation with them or cross from if they don't want to spread their feet out or caddy corner to them

SPEAKER_01: or you sit at the table back there if they want to be have privacy so you just say hey where do you want me to sit you got a preference you just say that yeah because they're paying for it well it's yes it's like being in somebody's car you know like or their house like you don't just go into the master suite and you're like i'll stay here it's the biggest bet and number four you have to read the room is the principal is the owner of the plane like reading the newspaper or doing work and put their headphones on or are they like hey how was your day and they want to talk so read the room if it's a

SPEAKER_08: especially if it's a long flight like if you're going to japan you know if you're going to europe this is like a 10-hour flight you can just say do you have a plan for uh sleeping or eating let me know uh whatever or you just read the room and just read the vibes and just say where do you want me

SPEAKER_171: boom that's it but part two or point two that you just said is you don't talk about it you don't

SPEAKER_11: talk about private yeah so if someone's trying to show you their lamborghini or them in front of a private jet red flags folks i have been from being totally honest looking at planes

SPEAKER_20: so there is that i may throw all these out and you might i might take you to uh vegas with me at some

SPEAKER_116: point or drop you off in new york on my way back but i have been looking at private jets and i just

SPEAKER_01: can't do it i have not been able to pull the trigger on only because i'm just still cheap i still think like a poor person so i was like i don't know man that seems really expensive i mean on the wall of my

SPEAKER_11: childhood bedroom i had a a sales brochure that i procured from to so falcon of their 900 ex jet

SPEAKER_179: oh that's a great jet a lot of my friends have falcons and the falcon is just also very good um

SPEAKER_00: per hour operating costs but the two i like are the phenom 300 uh and uh the pilatus pc24 and there are companies that let you either do a fractional ownership you can own an eighth that's fourth or whatever or you just buy a jet card for essentially 10k an hour is what it comes out to end of the day

SPEAKER_01: so you know if i spend i don't know 500k every two years i have 25 hours i can do three trips or two trips or whatever it is you know cross country or maybe three regional trips a year but i don't need it and i like walking through the airport alex you know why people stop you and say jason calacanis exactly i love people and i love talking to people i cannot tell you how many friendships or catch-up meetings i've had in airports i like walking through the airport i love going on uh emirates airline in the back they have a lounge after i get settled in my seat i take the business class i don't take the first class as you heard on all in this weekend and uh the first thing i do is i take my laptop i go to the back there's a lounge there's like a four top table like a diner table and i sit there with my laptop and i you know i get served uh you know some quest song and an espresso and i work and then people come back they're oh jason calacanis i'm like yeah and they're like i'm like what do you do and they're like i don't like want to sit and join me and people are like are you that guy are you weird i'm like just love people so if you see me out folks i love people i love people if you have courtside seats to uh nix game i'll go i don't even need to know you this week in startups founder university launch accelerator i'm at jason he's at alex email me anytime if you got a great idea for a company jason at calacanis.com launch.co apply if you want to apply for a meeting with my amazing team and get that process started founder.university is starting in mina but i think we picked all the companies i think i don't know if

SPEAKER_00: you can still apply uh mina dot i go to founder university you'll see the mina link at the top and founder university we do it three times a year here in the us see you next time everybody bye-bye bye-bye