SPEAKER_01: I love living in the present, man. It's great. Like, we're talking about real data centers in space.

SPEAKER_02: It's so cool.

SPEAKER_00: I mean, how do we not have a base on the moon 55 years later? It seems like we should.

SPEAKER_04: And if you asked anybody who watched the moon landing, hey, when do you think we'll have a base on the moon? They'd be like, I don't know, 10 years, five years? I mean, we're going to go up every year now, right? And it's like, no, we're just never going to go back. It has no importance. I want to know what the hell's going on.

SPEAKER_05: I hope I live long enough to understand something about the nature of the universe.

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David Friedberg: All right, everybody, welcome back to This Week in Startups. It is Monday, October 6th. Oh, my God, the summer is over, and there is snow in the mountains, so I should be able to get on my skis next month.

SPEAKER_12: Very excited about that. With me again, Alex Wilhelm. How are we doing, Alex?

SPEAKER_13: Fantastic.

SPEAKER_14: We were just discussing the importance of deer hunting before the show, and I just want to say it on record. Summer sausage is the reason why everyone should go hunt deer, because it's the best thing in the world and was a key food ingredient to my youth. Oh, really? Summer sausage.

SPEAKER_16: Okay, good to know.

SPEAKER_04: You know, living here in the great state of Texas, frequently people, I'll see them, and they'll hand me a bag.

SPEAKER_18: Oh, great to see you. I brought you some sausage. I went boar hunting. I went deer hunting. You know, whatever. And people just hand you meat. It's the nature of the place. Like, people are wearing guns on their hips. They're handing each other meat. I'm chewing on a cigar. I love it. I love it here. Really enjoying my second year in the great state. Yeah, deep into my second year. And let's get started. I saw OpenAI and AMD are doing a deal.

David Friedberg: And this deal comes on the heels of just two weeks ago or last week, Jensen putting $100 billion into OpenAI.

SPEAKER_24: So I'm confused. Tell me everything.

SPEAKER_26: Okay. So we're talking a lot about Project Stargate, Jason, and all the deals that are part of OpenAI's,

SPEAKER_14: the American AI model company's infrastructure push. This is part of that. You are correct. A couple of weeks ago, they announced a $100 billion deal with NVIDIA that appears to be kind of like a share trade for hardware. The AMD deal is a little bit different and it could be smaller. So the gist is this. AMD is going to supply OpenAI with up to six gigawatts worth of GPUs. Not all at once, in several tranches. The first one will land in the back half of 2026 when their new GPU comes out. I think it's the 4150 in their line of GPUs. As part of this deal, OpenAI gets to purchase stock in AMD at one cent per share, the par value of its stock, in tranches again. So every time it buys a bunch of GPUs, it gets to buy a bunch of their stock for one cent per share. About 10% of the company is the way this one's going to shake out. But it's a lot of GPUs. It's a lot of stock.

SPEAKER_27: And soon, Sam Altman will own a sizable chunk of AMD, the largest of any single shareholder in the world.

SPEAKER_29: Well, OpenAI will own. Not Sam personally, obviously, just to make that super clear for the audience. Fair enough. Yeah.

David Friedberg: And so this is very non-traditional, to say the least.

SPEAKER_32: To say the least, yes.

David Friedberg: Yes. So OpenAI is buying a bunch of compute from AMD. Great. The money they're using to buy that is not AMD's money. AMD is just a supplier to them. AMD's not investing in OpenAI. Based on, yes. Unlike NVIDIA, which did invest in OpenAI, correct?

SPEAKER_13: That's my understanding of this. We do have an SEC filing in the case of the AMD offering.

SPEAKER_14: Which is where we got the one cent per share point. And as far as we can tell, that's exactly correct, Jason. But no matter how you slice it or how the money moves around, it's OpenAI securing quite a lot more compute capacity for the next couple of years. So it all kind of fits in the same direction. They're just tinkering with the right methods to figure this out. But I just didn't see OpenAI buying a 10% stake in AMD. I just, that was not on my bingo card, if you will.

SPEAKER_38: Yeah. So if they're buying all these chips, it says here in our notes

SPEAKER_04: that they could be spending as much as, I don't know, $90 billion in AMD hardware. So where does that money come from? Well, NVIDIA just said they would invest $100 billion into OpenAI. OpenAI obviously has other investors. So did they take money from NVIDIA and Jensen and then invest it into, and then are going to buy AMD shares? And their shares went up like 40% today, right? Like the market had a huge reaction.

SPEAKER_26: Huge reaction.

SPEAKER_14: But going back to the NVIDIA OpenAI announcement, the text is, to support this deployment, including data center and power capacity, NVIDIA intends to invest up to $100 billion in OpenAI as the new NVIDIA systems are deployed. So essentially, they're going to buy stuff from NVIDIA, and then I think NVIDIA gets shares in OpenAI, versus in the AMD deal, they're going to buy GPUs from AMD, and then they get stock in AMD.

SPEAKER_27: So I think it shows the relative power balance between NVIDIA on one side lots, and AMD on the other side less.

SPEAKER_42: Yeah. This is bizarre. And... Tell me why. Tell me why.

SPEAKER_44: Well, obviously, NVIDIA and AMD are in competition.

SPEAKER_04: And so it's fine if you have a ton of money, and you go out and you start buying from two different suppliers. I wouldn't expect anything else, right?

SPEAKER_18: You want to have a competitive marketplace. So that makes total sense, right? You don't want all your eggs in one basket if you are OpenAI.

SPEAKER_04: But the thing I find weird is the equity components of these deals. So NVIDIA investing a ton of money and buying shares in OpenAI, and then OpenAI is obviously buying a ton from NVIDIA. That screams of round tripping, and I'm sure that they are well aware of that and have been very thoughtful about outlining that. And then you have this deal, which is, hey, we'll buy some from you and we get some warrants. That's not unheard of, but it certainly is non-traditional. It just feels like there's a lot of money circulating around. And the most critical interpretation of this is that people are investing into OpenAI and they're buying more revenue. And buying revenue and round tripping is a big no-no. So I think that this is going to create a lot of interesting knocks on the door from like BSEC and places like that to just understand what's going on. And OpenAI wants to go public next year. So if they do go public, a lot of this information is going to be shared. But this is all based upon OpenAI successfully becoming a for-profit company. Sure. And that hasn't happened yet.

David Friedberg: So this is like,

SPEAKER_04: I don't want to say it's a house of cards, but there are a lot of interesting variables here. It feels very non-traditional. It's, yeah, nothing can go wrong.

SPEAKER_14: The other side of that coin though, just thinking out loud with you as you talk about this, OpenAI is a non-traditional company in its scale and how much it's changed, I would say, the world. And it's also facing what appears to be a chronic compute drought somehow still this far into the AI cycle. So could it solve a non-traditional problem using traditional methods of raising money and so forth? Probably not. But I absolutely agree that what we're seeing here increasingly sounds circular, risky, and also like it's a form of just leverage, Jason, or risk. It feels like quite a lot could go wrong in many companies if demand for AI services doesn't yield the amount of usage that OpenAI is pre-buying capacity against because the AMD deal doesn't really kick off until the back half of next year when these new GPUs come out that AMD is so proud of.

SPEAKER_54: That is another good point is what if

SPEAKER_04: they don't need this compute? What if it levels off the impact of compute on the product getting better? That's actually a very interesting question a lot of people are having. We've made this analogy many times before, but it feels similar to the dot-com build-out of fiber. And they built up so much fiber. And the music industry, the movie industry, wasn't allowing their content to be streamed. There was no YouTube when that was being built out. And storage was wildly expensive. Transport of video across that fiber was still pretty expensive.

SPEAKER_42: So yeah, this is probably all, we might be building out far more capacity than we need

David Friedberg: if all these deals do come to fruition.

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David Friedberg: Or maybe superintelligence, you know, takes off and we have so many jobs to run to cure cancer,

SPEAKER_04: to build bigger bridges, to solve math equations that will use it. And that's that Jevons paradox, I guess. Jevons, yeah. Jevons paradox that people keep talking about, like the induced traffic paradox. So it's going to be a while to see. And I think I heard on CNBC today, they said 80% of the gains in the stock market this year came from the AI trade. I don't know if that's exactly true

SPEAKER_18: or how they're calculating it. But my Lord, you know, there is a lot of AI spending going around.

SPEAKER_14: Yes. As we record this, Jason, OpenAI is having its dev day. Thank you for everyone who tuned in to us live in contravention of sticking around with Sam. But they did announce as part of that live stream that ChatGPT now has 800 million weekly active users, Jason.

SPEAKER_27: So plus 100 million from the last milestone, at least for now implied there's plenty of capacity needed to be built out, so.

SPEAKER_54: And for those of you wondering, producer Claude gives us a great, and you can pull this up, Alex, if you have a moment.

SPEAKER_38: Jevons paradox, J-E-V-O-N-S,

SPEAKER_04: is a counterintuitive economic principle that shows how improving efficiency can actually increase total consumption of a resource rather than decrease it, named after the 19th century economist, William Stanley Jevons, who observed it with coal use in England. The paradox works like this. When you make something more efficient to use, it becomes cheaper to use. The lower cost then triggers several effects. Direct rebound, people use more of it because it's cheaper. Indirect rebound, the money saved gets spent on other things that also consume resources. So your fuel savings might fund an extra vacation flight, which also uses fuel, or a second home. Economy-wise effects, the cheaper resources enables new applications in industries that weren't economically viable before expanding total demand. And air travel would be an example of that.

SPEAKER_18: It just wasn't cost-effective, and then it became so cheap that now Spirit Airlines can take you anywhere. So there you have it, folks.

SPEAKER_01: Yeah.

SPEAKER_07: And if you want to use Claude like we do,

SPEAKER_14: head over to claude.ai.twist. You can't do everything that we do without a paid plan, but Twist listeners get 50% off their first three months of Claude Pro. Go to claude.ai.twist to get started. All right, Jason, let's move on from the open AI buying the entire world, and instead talk about one of your favorite companies, Tesla, which has a new teaser video out that has a very interesting sound effect in the background. I'm going to pull that up now,

SPEAKER_80: and I want you to tell people what you're hearing in this clip.

SPEAKER_79: I'm listening deeply, and this is like some sort of a fan blade.

SPEAKER_04: It looks like it's spinning, you know, those little fans you have in your computer. But it looks bigger, and it says 10-7, which I guess would be tomorrow. There'll be an announcement.

SPEAKER_18: I think I know what this is, not because Elon told me or I got some intel.

SPEAKER_04: The Roadster 2 is, I believe, coming this year or in another seven. This is like the vanity project of all vanity projects.

SPEAKER_82: Sorry. And it's super late on Elon time. You know, he's frequently late, as I always tell people, frequently late, but never wrong. He always gets it done in the end and, you know, typically does it in such extraordinary fashion that your mind is blown.

SPEAKER_04: So he did say at some point he was going to create a leaf blower, I think as a joke, a quiet one, because he was so annoyed with leaf blowers outside of his house that are gas powered. And we have those in the market. So I don't think it's a leaf blower. In order to drive really fast, you need to have downward draft. And there's a number of ways to do that. Typically, the air coming into the front of a car can go through different vents and push pressure down, where you have a spoiler at the back, which will push pressure down. And sometimes you'll see, as in F1 racing, as we've been talking about on the show, you know, a car goes flying, right? Wind gets underneath it, not a good situation. There is an EV hyper car called the Mick Murtry, if I'm pronouncing it correctly, M-C-M-U-R-T-R-Y. Hypercars are cars that cost over a million dollars and can go typically well over 200, maybe even 250 miles per hour. And, you know, this is like the higher level than your typical Ferrari or Lamborghini. And so this car, and we'll show a video of it, can literally drive upside down. And the reason it can do that, this million dollar car, is because it has fans underneath it that create that downward draft. So these fans are pulling the car down, is my understanding of it. And here they're showing the car with those fans on, and they're slowly rotating it. It says it's got 2,000 kilograms of downward on-demand force from zero miles per hour. So why is this important? If you're making some insane turn, you're going to grip the road. That's what the tires are for as well, obviously. So I think this could be the downward drift fan

SPEAKER_00: for the new Roadster 2.0. You know,

SPEAKER_26: the whole team was just dying watching this clip right now because if their car drops, they have to build a new one.

SPEAKER_14: So can you imagine this?

SPEAKER_91: Well, there's also a driver in there.

SPEAKER_14: Yeah, but he's fine. He's fixable. He's replaceable. This car costs $1.27 million.

David Friedberg: Now, it's driving forward and backwards. You just, you saw it drove a little bit forward? Mm-hmm. That's insane. It's absolutely insane. I can't even believe they did this test.

SPEAKER_14: So prepping for this, I got to kind of poke around the McMurtry universe, if you will. That car, by the way, Jason, it's called the Spear Lane. And it's just about a million pounds or about 1.25 million USD. They took it around the Top Gear test track from the British television show. And not only did it set the fastest time of any car ever,

SPEAKER_50: including an old F1 car, it beat that by like five seconds. Like it was, it's crazy fast.

SPEAKER_04: Yeah. The speed in these cars, there's, I don't know if it was Xiaomi or one of the electric car makers just went over three, well over 300 miles per hour in a car as well. So top speeds are going up. I think the top speed records though will ultimately be a combination and the winners are going to be hybrids

SPEAKER_18: where you have like the Corvette ZR1X, which I'm getting one of when they are not a hundred over sticker. That car has a small, like the Corvette E-Ray. They took the lessons from the Corvette E-Ray. It has a small electric motor and battery. It can only go 10 miles on the battery, but it's just used to get you off the line really fast. Yeah. And then you kick into the ice engine.

SPEAKER_26: So Jason, I'm going to show you just a really short clip here of the BYD Yang Wang 09 extreme hitting 308 miles per hour. This is in kilometers per hour in the top left if you're watching the video.

SPEAKER_27: But what I like about this is just how the world seems so silly at this speed. Like the trees don't look real anymore as it accelerates past 500 kilometers per hour.

SPEAKER_108: Don't recommend going that fast. Yeah, don't do it. Especially if you're on a motorcycle near my house at night. Stop that. Be careful, folks. Be safe.

SPEAKER_110: But yeah, so that's my best guess. The other guesses people had were the leaf blower.

SPEAKER_04: It could also be something to do with HVAC. He's been building the HVAC systems in the cars to be super efficient. And HVAC systems like air conditioning and heat, these things have not advanced as much as they should. And he was talking about possibly building in one of the calls an HVAC system for like homes or for mobile homes, et cetera.

SPEAKER_82: So maybe there's an electric HVAC system coming. Don't some Teslas have that? Like the Model Y.

SPEAKER_116: Yeah. Don't some Teslas though have that like pandemic mode when it like doesn't do outside air transfer?

SPEAKER_14: So that falls in the same kind of bucket to me.

SPEAKER_119: Yeah, just efficient HVACs. What they found was the HVACs and ICE cars were never optimized

SPEAKER_04: because you just burn more gas. Who cares? You know, gas industrial complex wants you to burn gas. Why make it more efficiency? When you have a battery and you're trying to get miles and there's mile range anxiety, you look at every part of the car and you optimize.

SPEAKER_18: And the most inefficient part of the car, aside from the drag caused by air,

SPEAKER_04: is the HVAC system. Yeah. And that's why they would say like, oh, if you're running out of battery, turn off the HVAC. Yeah. Well, they made their own. And yes, one of the features, the biodefense feature means it pushes air through very thick filters that can take out all those particles. It's quite nice actually.

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SPEAKER_04: Especially if you have allergies here in Texas, it's kind of a necessity, but also keeping up with the, man, some of these places like Arizona and Italy and Texas, it gets so hot when it's 110 degrees, it's hard for your Tesla to keep up. And what they do here is, you know, all these cars have glass roofs now. Everybody buys $20 inserts on Amazon to block the roof so you just get less sun into your car so your air conditioner can keep up during July and August. The other option is to leave Texas in July and August.

SPEAKER_127: That's the option I'm taking. Most summers, try to get out of here for six weeks.

SPEAKER_14: I mean, it's kind of like an inverse leaving New York for Florida in the worst of winter. You just got to get out of the heat. All right. One of my favorite startup categories in the world, Jason, is space as a big science fiction guy. And one of the coolest companies that I've heard of is a company that wants to put data centers, not in the ocean, not on land, but up in orbit. And you flagged a great clip by Jeff Bezos talking about just that, which I have pulled up. I thought we would listen to it and hear what my fellow bald man has to say. Here he is.

SPEAKER_130: One of the things that's going to happen in the next, it's hard to know exactly when. It's 10 plus years, but I bet it's not more than 20 years. We're going to start building these giant gigawatt data centers in space. So these giant training clusters, those will be better built in space because we have solar power there 24-7. And the solar power there is, there are no clouds and no rain, no weather. So you can build, we will be able to beat the cost of terrestrial data centers in space in the next couple of decades. And so space will end up being one of the places that keeps making Earth better. It already has happened with weather satellites. It's already happened with communication satellites. The next step is going to be data centers and then other kinds of manufacturing.

SPEAKER_108: I cannot tell you how bullish I am about this.

SPEAKER_54: It's an exciting vision. I hope we live to see it.

SPEAKER_04: It's going to get a little crowded up there, I think. And of course, you got to get the data back down to Earth. So that'll be a mitigating factor, of course. But as these satellites, low Earth orbit satellites get faster, sure, it's completely possible. I don't think you're going to want to do this too quickly because it's going to be expensive to put them up there. But as the cost to get into space goes down and maybe the size and the weight of these H-100s comes down, you also have the temperature. And I don't think in this clip we had the temperature. He mentioned the temperature, but temperature is the other big issue.

David Friedberg: It's pretty cold in space, as you know. And so you don't have the issue with having to cool down these.

SPEAKER_18: You won't have the same cooling issues that you have here. So that's pretty interesting combination. The combination of more efficient solar and you don't need to cool it down could be a big win. I'm not sure when this happens, but there are a number of startups with crazy visions like this and they're worth keeping an eye on.

SPEAKER_50: Yeah, one of them is called StarCloud, previously known as Lumen Orbit. We actually had them on Twist

SPEAKER_14: January 17th of this year. If you want to check that out, episode 2073. And the company kind of got us idea for building space-based data centers, Jason, because they were working on doing space-based power. And then they discovered that they were going to lose 95% of that power they generated in space, beaming the power down via microwaves to the earth. So they thought, well, all right, we're going to have power up in space. Let's put the data centers up there. They want to use large modular four kilometer by four kilometer solar arrays. And to cool it, back to your point about in-space cooling, they want to use these, they're building their own radiators, if you will, that are going to use black body radiation to get rid of the excess heat. And the CEO, Philip Johnson, told me that they need about, it's a one fourth as much space to do the heat dispersion than they need to collect the heat. So you can kind of, I think, glue it to the back of your solar panels and then have the heat go out that way. A lot of problems with this. They think that the biggest risk to this working is launch costs. So essentially, this company is a bet that SpaceX's Starship is going to not only get sorted out, but do lots and lots of trips up and down one last note from them, just based on my interview, there's two markets for this type of work. One is you're dead on getting data to and from the earth, processing in space and sending back down the results. But he also mentioned the CEO of StarCloud that there's a market in orbit for compute, which you can do via lasers between different satellites. So if you're, I don't know, Starlink and you want to figure out your next array movement, maybe you just call up an in orbit data center to do that very quickly without any disruption. So I love living in the present, man. It's great.

SPEAKER_01: Like we're talking about real data centers in space.

SPEAKER_02: It's so cool.

SPEAKER_00: I mean, how do we not have a base on the moon 55 years later? It seems like we should.

SPEAKER_04: And if you asked anybody who watched the moon landing, hey, when do you think we'll have a base on the moon? They'd be like, I don't know, 10 years, five years. I mean, we're going to go up every year now, right? And it's like, no, we're just never going to go back. It has no importance. I want to know what the hell's going on. And I hope I live long enough

SPEAKER_05: to understand something about the nature of the universe. I'm just curious. I'd like to know. YC,

SPEAKER_14: the video game. This is a find that we had a lot of fun with over here at the Twist offices. Jason, there's a new suite of online games called YC Arena. This was put together by a student. He goes by M-H-I-M-E-D 100 over on X. Based in Berlin, TechCrunch covered it. I played with one of these games in the pre-show period and I have my score. So I'm kind of curious, would you like to try to beat me live?

SPEAKER_44: Sure. Absolutely. I know exactly

SPEAKER_18: how the partners make decisions over there. I've talked to enough of them and I know the history of it. It's pretty straightforward and I will take this test. Now, this is based on the fact that if you search on YouTube, there's a ton of

SPEAKER_138: people just post their Y Combinator applications to YouTube and then they put the URL into the...

SPEAKER_14: Yes. There are eight games though, Jason. So there's a variety of things. I was going to have you do YC Guesser but it sounds like you want to play YC Partner Simulator and if you want to play and you're listening in YCArena.com but Jason,

SPEAKER_110: this is the one where they play the video and you say if they got accepted, right?

SPEAKER_143: That's this one right here. Let's give it a try. Okay, let's do it. All right, let's see. I'm listening in here. YC Partner Simulator start a game. A little louder.

SPEAKER_145: Hi, I'm Arun. We're the co-founder of The Badda. We've been friends since 2010 being dorm mates in college. Post-college we started this company called Wah Analytics which was a driving behavior analytics startup. We were invited to interview for the Y Combinator Summer 2017 batch. Okay. Just last month we exited Wah Analytics to a larger telematics player entering India.

SPEAKER_150: Okay, they're accepted. Okay, let's see what you got it right. Wrong call. Rejected. Oh, really?

David Friedberg: The reason I won't accept it before even hearing their next idea is three developers with an exit where I assume

SPEAKER_04: they're three developers. They look like developers or kind of acting like developers or dressed like developers and it's always at Y Combinator they want three people. They want two to be developers. They want multiple co-founders. They don't like idea people. They don't like pitchy people. They like hackers but they're also Indian

David Friedberg: and depending on what time period YC wasn't investing in India

SPEAKER_04: all that often and then they started doing more investing in India. Okay, so I'm 0 for 1. Let's do the next one.

SPEAKER_156: Hello, I'm the CEO of Yellow Waves.

SPEAKER_158: And I'm Daniel. I'm the CTO.

SPEAKER_156: And our product enables companies to optimize field profitability. We do this by connecting to their CRM system getting sales and revenue data and on the other side connecting to the operational system getting costs and resource data and using this data we analyze each deal to show its expected profitability the different costs and how they're allocated which enables our customers to optimize the profitability of each deal.

SPEAKER_159: Hmm, okay

David Friedberg: let's pause this one and oh it has the year there so this year is 2018 the application so this is critical.

SPEAKER_04: So in 2018 SaaS was hot and sales and CRM stuff pretty hot. This seems like a small idea. I think there is rally based on the accent I could be wrong

SPEAKER_18: and I'm going to say they accepted them. It's technical it's niche. Let's see.

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SPEAKER_04: Wrong again. So these might be both of these might be too niche the ideas well the first one I didn't even hear the idea but the second one it might have been

SPEAKER_157: too niche okay let's go next. Next pitch. Okay here we go.

SPEAKER_171: I'm Jose CEO and co-founder

SPEAKER_172: of The Mosted. Hi I'm Daniel and I'm the CMO and co-founder of The Mosted.

SPEAKER_174: Hello I'm Antonio Bernardino I'm co-founder and CTO at The Mosted.

SPEAKER_171: The Mosted is a news content social media platform where people can discover their favorite news and start conversations and events.

SPEAKER_176: No reject it's social no.

SPEAKER_14: There you go.

SPEAKER_176: Yeah definitely not.

SPEAKER_14: So what the point here though Jason is you can actually see historical YC pitches see if they got accepted or not and learn from them watching I got six right five wrong so roughly the same ratio that you did but it was fascinating to go back in time see what was hot then see how people present themselves see what worked and I gotta say it's a great learning experience for founders who want to get in there and work on their pitching why not just go see what worked and what did not I love it.

SPEAKER_38: Yeah it's it's fun you know there's a lot of like anti YC vibes on X right now

David Friedberg: it seems like there's a younger generation who finds them to be very establishment and I think it's because they are very established right they've been around now for 20 years so it is the establishment and there's

SPEAKER_18: so many people applying which means more and more people don't get accepted and their best advice to you is oh we'll wait six months and apply again it's terrible

SPEAKER_04: advice I mean it's great advice for them it's terrible advice for you as a founder if you get rejected forward your rejection and your application most importantly to YC at launch.co and my team will take a meeting with you and give us some feedback and see if it's right for our program I can tell you nobody when you get to a certain number of applications nobody can tell you the difference between the top 5% I could tell you like this is a top 10% a top 5% but amongst that 10% I couldn't tell you this one's number one this one's number 10 out of 10 companies you know out of the top and 100 you probably would see you know reasonable investors from these programs pick a similar top you know 5 or 6 of the top 10 would be the same but they're only accepting 1% Alex so when you're accepting 1% what they're doing is they're just looking for young people without families who are developers the more developers the better which means it's naturally going to skew more mail that doesn't mean they're hiring based on gender or they're accepting based on gender they're accepting based on developer or not the percentage of female developers I think is still

David Friedberg: under 10% right now is my guess that could be old data that I have have but it's roughly you know in that range not computer science graduates I'm talking about like developers working at a company and sometimes companies will mix in UX and product managers and designers into the development group to kind of make their numbers look better there's a lot of window dressing that occurs because people are under such DEI attacks Claude says about 20% I think that number is a little inflated but it could be 1 in 5 but what that means is they're going to be accepting 80% males now they will

SPEAKER_04: look for a female team member when they do their DEI stats because all these programs all these venture funds were under so much pressure to share their stats and I think to YC's credit Techstars they all shared their stats and they did yeah and the way they gamed it was

David Friedberg: is there a female founder on the team and you know I'm not

SPEAKER_18: saying gamed it but just the way they dealt with the criticism that it was overwhelmingly male is to just be like do you have a female founding team member and you know you can you find a lot of them that have you know oh the director of sales the CMO the growth hacker the you know design as if there are not gender differences in work like there are there are definitely careers that draw different groups of people doesn't mean that group of people can't do that career it just means there's a bias that people might pick different careers the end

SPEAKER_04: full stop but that's all over now in fact if you were to do this kind of DEI reporting and stuff like that you'd probably be advised not to do it and to tell everybody do not pick based on gender which I did from the beginning said don't pick anybody based on gender don't pick anybody based on race do not pick anybody based on age because I knew it was illegal

SPEAKER_18: to do that and you would get sued but you had a countervailing force which was well why is it so many white asian indian guys doing startups and I just make it based on merit

SPEAKER_189: the chips will fall where they will

SPEAKER_14: speaking of things in merit Jason let's talk about launch for a second you had a tweet that really caught my eye you called launch it's 35 launch patch 35 right now yeah yeah you called it the best accelerator class in launches history yeah which is I mean honestly I mean after 35 classes that's quite the claim

SPEAKER_108: so talk to me about what's going on here at home

SPEAKER_38: yeah I just think we're getting more applications I would say since all in started and became like a pop culture phenomenon it's tripled the number of applications and then we're now doing an explicit push to get to 50,000 applications a year well most weeks have no problem

SPEAKER_04: hitting 400 or 500 applications but I want to really get it to 1,000 a week now we want 1,000 quality applications a week and we do 100 meetings a week so we pretty consistently will do 100 first calls 15 20 minute calls the more calls you do the greater the chance that you're going to find a really outstanding company that is the nature of what we do in Silicon Valley and in the investing game so I'm just trying to get to 50,000 applications and then we stay in touch with folks and we have three ways to invest they can come to founding university if they're extremely early if they're in year zero they're not incorporated or they're recently incorporated they haven't finished their product accelerator if they have finished their product or close to finishing it maybe have a couple of customers and then the syndicate will do a direct investment maybe from our fund and then we have the syndicate will send out and have 50,000 applications that would be a pretty good number I think a pretty good balance and so that's why we're saying no to good companies we're saying no to great companies sometimes which means if we do accept you you're great to excellent in our estimation and what we try to do is just figure out will a seed fund or a venture fund lead around in this company either in this next round or in two rounds do they have that signaling and I've developed quite an expertise in knowing what the signal is product velocity deep

SPEAKER_18: understanding of customers a kick-ass team that really is inspired and hard working so when you find those things and then obviously the business model the go-to market strategy all those things will also matter but team product customer that little flywheel always wins and you the time and it's a very humbling hard business to be a venture capitalist you have these incredible moments where you know I wake up and my top two investments of all time Robinhood and Uber if you put the two share prices together at $250 and I hundred investments and then there's 400 investments after there will those other 400 investments turn into Decacorns possibly or you know Centurion I guess for a hundred billion dollar company I I

SPEAKER_138: get 200 billion dollar companies in my first 50 investments it's kind of crazy

SPEAKER_26: a

SPEAKER_18: centimillionaires is what they call people worth over a hundred billion yeah versus

SPEAKER_26: the pathetic and miserly decimillionaires they're so

SPEAKER_203: annoying I know

SPEAKER_26: they always think they deserve a parking spot unbelievable millionaires so brutal don't mock the home team over here Jason more work

SPEAKER_14: next up so I'm really glad you talked about the three things you do Angel University the accelerator and so forth because I found a really great question over on the startup subreddit and I think it's actually a great question to answer in this context so Jay first asked what do these investors want they say Jason they invest as early as possible that they're pre-seed investors but then the complaint was their first question is always what's your MRR or monthly recurring revenue and this person put out a really funny kind of like translation guide for venture speak no traction required means you need traction we invest in pre-seed really means we invest in seed stage companies that we're calling pre-seed and it goes on and on but you're talking about the companies that you're picking that are the highest caliber for both Angel you and also for launch accelerator so what is this person either missing or not fully understanding about what the

SPEAKER_38: has had previous success they will invest before the product is launched for everybody else you have to compete

SPEAKER_04: for those dollars so if an investor let's say a VC fund you know $300 million fund with five partners they each do they can each be on 10 boards right and there might be two or three funds in which means net they probably put 20 to 30 names in each or six investments per fund and then over two or three funds they might have 12 active board seats or 10 or maybe as high as 15 so that's 60 board meetings a year right if they're quarterly so keep that in perspective they're going to do one deal and if the fund is over three years that means they're doing a deal a year maybe one year they do two maybe another year they do one but they're not doing you know a deal a month like we're doing a deal a week two deals a week here because we're an

SPEAKER_38: accelerator and an incubator and it's very different so you're in competition with everybody else if you're an unknown group of founders first time founders the VCs probably got a line of people who have between 500,000 in annual revenue and 2 million who can't raise their series A and those people are really frustrated so as frustrated as you are when you hear oh yeah no we'll invest pre-revenue pre-launch the caveat to that is if the team is legendary if the team has had previous exits if the team you know has an incredible skill and they built the most absurd product in the world maybe and it means if we can't find anything else that's not a better bet so you are taking you know what's on the the

SPEAKER_04: website hey we invest pre-seed they probably have oh we invest when they have traction okay they probably do that the majority of time but you have to understand who they invest in pre-seed which is legendary founders with track records

SPEAKER_13: I'm trying to find the original news coverage of Brett Taylor's company Sierra that

SPEAKER_14: raised a bunch of money Jason right out of the gate as an example of how to get a lot of money early on even if you

SPEAKER_54: they have a new company you

David Friedberg: kind of obligated to say okay I'll see the new one

SPEAKER_120: oh because they made you money they're not expecting you to come back it would

SPEAKER_18: be rude to turn down you know if you were rule off and the founder of YouTube started a new pretty good evidence that you should unless it's a complete vanity project and even if it is a vanity

SPEAKER_04: project you're probably going to throw in $250 and you might say it's not in the funds thesis the

SPEAKER_14: not only because they just raised a $1 billion round at a $39 billion valuation but also because we talked about their use of

SPEAKER_108: their robots inside of a B&W plant where they are live in production where they are just about to become live in production we talked about the importance of not BSing your marketing but

SPEAKER_14: the CEO put a new video that I'm going to show you of their robot doing the thing we all thought it was going to do repetitive

SPEAKER_108: work inside of the B&W factory so Jason for the folks out there on the audio version tell them what's happening

SPEAKER_38: well you've got a robot at station with doors opening and closing and something being put in front of them for them to manipulate doesn't look particularly complicated but it does look incredibly smooth and it doesn't look like the robot is tethered but it obviously is in a controlled box and the big controversy in the Wall

SPEAKER_04: Street Journal story I'm not sure when that story was but maybe it was in 2024 I see there's a story with them for their funding round but I'm not sure if that's the BMW story

SPEAKER_38: anyway this BMW story came out maybe it was in the spring of this year because figure robotics

SPEAKER_18: April

SPEAKER_120: 2006 April 6 2025 so

SPEAKER_18: there the founder Brett is obviously very talented he has raised a ton of money and there have been realistic questions of how do you raise 675 million how do you raise a billion without having a product in market to our previous conversation well he's gone the non-traditional route in who is investing from according to tweets he tweeted you

SPEAKER_04: know he's got a different pool of investors they're obviously not valuation sensitive there's been a lot of criticism about SPVs special purpose vehicles which we do at the syndicate which is what angel list does and other folks we do it on early stage but these late stage ones people just take 10% of the money invested in other words they don't take carry so they're like you want to put $10 million into figure I'll do that for you I have an allocation they go to a bunch of rich people and 9 million goes into figure and a million goes into that SPV person's pocket and maybe the minimum check size is so they can get 10 or 20 times their money whereas retail investors might be happy to just be in

SPEAKER_18: SPV are insulted by this concept that there are what they consider hucksters out there running SPVs and running traffic between high net worth individuals or the dentist crowd and taking a VIG a percentage of the investment as opposed to being long-term partners with the company it feels transactional to them but founders get to choose and so do fancy themselves stock pickers and they want to pick I want to be in figure it's their right I want to be in SpaceX I

David Friedberg: the investment in something like figure or something like open AI and

SPEAKER_00: then you put it into the mag 7 I don't think you'll see much difference in 10 years

SPEAKER_14: no no yeah so at these high

SPEAKER_225: prices because entry price matters

SPEAKER_14: these low-cost index funds that people now have access to are such an amazing vehicle for wealth appreciation I don't think they get enough love but Jason Brett got back to you you asked him very specifically what's going on in this video and Brett responded just a few minutes ago actually this is the body shop production line metal parts are picked up and loaded into a fixture that then gets welded together on the other side so instead of having M&M

SPEAKER_55: and 8

SPEAKER_14: miles standing there with the stamping machine it's going to be our figure robot and you know in his original tweet he said they're doing this in 10

SPEAKER_116: hour shifts

SPEAKER_14: not

SPEAKER_116: bad

SPEAKER_04: yeah I mean that 10 hour shift is probably predicated on a human monitoring it

SPEAKER_26: I'm bullish but also I'm long term bullish short term uncertain about these companies I

SPEAKER_134: think if you raise a billion dollars

SPEAKER_18: and you're burning 100 million a year you have 10 years of runway so they can literally burn $10 million

SPEAKER_73: a month for 100 months let that sink in 10

SPEAKER_240: billion is a lot of money folks wow yes all right I mean it's

SPEAKER_04: let's say they were going to spend that money over a year they could spend $3 million per day that's a lot of money so I think that they have plenty of

SPEAKER_18: runway and so they're in no rush thanks for Brett for getting back to us appreciate that

SPEAKER_26: yeah come on the show anytime we would love Brett we'd love to have you on we have so

SPEAKER_14: many questions about robots other companies in the space of course Tesla's Optimus Agility Robotics Boston Dynamics Unitree Aptronic and the list Jason goes on and on and on billions of dollars invested space to watch

SPEAKER_18: all right I think figure will be one of the top three I think Optimus will be number one figure will be in the top three four five and then you got a lot of people in China working on this stuff so yeah there'll be a lot of low cost folks in

SPEAKER_133: China doing this

SPEAKER_14: all right next up on the docket Jason the benefits of on shoring you flagged an article from our friends over at the Wall Street Journal talking about how Sharpies the pen that everyone likes

SPEAKER_50: found a way to make their actual items more cheaply in the

SPEAKER_18: to onshore but the fact that it was able to be done cheaper in the US just led me to wonder why because the only cost difference I can think of is the shipping costs and the shipping cost for pens doesn't you know it's not like a very heavy object but it's a low margin it's got to be a low margin business and so I wondered if this was cap or not and if this was being done as Trump bait because Trump wants to on President Trump wants to onboard reshore and build factories here I could

SPEAKER_04: see people doing it to curry favor with the administration but I

David Friedberg: also the company seems to be a bit of a disaster their

SPEAKER_38: balance sheet people were commenting on that but what's the secret here why are they able to do this cheaper here

SPEAKER_26: so a lot of work so they started this project back in 2018 this is

SPEAKER_14: a facility in Maryville Tennessee a town that I'm not going to lie until this article I'd never heard of Jason but they've done a the two has yielded a workforce that has lower turnover and higher efficiency and so they're able to make products at a cost effective basis here in the United States I

SPEAKER_108: but I think that the thing that I want to show is just this picture from the journal and I

SPEAKER_265: love a good Sharpie I'll

SPEAKER_04: be totally honest I'm a Sharpie fan I love the brand I would Gorilla glue is

SPEAKER_138: available or Sharpies available I don't want to buy the Amazon basic I want to buy the real deal yeah it's because Sharpies

SPEAKER_14: are such a tremendous product but this picture here Jason from the Royal Street Journal I think shows exactly what you're saying this is a this shows a woman working on a robotic I'm going to guess ink supply line of some sort here and it's highly technical but it does show that you can with foresight time and investment you at a cost effective basis I think the difference is that it's hard like I bet this was not easy it's probably very easy to get manufacturing spun up in China where there's a lower cost of labor and they already have more industrial machines set up for this type of work but

SPEAKER_27: you can do it it's a will question not a how question I think

SPEAKER_38: yeah and if you think about people

SPEAKER_04: and then you get

SPEAKER_38: to sell it and take 95% of the profits and the person who made it is like marking it up 5% from their costs which business would you want to

David Friedberg: make on the average phone like if the versus what Apple makes Apple and I

SPEAKER_04: literally was explaining this to my 15 year old about how even though the phones are made in China or India or wherever all the profits reside here in America and so American workers like turning tiny screws and you know doing six days a

SPEAKER_271: Jason this

SPEAKER_14: is brutal so I'm on so Foxconn I'm on their latest monthly earnings report just gonna quote here gross profit margin operating profit margin and net profit margin were 6.3%

SPEAKER_50: 3.2% and 2.5% respectively which is exactly what I said I mean that's

SPEAKER_274: they make 5%

SPEAKER_276: something like that almost groceries that's almost groceries for some of the hardest work in the world well

SPEAKER_04: because if they don't make it they know they

SPEAKER_18: can't make it they can go to the one in Guangzhou you know it's like there's massive competition for this labor and you might be talking about making 10 million phones in which case if you're making 10 million phones and you're making $5 on each yeah it's a lot of money I mean if

SPEAKER_14: changing that's the interesting thing about the Chinese workforce is their past peak working age population similar things between Japan and so forth so I think when we think about the great investment and acceleration of robotics in Chinese manufacturing it's not only making things more efficient it's also I think fending off just having fewer bodies to of course is a well known global consulting group if you know McKinsey you know Deloitte they are a private company so you can't go look up their stock price but they did get in trouble over in Australia because they got caught using generative AI Jason to put together a report that they charged in senator Deborah O'Neill she says that Deloitte has a human intelligence problem the situation would be laughable if it wasn't so lamentable and then she said perhaps instead of a big consulting firm procurers would better off signing up for a chat GPT subscription

SPEAKER_279: I

SPEAKER_280: mean that that's what consultants are afraid of being replaced by an AI chat bot

SPEAKER_38: yeah what you're going to have to do I don't think that these firms are going to go

SPEAKER_04: away like Deloitte I think what they're going to do is they will start and they will have these tools you know deep research tools at their fingertips it'll

SPEAKER_38: present them a bunch of information then their job is world's knowledge isn't just available online and your job as a consultant was to collate that information and make sense of it well if the AI can collate not not just collate it but they can also make sense of it great if they do a reasonable enough job it's your job to check it and then start your work from that

SPEAKER_04: do like these videos what we see in these day of the life of videos where people are like then I got a matcha and then of course I went to yoga and then of course I went to the salad bar and then I met with my friends and we played foosball you ever

SPEAKER_82: I met with four founders then I ate lunch at my desk

SPEAKER_288: then I did a meeting with seven of my teammates to introduce founders to VCs to see if they can close around then I did four due diligence packages and then I collapsed at my desk and then

SPEAKER_44: back to work you know take a little walk for 15 minutes but like it doesn't need to be like you could do yoga after work I'm not against yoga but yoga at

SPEAKER_293: work

SPEAKER_26: yeah like what world do you think is Google

SPEAKER_14: in 2007 like like crazy also also pro tip if you have a great life and you're getting paid a lot of money to not do a lot of work shut up

SPEAKER_297: around and drink matcha lattes and get toasted bagels

SPEAKER_298: do you know what I would say in that situation I would tell everybody oh my gosh I have never had more work to do I

SPEAKER_04: high school and college all the way to when you're you know if you can get a job at like a place like McKinsey or Deloitte you're going to have to show your work and the way that's going to work is in a document they now have software in colleges where you write your paper and it doesn't let you cut and paste into journalists who were cutting and pasting other people's work pasting it into the document and then editing a bit and they would get caught and they'd be like are you guys dumb like literally just if you read in the wall street journal that BMW had the figure robot and they were testing it but they wasn't in production and then Brett said this on whatever just say it in your words and if you don't know how to say it in your own words you can just hit the speech to text button now say it out loud watch the

SPEAKER_67: if you can get that information in four minutes the other 56 minutes of the hour is you improving it yes find something

SPEAKER_50: to do people I now get to use chat GPT for a lot of small things and you know what that makes I'm able to do more things all right a better show more facts more answers the docket saying

SPEAKER_82: oh we'll get you that answer for the next show it's like

SPEAKER_14: create an awesome pitch deck that they want to show to you oh

SPEAKER_94: I would love to do that is this our twist pitch deck competition brought to you by gamma it is it is our pitch deck competition brought to you by gamma

SPEAKER_38: yes we're going to take pitches from 10 amazing startups and then I

SPEAKER_180: think we're going to invest in one of them yeah I believe that's the plan today we're going to have Ryan

SPEAKER_324: beautiful oh I can see by your background okay so

SPEAKER_38: we'll get to hear your pitch you're ready to go share your screen absolutely and we'll start your pitch in

SPEAKER_330: sure all righty here we go in search your time if it's okay

SPEAKER_38: now before we get started Ryan you

SPEAKER_324: amazing so when you came to founder university where were you at as an entrepreneur as a company I

SPEAKER_334: mean after going through founders university

SPEAKER_335: now being in the accelerator looking back at it it wasn't even a company before it became a company once we actually followed everything that we

SPEAKER_265: that important stuff you learn some of

SPEAKER_102: those tactical things and then getting a product to market obviously

SPEAKER_340: absolutely yeah hi I'm Ryan Yonelli CTO and co-founder of Next Visit AI we saw burnout by doing the charting so doctors can do the healing I spent years going to doctors seeking answers and ended up hours away from my death because my care was fragmented my providers were overloaded with paperwork alone one in four patient charts contain errors clinicians spend over three hours a day on charting and this leads to burnout I want you to meet Dr. Rathor before Next Visit he saw 16 patients a day was burnt out and had clinical errors now he sees 24 patients a day saves time and also saw 30% revenue increase here's how it works Dr. Rathor selects a deep insights into the patient chart when the patient leaves the chart is finished and the notes reviewed by Dr. Rathor then it's ready for billing it's fast EHR ready and HIPAA compliant since launch we've gained 311 users and 68 paying customers and our customers are addicted we have 1.6% churn 24% conversion and a near perfect MPS score we've scaled to $9,000 MRR since launch our CAC is $189 with a $1,700 LTV and our average revenue per user is $133 per month we're starting with behavioral health in most competitors are just scribes we're a complete platform that providers trust we provide real-time clinical decision support build accurate data and become irreplaceable I'm a full-stack engineer with 15 years of experience in enterprise environments my co-founder Dr. Rafiq is a psychiatrist with over 15 years of delivering

SPEAKER_335: patient care we're next visit AI we sell burnout by doing the charting so doctors can do the healing thank you

SPEAKER_342: unbelievable incredible I'll give a little golf clap here a little golf clap going that was perfect

SPEAKER_38: a perfect pitch you explained exactly what the problem was you explained what the solution is and the opportunity in terms of the total addressable market and why you are uniquely and your partner

SPEAKER_04: who's a psychiatrist are uniquely qualified to do this so this is as close to a perfect pitch as you can get if I were to score it maybe 8.5 out of

SPEAKER_18: 8.59 and 9.5 would be the three choices I think making sure people understand this is for psychiatrists and psychiatry and that you're very focused on that because listen it's only a two minute pitch is what we gave you so you can't get to everything in a longer pitch obviously you would get into competition and the niche but as close as you can get to a perfect pitch and I

SPEAKER_04: what are we talking about here we're talking about almost $1,500 per year per doctor they use it for five years $7,500 those doctors make a half million dollars a year

SPEAKER_38: so you're only you're not even charging 1% of their total billable value what do they bill

SPEAKER_328: out a year a million dollars two million I know

SPEAKER_335: from just our statistics that they can bill an extra probably $1,500 a day once they start using us which is

SPEAKER_55: you have to charge more my wife is a practicing psychiatrist oh bro Ryan you could like I was on your site before so I looked into this this is what I was going to say Jason is $199 a month for unlimited notes for your provider plus plan is just too small not only can psychiatrists afford it themselves if they're in private practice but if you tell a hospital they can get 30% more patients through one of they're rare hard to get providers especially if they're a child psychiatrist man that's worth two zeros more per month than you're yeah and I

SPEAKER_38: think the way to frame it is this is either another professional doing this so this is your billing slash note taker it's like a it's a it's a salaried person so it's $20,000 a year equivalent or something or to do it per record or to do it per billing and so there's consumption

SPEAKER_04: based pricing which you might want to experiment with at some time which is hey every time you do one of these it's 10 bucks and it's like what is an average visit $500 so that's not even for $1,000 it's not even 1% of $1,000 visit so it might be that consumption based pricing would be better here either way

SPEAKER_18: if you're undercharging for it now that means that's why your conversion

SPEAKER_04: rate is so high what are you converting right now Ryan in terms of from a demo to a purchase

SPEAKER_340: it's a

SPEAKER_335: very

SPEAKER_340: you know

SPEAKER_335: fluctuates a lot right now because last month we had a huge uptick in users probably 300 new users and what we're seeing is like now just this week they're starting to actually start paying for it

SPEAKER_04: so it's hard to know early in a startup so this is where you're this is like a next card you have to turn over as a poker game you've seen the

SPEAKER_18: flop but the turn is going to tell you your conversion data get a lot more information on that turn card because 80% of the information is now on the board there's only 20% left to come that's going to be really important for you to understand is you know of this source could be a conference could be a referral could be an insurance partner asking people to

SPEAKER_04: I would say you do the demo with them and then at the end of it say can I have your credit card and sign you up right now

SPEAKER_38: we'd love to sign you up right now can I get your credit card number I'll put it in it's only

SPEAKER_04: founder he got that knowledge and when he onboarded me as one of the first users and the first investor he said okay and now that you've seen it I'll take you would you like me to sign you up yeah of course I so for a CTO you're a gifted natural presenter

SPEAKER_67: did you ever do a little summer stock or something were you in the poetry slam contest what's the story Ryan

SPEAKER_355: no I actually wasn't sure I

SPEAKER_18: that we call that founder product fit or founder market fit you really love the market and you're engaged and that comes through in a presentation you can tell if somebody is faking it any questions for us any way we can be helpful or any questions about how the business is going I

SPEAKER_355: mean I would just ask if you were me you know what would you just obsessively focus on right now

SPEAKER_18: okay product and customer are probably the most important thing right now so that you have you want to have very low churn because keeping a

SPEAKER_04: on board them as you probably learned so checking in with the people who aren't using it figuring out why figuring out oh do they need an onboarding in person or are they fine doing it over zoom you know there could be all kinds of different factors but really studying the churn data and the engagement data you can't go wrong so look at that engagement data how are they using it how often are they using it did they do 10 meetings today and not use it what happened was it they didn't like having their laptop out okay maybe they

SPEAKER_38: there's going to be little nuances

SPEAKER_18: like that you could never go wrong studying the engagement data and watching a customer use your product so that's where I

SPEAKER_04: absolutely it is the bane of their existence it's like for sales people like updating the CRM they're like I'm a good sales person why do I have

SPEAKER_18: Gamma where

SPEAKER_138: how can they learn more about Gamma

SPEAKER_14: if you're feeling inspired my friends head to gamma.app and start working on an idea of your own and maybe we'll see you here on a future episode of This Week in Startups we do it Mondays and Wednesdays and Fridays Jason there's always more twist on the

SPEAKER_18: Wednesday October 8th go to youtube.com search for This Week in Startups and

SPEAKER_157: click subscribe hit the bell get all the notifications so you can talk to us live we'll see you next time thanks Alex

SPEAKER_381: thanks Jason bye everybody