I think it is worth talking about the fact that there are ways to make a million bucks and then like ways to make a million bucks That could turn into a billion bucks, right?
And I think we should talk about both.
Oh, are we ever do we hit record already?
Yeah, that's the intro.
All right So what do you mean by that you saying there's ways to make a million bucks and then there's ways to make a million bucks That could turn into a billion bucks you have my interest.
Let's go. Okay. Okay. Let's go So I think maybe and I don't mean this any dismissive way I think venture capitalists are very often accused of dismissing something as like a cash flow lifestyle business or whatever right or Which by the way for anyone who is not in the VC world You go to a VC you say I've got this great company.
I think it can make five million in profit in year eight I then after that maybe we can grow this for another 50 years and one day could be a thing and they say That's that's a really nice lifestyle business.
It's like them saying that's cute.
Right. I remember that's cute Yeah, I remember my first time doing that of course The thing is is that anyone who actually is an entrepreneur including anyone who's a VC They know that you can oftentimes get richer and have a less stressful life if you have a quote lifestyle business Yeah, so I'd say like there's many type of valid businesses Right, and then also a lot
of things that have become very interesting start very small.
So I want to recognize that but I Think a reasonable analogy is if you can figure out internet distribution and then get you know Superpower for models getting increasingly powerful to just do something useful and a niche those two things together That's like the new dropship, you know how like for maybe seven or eight years I'm like too old to know what the exact
timeline was but there was a period of time where people are like Oh, you know, I'm an internet kid.
I'm gonna forget some dropshipping thing and like make my first hundred thousand dollars I think this is it yes So so basically for people who don't don't really know you could go on a libaba or all the express That was like the open AI in this case, right?
So it was like this thing exists that you didn't have to build But it's magic watch this you can push a button you never had to make the product you never had to warehouse the product Never have to ship the product it will just magically appear at your customers door, you know somewhere between one and three weeks later All you have to do is the marketing bit and kind of what you're
saying is Open AI and the other AI companies have built this magic that basically will take piece of text and turn you into a video or a song or whatever And if you just do the marketing bit You can actually almost like dropship of product or a service to the customer without having to make it yourself Is that the idea that that is thanks for explaining it and I think it's
like easy with easier with a few examples Right like copy editing is probably a prototypical one, right?
You can do not amazing, but like reasonable Copy generation with these models today and so there are series of companies where you just have some templates that make it more obvious to somebody Writing marketing copy how to use these models and then you have a website with decent SEO and then like you add some stripe Integration and you're in business.
What's an example? Well, I think like copy AI and Jasper these companies started this way right and then I have several Friends who shipped like AI companionship apps just look at you know pay to apps in the apps store by charting and you know Some of those people are generating a million dollars for cash flow for themselves.
It's not because they're deep AI people All right, let's take a quick break.
I gotta tell you ever seen those Coachella posters where it's got all the artists names And you're like, oh my god.
Wow. They got you know friend again and screw X and this that's what the HubSpot inbound conference looks like Just listen to the speaker list that they have.
I don't know how they pull this off but look listen to this Ryan Reynolds Serena Williams Cara Swisher Matt Wolf Darmesh they got Brian Halligan.
They got tons of good speakers at HubSpots inbound It's coming up.
It's September 18th to the 20th.
It's live in Boston and it's where you go if you want to learn Marketing sales AI trends you want to know where the puck is going so that you can be there before Everybody else tons of great talks on stage where you're gonna learn sales strategies improving marketing tactics But also the networking where you get to meet other people and understand what are other people
in the industry doing How are other people getting ahead so check it out go to inbound dot com to see the lineup and grab your tickets today When you say companion you mean like a digital girlfriend or boyfriend, right?
I think people think that is skewed toward girlfriend way that's not necessarily true We do and you know you can have your own ethical points of view about like whether or not that's good for people But it's a pretty basic human need and guess what people want all sorts of different things in terms of niche Companion ship and how you might distribute that and aren't
these quietly very huge like can we do some like Ballpark, you know give people a sense of the size and scale that these have gotten to so there's There's replica.
I think that's probably the most well-known one Which is a digital boyfriend a girlfriend They kind of try to say friend, but I think the use case is a little bit more in the in the relationship side of things And I don't I don't remember their exact numbers But I don't think I would be crazy for saying they're doing like 50 million a year in revenue And I believe she had
bootstrapped it for a while at least or raised very little money to get there Is that right?
Tell me if I'm off base. I might be wrong on some of that.
Yeah, Eugenius built a very cash efficient business Okay, is that like code for something are you an investor?
I'm not an investor You just send everything without saying a thing it was basically like your friends with their you know the number and they're killing it Are they killing it from your perspective?
I think they are making a lot more revenue than most startups Um, I don't think it's fair for me to give the number.
It's not my number, right?
Okay, what are the other ones that are interesting?
So there's character AI that has like some absurd amount of Traffic but I've also heard some things about like I don't know if this is all legit traffic or what but there's character AI What are the other ones that are interesting or what do you what do you I want to touch on character for a second?
Because I think like you know when you look at consumer companies one of the things that I learned was that The behavior patterns like when something just really really stands out from All other products in their category or previous categories.
That's when you pay attention It's like the you know dumbest metric, but it is really clear When something has special consumer behavior around and the thing that is really interesting to me about character or the companion apps that work really well Is like people spend hours with them Right like you know in terms of the number of products like how many products
you spend hours with every day Not a lot like social media Sean that's like my product that I spend hours a day with Yeah You were a great like I think when they invested in discord I think the timings there and discord was one of those things that was probably overlooked because it was like You know mostly teenagers who play video games that were using this thing and it
kind of looked like a chat room But you're like well, how's it gonna make money?
It's not like slack where you can charge the company But the stat was people were spending like seven hours a day or something on discord something ridiculous like that Just living in discord.
It was their social life and so you're like well There's there's something there and they were able to make a ton of money just even selling emojis at that point because if you have that much engagement You can't fake that yes, by the way, I just went to character AI and there's an option to chat with Elon Musk And the preloaded question why did you buy Twitter?
So I click it so it starts a chat with Elon Musk as a character And then it's the first one literally goes you are wasting my time.
I literally ruled the world Okay, so by the way on according to similar web which is like You multiply it by two or three and then you divide by two or three and that's the huge range But according to similar web it says that character AI has 310 million monthly uniques Are you kidding me?
I mean, that's more than the Wall Street Journal.
It's more than like a bunch of really fun thing Is this company really that big?
I think people want companions This is what I'm saying that the the like engagement characteristics around this stuff is real And so for anybody like starting a new business, you know one person company shipping AI companion up to Anish like generating a million dollars of cash flow From the south of the field Do you know how these things grow?
So I mean 300 million monthly visits is no joke What is what's the growth channel for something like this?
Well, I think that's going to be like an advantage in the future I do think one of the weird things about these AI capabilities is they are so novel and unique that they do drive word of mouth For example with character you can make new characters and people share them right?
So there's inbuilt virality There um, but like maybe I'll give you like two other examples of just like when I say the capabilities are just really new And they're powerful and people want to talk about them like I don't think you can engineer that but it's just characteristic of these companies Okay, so one example is I am an investor in a company called hey Jen You
can make a video avatar of yourself you cannot tell the difference and you know reaching that bar of quality is new as of this past year And like people create content that is unbelievable and they share it and so like Now hey Jen is in tens of millions of revenue great.
They've never spent a dollar on like paid marketing Sam have you seen this thing before by the way, hey Jen?
This is one of those products that I've seen all over the place, but it felt like it was just like people younger than me talking about it So I felt embarrassed.
Well, this is not like like the character AI was like, you know That's like teenagers kind of sharing stuff some more like what pad or something This is a corporate use case So this is basically using like I make a digital AI of me or of a or or just like a fake character altogether And then it can be used in training videos It can be used in intro videos with customers things
like that so you could basically create a You don't have to actually send up a camera film a video have it edited and then post it in order to send a video to a prospect or send a video internally To in the training system or educational product And so that's what this is and that's why they It just says the top raised 60 million in funding But I think the the chart I saw was pretty
absurd that you know They basically raised a 20 million in ARR very very fast holy crap Some of the usage actually also it yes, it's a business use case But it's like all kinds of businesses like creators SMB's like high-end enterprise advertisers And so like for you guys to be like okay, well like actually I bet there's a lot more demand for Sean and Sam talking than the amount.
I'm sure you hang out on the pot a lot But like then even each of you Can contribute and so if the marginal cost of more time of Sam talking is free like you probably do more with it Right, I think that's just what people are discovering have you guys use this is it the landing page makes it look amazing Like I used it.
Is it amazing or is it still up and coming?
No, it's like pretty good this this cross this one crosses the line I would say of Usable in real life versus cool demo, which is the hard thing with AI You get a lot of cool demos then you go in and you're trying to use it for your use case And you're like how come the tweet had such a good output of a mining kind of whack every single time or like Well, this is good, but it won't
let me change the text on it, which is what I would need to use it in my my real thing I would say this one is is Definitely production ready.
They wouldn't have you know 10 to millions in revenue if they weren't actually use a lot of customers Well, they just did like a public campaign with me's donalds right like an advertiser But there's some good limits right like you can't be like moving around It's like a face-on camera at least that's what it used to be when I tried it like six months ago Yeah, there's
some new stuff you should try like you know you can be walking around now Oh, okay, I stay corrected All right, ever back Can they just can we just upload our youtube page or do we have to stand in front of it and film?
Um, you have to stand in front of your web or phone camera for two minutes and film and it's more of a safety thing than anything else Because they don't want people being able to take your youtube and make you if that makes sense like they want They want you saying specific words about like I sam par say it's okay to make this avatar And you said that you started the podcast
by saying there's like a lot of you had a really you the line You said was awesome, which is like there's a bunch of ways to make a million dollars that could eventually become a billion Is this one of those companies where it started that way?
Uh, I think I mean I think the market for this company is very deep because people like they want a lot of video And I think more like if you just think about the domain of making video you guys know much more about this than me But like people want a lot of control right they want Quality they want specific expression and brand and motions and they want like one person two
people three people like person walking around product whatever it is And so I think there's actually a lot like there's a lot we still cannot do with research and this is the company wants to continually pull Like push the bounds of what you can do and so I think this is a good example of like I think there's a billion dollars of video generation revenue For them or for others,
but like you know you actually have to invest in the product pretty deeply But it doesn't mean that your wedge can't be really powerful across the single use case Sam have you seen the ones that do this for D to C products the AI for D to C product ads so go to icon.me If you scroll down you can watch the video so see the video of the asian dude who's holding like a college and peptides
thing So that's a AI generated video It's the product in his hand that's not actually in his hand with a script that was written he never recorded it And now you have a ugc very authentic looking ad for an influencer you go to the next one look He's holding a different product that's because he didn't re-shoot it They just put a different product in his hand and it looks
super fucking real am I right what is in this wild Well, this is amazing and so he's got another one with ramen and so what he's doing is interesting what he's doing is he's Letting actual and so these are not AI generate people.
This is a real person This is like an Instagram guy who's got like whatever hundreds of thousands of followers So he's letting popular Instagram people say hmm.
Okay. I'll do it. I'll create my my digital twin That will be able to do my brand like my brand of content so a brand can come in request from a let's say an Instagrammer with a million followers and say I want you to sponsor this video here's the script here's my product And if I click yes, then it will AI generate that video.
I never needed to like Open up a package grab a thing You know take take 20 minutes set up my tripod record and add send it to the brand ask them if it's okay Then they say yes, and then I get paid instead of this case It's basically like I just approved the brand it uses my digital twin to make the ad if I'm cool with the ad I get paid and that's it And so that's what he's doing
arcades is the same thing if you go to arcades It's like pretty fucking wild and it and their case these are fake actors So these women that you see on the thing that are like promoting stuff These people do not exist That this is an AI generated woman who looks like a real person that is promoting some product And you script it and you can you know get these made I these
are the or or it might be like a real person But they said like license to the company you can do whatever you want with it.
Yeah, exactly I think in this case they they might have started with a couple of those like I think they found one of the girls from this like on fiber or something Um, but the idea would be I don't know too much about the under under the hood stuff of these I just started playing with them, but the idea would be that you know People are not gonna know what the hell's really
what's not this these look like real people in their home giving a genuine endorsement of some product that they like And it is very simple to create.
I think Sarah this is the type of idea you're talking about where Two people can kind of take the existing models You know, maybe customize them Uh here, but then it's just in a wedge in this case it's for e-commerce companies And they're gonna try to build a business here that will do it'll be these both these businesses very quick to get to You know mid-seven figures
of revenue Uh without you know much marketing spend or much of anything just because the product is such a wild product And then you know from there who knows if it can get you know really enormous or or not Yeah, and I think a piece of it is just like for for me and like okay, what's the difference between like the first million and the next 999 million it is whether or not the capability
exists in the company to Make the product deeper and keep expanding scope for what you do for your customer right and but there's a ton of these wedges so Is staying with visual content Uh, you can use this category of models their open source To be fine tuned for different use cases that are super commercial right so it could be Models or creator videos for e-com as
you describe it could be renderings for like interior design or buildings I don't know if you guys have ever looked at a floor plan Like maybe I just have terrible visual spatial reasoning But I can't look at a floor plan with like a couple blocks and then like a fuzzy piece of fabric and be like Yes, I see it I'll put my life savings into this and our friend Peter levels
has a thing where you take a picture of your home And then it Does interior design for you and shows you mock up, which is pretty cool Yeah, but but I'd say like those you know those renderings traditionally generated cost like thousands of dollars Right, and now if you can give it to people for very little and incremental costs like that's an interesting wedge like
there's a handful of um, AI headshot companies making revenue if you guys have ever gone like a professional headshot taken Yeah, dude, I so this actually this is like a kind of actually interesting Version of the drop shipping idea.
So these are this is I bet you this would work So there was an ad I saw on Facebook I think it was a Facebook ad and it basically was a guy And he had a headshot I think of somebody who I recognize maybe is a VC in Silicon Valley but they said like If you're in San Francisco I take awesome headshots for you you should have a great shot for your website for your LinkedIn whatever
It's good for business.
Good for your career and you click a site and it's a bunch of people the tech industry and It was like 300 or 400 dollars and I went to some warehouse this type of place in some some little like photo shoot studio in San Francisco stood there awkwardly got like headshots made and Payed this guy you know three or fifty bucks and he was running Facebook ads profitably to
do that So he was able to put in and it used acquiring a customer for whatever 70 bucks I mean he's generating 350 bucks off them and Now you could run that same funnel Just without the San Francisco studio and without the guy taking the picture and without any of the cost right like you just say Awesome give me a couple of your photos and then boom here you go And I've seen a couple
these go viral of like viral headshot viral your book ideas But I haven't seen too many people just like running paid on them and making them work But I'm pretty sure that you could create a paid funnel that would print cash for a period of time and maybe not forever But an arbitrage period of time.
Yeah, but what's the what's it exactly?
So I've seen the same ones where it's like you look like a 80s glam shot model I think the the professional one people are willing to pay more right?
So if it's it's actually gonna be for your what's an example of one?
Yeah, look look at this look at this company airgon.ai.
Oh, dude. Look at this landing page.
This is genius They just have a side scrolling carousel and it's the before's and then there's a line And then they just that same photo becomes the after that is very well done That's good Uh, Sarah how hard is something like this to make so like there are a million of these wedges right and I think that means like it's an amazing time to as you were saying like Be good
at distribution understand like how to make a funnel and how to market something And like to be an idea person right fundamentally like if you run into problems all the time And you like see the basic capabilities.
You're like, oh, I can think like you guys are both like oh I can think of like five other use cases for this right and by the way Well, you know the distribution thing.
So this is a good example the so I invested a little bit in Jasper and Jasper was started by guys who were Internet marketers first not AI researchers not AI, you know, engineers not not even frankly very good engineers probably they were just like Internet guys internet internet business guys and they were I think they were doing something before this that wasn't
really working very well But they had spent a lot of time building like internet marketing funnels and so when they got access to probably Chat GPT 3 or something like that they they were kind of back before or sorry before chat GPT just when it was GPT 3 They got access to the API and they built Jasper which was a Took that same capability, but now made it useful for marketers
So if you're a marketer you need a blog post written or an email or you needed um, you know copy written for an ad whatever it was They just made a stand on tool that would do that under the hood.
It's you know The opening-eye model is doing 80 90% of the work.
They've maybe customized the last last mile of it But they were so good at internet marketing that they started running Facebook ads on this thing And it's the fastest company I've ever seen get to 50 million an AR they got to 50 million AR in one year which is To go from zero to 50 million in revenue in one year is just absurd And the way the reason they were able to do that is because their
background as internet marketers as guys were like as soon as I have anything that works I will just plow the maximum amount of cash into Facebook as as I can and I will just keep optimizing the ads until I get this thing You know a dollar and equals a dollar 50 out or a dollar and get equals two dollars out And that's why they were able to be so successful early on because they
had a different skill set than most of the Silicon Valley people most But Silicon Valley don't ever run paid ads Mm-hmm.
That's just like a pretty crazy thing Mm-hmm I think like if we just go to the difference then like a challenge for anyone of these companies that gets this wedge and like is rare to see zero to 50 in one year That's pretty special, but even if you get like a product to hit in terms of initial adoption Then I think the like the the next 999 million of revenue has to be like
I think more traditional modes um Because the problem is if it was I'm not saying the distribution piece was easy But let's say you were just first with an idea And like you hit it on Reddit because it's a novel capability Uh, like I think then you need to get to traditional like Reasons companies get really big product velocity depth of product ability to serve the customer
or social engagement or something Right, so like if you think about companions um It could be like what are the arguments for like why somebody gets to dominate that that business um There's a version of a companion business or any business with paid spend and you know this really well that is like just a treadmill Right like I make money, but I have to keep putting
money in it's the opposite of compounding um And if I like stop working hard or other people compete with me like the tribunal gets deeper or I fall off And I think one simple answer is on companions.
Do you guys ever play the Sims growing up?
Of course Sure like it's very hard for me to not imagine the Sims better if the characters are like smarter and like richer in interaction and have like what looks like realistic video and voice um And so like technically instead of it just being like I'm talking to a person it could be you know That person has some combination of memory of me other interactions goals
and like the media experience of them is richer And we haven't gone there yet, but I think like there's a version of that company that's somewhere between like a companion And a game world that will be very big.
It's kind of an interesting exercise Well, if I could just get to a million then I've increased my likelihood and then maybe I can get that to 10 and then a hundred and then a billion I actually firmly believe that if if something can scale to 10 million They're you know, it may take a while But if it can get to 10 it can almost always get to 100 like there's enough people
in the world to to make that work But it's actually an interesting exercise to think of all the things that you need to do in order to make those jumps Now getting it to a billion.
I would actually that's been that's been hard for me to figure out how to do that But that's a fun exercise to think well if I can just get to a million I bet you I can get to 10 and if I get to 10 I know for a fact I can get to a hundred Yeah, by the way the Sims lifetime sales $5 billion so Without AI the Sims was able to get to 5 billion in sales if you made it more engaging by by AI
powering all those characters That's gonna be even stickier It's gonna be a big business, right?
Um, hey Sarah. Why dude you're like pretty in the know.
Fuck this fun thing Like why don't you just go do this?
The sounds may be awesome It's gonna make one the sounds way more fun than investing in it Um, I get to I like really like doing the zero to one thing Repiatedly, right and and so I think you just have to figure out what you're motivated by I uh, I'm really motivated by working with people That are entrepreneurs that I like and respect and I think are super special and I
do not like working with people that That I don't have as much enthusiasm about right That's like a very specific personality trait and like law of large numbers as soon as you manage very large teams Not everybody is gonna be at the same level Um, and so like doing investing like and making Being able to contribute to other people being successful that are really
special and then the competitive nature of Be right with skin in the game and then know what is happening like I like all of that But I you know never say never I did we we incubate companies were like it's essentially like uh I see it.
I see it. I see it and then there's frustration that like the right You know a set of people you're really excited to back just hasn't come together around a certain idea Sean you are more technical than me, but you're still not technical up I would say but you're more than me uh, but a sandpark classic compliment.
Thank you very much You're not technical you're more technical than me, but you're also not technical you're almost good looking You're out of the me, but I'm a one year a three Uh Did you uh when you're I know you've been like studying this stuff when you like this seems like a really fun weekend thing Just to play with are these actually would it be really hard for me
to learn how to do this Would it be hard to build one of these just like a really simple project because I now she's Sayers get me all hyped on this shit.
I'm like this looks really fun to to mess around with yeah I mean, I think it's like anything else you got it you'd have to have a partner who just beat you up like you learning to To code to be able to to do these things It would be slow the slow way of doing it versus the easy way is you find an engineer who's excited about this It doesn't have clarity of vision around it.
Maybe it doesn't have a doesn't want to run the business side of things and you say great Hey, let's let's build X together.
I have a clear idea that X will work and I'll handle the market inside You got to make this product do do this and um that's not so hard.
That's that's pretty easy This is exciting uh, you get to see a lot of cool shit.
Let's uh, let's do some of your like specific kind of thesis So you have this website conviction.com good website by the way.
How'd you get that domain?
I'm an internet person.
Yeah, okay, or did you see her website?
She has a website for her Uh, I think it's the incubator where you got to like code in order to get access it You don't really code but like the menu is set up like that.
It's a little let's let's yeah, it's a little CLI What's what's that URL?
Um, I think it was called commit.
It was like our program for like hackathons college students, etc.
Yeah, it's commit.conviction.com Sean.
It's a pretty cool website actually.
Oh, you open up It's a terminal.
Yeah. Oh god. Uh, let me see.
Let me try to do this so run No I'm gonna type in help Yeah, so if you type in help it like gives you the menu anyway, it's like a folder.
I don't know. I don't know how to do this Um, all right, so you have a website with a bunch of uh, basically like request for startups or you know things that you think are gonna Gonna be built in in uh in AI.
So let's run through some of these because I that's actually why initially was like we got to have around the pod to kind of Um, to talk some of these out.
So let's do one that's you call your personal seller.
Do you remember this? You might have wrote this a while but while back but your personal seller it might have been one like my partner Prana of Reddys or something but we can certainly talk about it.
Yeah. Okay. I'll give you the summary.
So the summary is Uh, your personal seller.
I think the idea here is that there's a bunch of places online to sell stuff at C and ebay and amazon I have a bunch of different places to sell things um, but actually like doing that is a bunch of work like creating the store listings changing prices writing the copy all of that and I think what you're saying is Somebody should be able to just like have a product and then
the AI should be able to like do the actual Ecom management of the of the of setting up the shop and running it.
Is that what that means?
Yeah, I think like um, it's probably it matches like a larger theme that I really think is exciting about AI Which is like because all of these skills and it could be um, run a basic like social marketing campaign Right or like send email to your customers that are likely to be repeat customers or Improve your website for indexing like there are a bunch of things that um
are probably not related to let's say it's a Let's say it's a Shopify drop shipping store for like a particular type of sock and you love socks as an entrepreneur It's not like related to the merchant dicing decision or the design decision of like what is the sock?
I want to give the world right and like that's kind of the essence of like why like sometimes people become entrepreneurs And so can you can you take a bunch of these tasks that require skills and all these different domains and just Automate them at least at a basic level like I think you can now, right?
And I think like that they're the platforms Shopify and and square etc.
They're they like you know, they now have native assistant products that help you use the platforms better But I think across the spectrum of how to be a good Internet entrepreneur like in the e-commerce sense that I think there's more opportunity there Um, how do companies do that now?
So let's just say you're a company with 10,000 skews Um, how do you get accurate descriptions for all of them?
Well usually if you have 10,000 skews you have like it's a titty of like you don't have 10,000 unique Uh, totally variant yeah, but you could have like Call our five-funders eyes variants things like that.
So like I'll give you uh, I'll tell you in our case, right?
So I have a e-commerce store and we had we spend Let's see probably like five or six grand a month on just Shopify per plus or whatever like the pre enterprise Shopify thing So that's just the Shopify cost on top of that.
I would say we probably have another Um three to five grand a month on Shopify apps.
So you need an app for search.
You need an app for uh bundles You need an app for this that you know, there's a ton of things that Shopify doesn't provide So my all-in just software cost is at least 10 grand a month probably a little bit more on top of the fees they take of every transaction Then I have an e-commerce store manager his job is just to like run the store like the we have new products coming
up Make sure those launches go well move things around.
Oh, this is broken. There's a bug whatever We then have a merchandiser the merchandiser goes every day looks at the collections and says This thing is sold out.
It shouldn't be at the top anymore.
We don't have sizes for this or we don't have colors for this So let me move this other thing to the top or hey the season just ended these need to be rearranged So there's a human being that does that there's also apps that do that But you kind of need the app plus the software today because the apps not quite good enough to do it by itself We then have VA's that go in and they
do all the product pages the descriptions the templates the tagging so that our inventory data is correct because we need to be able to analyze our inventory to do that You need to tag every product accurately So there is like four or five people that are just making sure the store runs in addition to Five apps that make the store run that all today is Shouldn't be the lead
like future state of things.
That's just the current state of things And and Sean I think the future state is for entrepreneurs who cannot recruit manage pay the five people It takes to run your store like what do they do as Sam said like I think it will be easier in the future Yeah I think this is also kind of like similar as an idea to all of the another area that we are and I'm like personally really
interested in is The voice automation market.
I think like a lot of your listeners will have seen the GPT-40 demo Where it's like a voice that may or may not sound like scar Jo talking like in real time Well, we play with 11 labs No, but that's dubbing she's talking about just being able to like Alexa you just talk to it and um It just talks back and it'll sound like scarlet Johansson just like chat GPT, but you don't
have to type Yeah, but both of these things either like it could be in your voice or like some spokesperson for a brand or a company But like the ability to give reasoned you know knowledge-based responses in a human voice I think it's just really powerful, right?
And I don't think people are thinking enough about the opportunities here where you mentioned 11 There's like exactly one independent voice API business and tens of millions of revenue and that's 11 They're great.
That's amazing. I think there are other opportunities So like there's company called Cartija that does like more real-time voice for example You think 11 is by the way 11 labs you think they're at tens of millions of in revenue Uh, they are they're definitely at you know a large number that is in the tens of millions of revenue Hopefully I'm not surprising surprising
a market with that But you know a lot of developers are immediately gravitated like toward API business But that is not how the rest like the world is full of niches and people running businesses They don't think about APIs and won't use them right and so like just you just like you know your personal seller I think they're going to be a bunch of interesting voice services
for everything from restaurants to HVAC companies to dental reception that are just like answer the phone I think that's one of the ideas we had And it could be informational like we are open from 8 a.m.
To six p.m. Um or a lead generation business where I'm like well like my plumbing broke and like are you available tomorrow at three p.m I'm a huge believer in this huge like I want Sean this this simple idea So you know like when the when the internet came out it was like um Oh, it's going to be so crazy But like one of the obvious things was like hey every restaurant just
kind of needs their menu online like you should put your You should put your restaurant exists where it's located and then put your menu up there even as a pdf That's still like value ad for you.
It's like it became where every business needed a website And now what I think it's going to have is that every business needs an agent And so what's the agent for most small businesses?
So like I call pest control because we always get a bunch of like mice jumping in our pool for whatever reason And try calling pest control nobody ever picks up the damn phone And because there's usually it's usually run by like it's like Mike's pest control and Mike's out in the field doing things all day Controlling the pack actually doing work and so he doesn't pick
up the phone And so then you leave a message and you're like you and then but you call ten of them because You're not sure if Mike's gonna get back to you So then it becomes whoever gets back to you first Mike loses a business because Mike doesn't pick up the phone Mike also is not gonna hire somebody to just sit there and wait for the three phone calls a day that he's gonna get
It just wouldn't make sense But now you go and I built one of these in our like AI Like like weekly tutoring session that I have basically I was like I want to build one of these so We have the same problem for our offshore recruiting business So we own a offshore recruiting business called somewhere and it's like you can fire you can find an amazing talent They're just
somewhere out in the world.
You just have to find them.
So what somewhere does they find you a elite talent Now the big problem if you go to somewhere calm.
It's like You say okay, I'm looking for a designer or I need somebody who could do who get me leads for my marketing business from my real estate business Or I need somebody to do a data entry right?
So you have all these jobs Now the button on the site is basically like you want to start hiring fill out this form So you fill out the form and then it's like awesome.
We will get back to you soon Or it's like schedule a call.
Here's the call tomorrow or two days from now and no matter how many sales agents we have A call tomorrow is not as good as talk to me right now about what I need because right now is when I'm interested Right now is when I'm on your website right now is when I'm not thinking about other variations of how I might solve this problem And you have an opportunity to sell me and so Sam
I don't know if you've seen this but like check out bland.ai.
This is I have one I built it if the answer is Have you seen this assume it's no and my mind is being blown by all this stuff But basically it lets you build a phone agent for yourself So I went on here and I built a phone agent So I built a guy who can answer the phone so that when somebody goes to somewhere and they want to they want to hire somebody It'll be like awesome.
What do you hire for have you ever hired overseas?
And you're like yeah, I have it's like cool Tell me what you're looking for to couple you know a couple sentences Oh great.
It sounds like what you're looking for is somebody who could be a developer for your Shopify store Our our novel budget for that is 2000 a month with that work for you or you look for something a little bit more a little less And then an answer say it basically does the intake the initial sales call for you and it's like no problem We've hired this month for 85 other Shopify
brands who are looking for Shopify developers.
You're in good hands We do this all the time.
We will I'm gonna start looking for candidates now I'm gonna email you tomorrow with three candidates.
How does that sound and the person's like great I guess I can just like wait for that to happen or it'll pull from our existing database I'd be like here's an example resume This is the type of person we'd be looking for with this person fit your needs yes or no So then the human salesperson can will come into work and see a ticket that's like the AI agent did the initial
sales call And found the customers requirements and kind of already warned the sale up and told the customer what they needed to know The things you repeat every time on the phone and now you could follow up with the more bespoke answer for that person That's the future that I see I wasn't able to fully build that I did like a prototype of it But that's what I think Websites
even like ours, which is an internet business should have which means that every plumbing and pest control and restaurant They're gonna have their version of that This is 100% way better than having a call center or it might it will be when it as long as it works as good But this is absolutely the way to go all right.
Let's do some more. So you have another one on here That's I think an easy one that's cool next gen auto complete And I think the idea here is you do a chrome extension or a browser extension That not just like auto complete helps you fill in the next word it thinks you're gonna say or how to spell a word But what you have here is that it starts to learn your voice So it can write
your it can help you write your emails or your blog posts in your voice Which is kind of like the next level up from auto complete next level up from Grammarly It doesn't just kind of correct or spell check your stuff But it actually writes the way you write because it has watched the way you write is that the thesis here?
Yeah, yeah absolutely and I think it can be you know Lots of different types of business communication, but especially like email So I don't know this is this is actually my friend Mike Vernal's idea I think he suffers from the same thing I do that might be true for you, which is like I'm an incredibly picky writer and so I will use the models today for Generation of basic
content or I'll ask my amazing EA to like draft emails for me And then I will go rewrite the whole thing because I don't like the tone because it doesn't sound like mayor Because it's not tight enough or because I want to use a certain phrase and I think the next level of like value and impact is definitely gonna be um, fine tuning to specific voice and nobody wants to write
like chap e GPT like nobody wants to be the generic AI either So if whatever he wants is the thing in between this shit's all wild to me Is there anyone right now doing that that you like because I would like to use this today I mean superhuman has like really interesting AI features But I think the the unlock is gonna be the personalization And what's your overarching
Investment thesis. So you have this thing called software 3.0 which by the way most VC thing to do to be like oh software 3.0 web 3.0 You you've done it you you've gone full VC.
What is software 3.0? Yeah, okay, so the seed for that phrase software 3.0 it comes from actually An essay that Andre Carpati wrote years ago about software 2.0 and the base premise here is that like you had to write Uh, a lot of software by hand in a prior generation before machine learning and then software 2.0 and Andre You know worked at Tesla was working on autopilot
was really about data set labeling right you you are Teaching a machine learning model by the data you choose to put into the pipeline How to do new tasks Software 3.0 is the idea that the next generation of software a lot of it is about manipulating foundation models and they're called Foundation models because they have a lot of capability out of the box You don't
need to train them from scratch You just need to give them like guidance reinforcement the information specific to your business And so an example would be like Sean was talking about for his Lead capture intake form voice bot like he doesn't need to go train a model He doesn't need to go like collect data for that software application like the voice agent is a software application He
just needs to like make sure it's plugged into his scheduling system and his database of candidates and Be able to retrieve the right information about the business and like, you know Respond consistently to customers in a certain tone right and so that's more about like manipulating a bunch of this base work that people Like lads have already done for you And the premise
here is like that last mile of getting a foundation model to be like something that serves all these use cases in the real world that You know, maybe the research labs think of as niches like the world is composed of very large niches And that's why I think it's a thing is really big opportunity for entrepreneurs and for us What are some of your like hot takes or maybe
your Contrary in takes anything that you think that might be counter to what the Most people say most people do most people are betting on do you have anything that is against the grain?
You know, I'm gonna get I'm gonna give a like a somewhat arrogant answer Which is I don't spend a lot of time trying to figure out what the entire market thinks Okay, so I'm like I don't know which of these things are contrarian I can tell you where like my opinion has changed dramatically like let me give you one example for many years in Including you know the tenure
of my investing at graylock I was one of several people who are like okay We're gonna go understand healthcare and digital health and I was like oh healthcare sucks, right?
It's a quarter of the economy.
It's really important How could you not want to work on this mission?
But it is so slow and the incentives are so screwed up that like trying to Enter that market with technology Or the speed of entrepreneurship that you know so come all the entrepreneurs are seeking is like not a good idea And we just did a healthcare administration Automation company So I'm like, oops, like change my mind real hypocrite here and like one of the reasons
being I'm like well if you think about the My numbing work that happens in healthcare administration like billing authorization coding claims processing like all like Even not even my numbing but just like expensive and manual like patient support It's actually really fertile for an AI company And you know we back something that's like growing really quickly
in one of those domains, right?
And so I just say like I guess I changed my point of view on healthcare I went to the pediatrician yesterday my doctor is with my baby there and I'm sitting there And she's got her iPad on like a table and There's a video like there and I'm like who the fuck is that guy And they're like oh that's just like my scribe I He's just listening in and he's and he's taking notes But
she was like I used to stay up until 3 a.m.
Taking notes on all of my patients.
Oh wow They just do it for me and obviously the wheels are turning my head.
I'm like yeah that That job is gonna be unnecessary in a few years But it was amazing to have a medical scribe I've never seen such a thing and she's like oh this has been around for a long time.
I was like I've never seen that Yeah, I do think one framework for like your listeners like thinking about different ideas is like what parts Of work have been outsourced services already right Because like it used to be the doctor taking the notes and they're like wow We pay this person a lot and like they should see more patients and think about their patients more
like let us outsource that to a cheaper tech In our office Let us let like outsource that tech to India or the Philippines and now there are a number of scribe businesses in Medicine that are growing really fast like a bridge nobla freed like it is happening And so I think that will happen in a bunch of different areas where like basically if you can Create separation of that work
already to outsource it then maybe you can outsource it to a machine as well Yes, I'm all men had a good thing.
He was like everybody worries about AI taking your job You know that's not the right way to think about it.
It's AI will take your tasks Like you have to think about it not at a job level, but at a task level There are certain tasks it can do really well.
There's certain tasks it can't do really well There's certain tasks today it can't do that in the future it can do and so eventually a job becomes a bundle of tasks um But but for now it's you can't think of the whole bundle because it can't replace the whole job But it can replace specific tasks Which might be just the way it works in the long run is that there's a huge slew
of tasks that can be that can be done by AI And then there's people that bundle those tasks together to make sure that they're getting done well or at the right time I think that's like a proxpently right but to be intellectually honest like that there was a scribe in that outsource BPO that had that job and so it's not taking the doctors job But it's taking the piece of the job that like
the doctors job that already got separated out the task that they did they didn't like But that became a job of its own Yeah, the job and the job goes back to being a task basically in this case.
Yes. Yeah. Yeah. It's a good framework Sarah, are you are you investing exclusively in AI related businesses?
I am a technology investor.
I'm not a machine learning researcher I've been working on this stuff for a handful of years and I really believe it I think it's like the most important thing to happen in technology in a long time But I'd say like I'm also here to just you know investing great tech companies and so you're also here to get paid I am also here to work on things that will work that are important
right um And so like if a if an entrepreneur that I think super highly of or like that I've worked with before or whatever comes to me and says like I have a great idea nothing to do with AI I'm still definitely going to be really interested in that if you ask me like what are the ideas that we think about or are hunting It is all in AI I do want to put one more thing out there which is definitely
not a idea that just anyone can go after It's kind of the opposite of the like easy wedge idea in terms of How can I put distribution around like One functionality for a niche on a on a model like a AI Had shot application or something, but I do really want to hear from anyone who is a point of view on what happens to the like Nvidia compute monopoly and overall what's changing
in the data center. I don't know if this is a hot take to your former question, but like I think a lot of people intellect in technology really the intellectual like are like oh Yes, of course workloads are changing from not AI to AI But they don't actually think about like what that means in terms of scale and market cap like that means like chips memory bandwidth networking
energy storage Optimized system design like that was a lot of technology company market cap before and so like if that's true There's going to be a bunch of different like new specialized solutions and it's trillions of dollars of value at stake And it's not just like single direct attack on Nvidia that is like the opportunity What what else would be in that category
if it's not just like hey our chip is better than Nvidia's chip What what else is what is it what's another shape of a company that could be in that that space?
So I guess in example, it'd be like well, what are other bottlenecks like Memory bandwidth what like what if you design storage to be specific for AI data centers What if you like you could do cooling systems?
Like there are if you just reimagine the entire data center around like big AI inference I think you end up with like totally different needs The the New York Times had this article the other day I don't remember the stat entirely But it was something like the amount of AI capacity or in chips Like currently created right now We need to create like another like four
trillion dollars in market cap in order to satisfy like the amount of capacity that we have And they were sort of writing it in a way of like I don't know if we're going to be able to do that But then when you think about it the other way around where you where you think about well in 1998 If you said like you know what how big is the internet going to be I'm sure it went far beyond
virtually 100% of the experts opinion as to how big it will get And I remember reading this article the other day and I was like that's just absolutely astounding that we're in one of these moments Sequoia Sequoia came out with a sort of blog post or I don't know pdf or something like that about this the thing They called it the $600 billion whole or something it was basically
saying well We've we've invested this much or we're investing this much in CapEx So if you invest that much in CapEx, what do you need to get out to make that you know return You know that's a VC saying that which is which is Not just like some journalist who doesn't get it who doesn't get tech So what was your reaction to that?
What's your take on that?
I think it is a lot of CapEx I think if you put it in context of like how does it compare to other Big CapEx spends in the past let's say like the broadband build out like well we wanted the internet You know like we spent about two trillion dollars on broadband to date like we're not there yet, right?
That was worth it And so what I would say is yes, like it's a totally valid question We're spending a lot of money.
What are we gonna get out of it?
I think we're gonna get a lot of value We had Darmesh on the Darmesh founded HubSpot Darmesh is amazing.
Yeah, he's really wise And he's tends to be right more than he's wrong And I think he said something great when I asked him.
I'm like man I'm a little nervous about a lot of the stuff where the world is gonna go And he's like well, I'm fairly educated and I think that It's not gonna be as good or bad as you think it's going to be Do you agree with that sentiment?
No, I think I think it's actually pretty bimodal I think it could be like bad or it's like it could be much much better So it's the opposite great.
It's either gonna be much worse or much better.
It's kind of you take Well, what's the bad like what's the bad situation look like where like like for example I think the bad situation and I'm fairly uneducated So take it with the greatest salt the very bad situation is that there's just gonna be this massive gap between the halves and the halves Not and like if you have money now that's gonna grow and you're gonna be
awesome bad situation is a IQ's assault Right, that's the the doom situation.
Yeah, that's a bad situation But then I but in route to that there is just this massive separation of the halves and halves not you have not You know what I'm saying that kind of freaks me out.
What's your what's your where do you see the bad situation going going towards?
Yeah, so I think it is not necessarily that correlated that your Your resources or your capital today mean that you Most take advantage of the of the AI revolution right?
I actually think people have a lot of agency in this I think go start these businesses make a million dollars That's such a small group of people.
What does it have to be because of human nature?
How many people know about the shit you go do your well your parents are tech entrepreneurs But go ask Sean's mom and dad at go ask my parents go ask my brother and sister like You're not entrepreneurial even if this widens the number of people who can be successfully entrepreneurial It's not gonna like it's gonna go from point one percent or whatever one percent of the population to
I don't know not 50 right now.
It's not gonna go that far.
Yeah, I don't know if it has to express and pure entrepreneurialism versus like you will get increased productivity For people in lots of different types of jobs and it's not obvious to me.
That's like Just the people who are ready most highly paid today.
You're somebody who thinks a lot about AI You spend your time in the AI ecosystem a lot of very smart people are actually worried about the doom scenario Ever you know from Elon Musk to we had Emmett cheer on the podcast and Emmett's a smart thoughtful guy And he's like, you know the p-dume the probability of have actual doom here is it's pretty scary It's not zero and here's
here, you know Here's where I think it is What do you think about that?
What are the odds that AI?
Truly is a sort of like a critically dangerous thing You know, I don't actually spend a lot of time thinking about this problem because the Because it is like conjecture in the future of both the objectives of these models and capabilities of these models that are kind of like Hand wavy right like if like I think when you talk to experts about Um some of the suggested
scenarios like here are two classic ones.
Oh, you know people are gonna use this to Design a virus that kills us all bio weapons or somebody is going to Make the objective for a foundation model that is super powerful to be like make the most money or generate the most paper clips And it's gonna take over all of the resources in the world and kill us all There's no linear path from here to there And so when when people
ask me about like the doom scenario Like I am much more concerned about abuses we actually do understand so for example like What if people don't understand what information is true or not or like people are gonna use this stuff for Hacking and fraud and lots of like bad activities today and like we should Go understand that and react as quickly as possible to that and as
a country like probably want to stay ahead On these capabilities technically.
Well, have you heard any wort or somewhat what's a wild example of how people use this for hacking or for fraud I mean like for for my company we get emails from me.
It's not really me and Sometimes it will have or um like I'll have a link to something that sounds like it's in my voice Yeah, I think that's a simplest example, which is Well like what happens if you can create really Sounding media like you know are your parents like you know going to not pick up the phone if it's a spoofed phone number And it sounds like you and you say
you need something like that's a bad scenario And so I think we need more tools to protect against that And general education about it.
So I worry more about that and then I'd say like I think of the probability of a bad scenario I said was like it is possible I can't see exactly how we get there and if you ask me like what are the reasons in which Uh broad use of cheap intelligence are going to be great.
I can give you so many reasons, right?
So Andre Carpathy just started a company around education and Like the the the fields that have been super resistant to cost improvement basically healthcare the government and education Like I think this will actually move the needle on some of the domains that matter a lot to all of us humans Um, and I think like when when people talk about like the doom scenarios
really fun and scary to talk about the dystopian doom scenario But I think the opportunity cost of not exploring the ways in which like they're you know you can have an economy of abundance We need to talk about that and that is really what I focus on same do you know who Andre Carpathy is No, but I love his name It's a lovely name.
Andre is a is a Uh amazingly well-respected research scientist and educator who's trying to create um like experience Uh, that is AI powered in education where like the most amazing expert in a domain is like a personal tutor taking you through the material interactively and he's one of like the five Big thought leader type guy he ran Tesla's AI program Uh, he like in terms
of self-driving cars. He was like one of the let's say five most known and respected guys about that He then went to open AI.
He then quit open AI It says he's listed as a co-founder of open AI.
So so yeah, he was a man. He was like the early Early mind behind it and Tesla.
He was basically the the guy leading their entire self-driving unit I think he's I forgot what his title was because like you know chief AI guy When I lived in San Francisco, it was a fun period.
I lived there from 2012 to basically 2020 or 22 and Back then it was like the Airbnb's of the world and Tesla or um Uber and We had sidecar back then where it was like holy crap.
We're gonna get into a stranger's car And this is so exciting.
This is so new and and you'd go to hackathons and people are working on like meal delivery services And that was like really cool.
I went recently or this was about a year ago and I was walking uh around the ferry building And this kid recognized me.
He's like oh say I'm you know, I like the pod Uh, I go I what's up man?
And he said I'm doing a hackathon right now in the ferry building upstairs Doing your wife want to come up and like see what's going on and I was like hell yeah, let's do it And so we go up there and it was so invigorating.
I was like dude we used to do these exact same thing But it was around like the sharing economy and and all this type of stuff and they were I was just talking to people What they were building and I remember thinking like this is like totally I guess it happens in San Francisco a bunch I was like this is like the Renaissance like there's something really really cool going
on and everyone was doing AI stuff And I just thought it's magical right when I moved there it was like mobile was the thing It was like oh x for mobile Everything we got to make what we got to make it work on a iPhone and an android and then you would see like You know some like false flags like front back came out.
It's like oh shit This is the next thing.
This is the next big social app and then it would kind of die But then you know in scram snapchat, you know They they actually they stuck and I remember the early days of musically that now become tick tock And so mobile was like the big thing at the time then it became crypto and it became the crypto hub Um, but I started to lose a little bit of the steam for crypto because crypto
was a lot more international um, but now it looks like for AI San Francisco at least is back as the the hub sir Are you in San Francisco?
Yeah, uh, we're in the mission in San Francisco and like I think we really believe in the sort of like community aspect of Not in the like maybe in the squishy sense the word too But like if you're thinking about looking for ideas for companies and being inspired to like Be committed to the grind and have the right ideas Then the right thing to do is not do it like alone
in your basement What you have in San Francisco are people who are optimistic And then like work oriented they believe lots of things are possible They're learning about what's going on the frontier and we actually do this grant program embed embed.com To create that kind of community and a bunch of other stuff But it is it is around this idea that you people want
to have the experience that you described San which is like well like not all of this is going to work, but what are smart people Trying that is some version of the future in this area of AI and like that will probably educate and inspire me And some of it will be really big.
Yeah, I think that like if you're 22 Um, and you're young and single and you're into the shit I would just say two words.
I would say go west Go west young man like People always talk about San Francisco.
It's dangerous. It's dirty.
It's lawless That's the appeal, baby.
You can say you you made it in the war torn city of San Francisco You don't want to be a billionaire who's coddled you want to be a billionaire who grew up on the mean streets of San Francisco Yeah, not that mean All right, I think we have for wrap up Sarah.
Thanks for coming out. Where should people find you and uh, where where should they follow you?
You can just google Sarah goa or conviction.com and I'm on Twitter.
I'm alright That's it. That's the fun.
Thanks guys
