0:00Hey everybody, welcome back to this week in startups. I am Lon Harris with me not as always on a special occasion, former co-host Alex Wilhelm. Thanks for being here.
0:09Oh, it's so good to come back. Friendly faces. I'm sweating in a blazer again. You know, just like old my friend.
0:15And much like old times, you will notice I am wearing my plaude pin. It is right here pinned to my jacket recording everything that everyone says. And then it will conveniently download it. a summary, a transcript, meeting notes, whatever I want, all organized. I don't have to do a thing. I just have to use hit the button, tell everybody that they're being recorded. So, you don't do it surreptitiously. And then it's all going to just be done and waiting for me when I am done with the show or the call. If your work depends on
0:44conversations, interviews, meetings, anything like that. We urge you to get a note pin for yourself. You can check it out. Find out more at plaude.ai/twist. And be sure to use the code twist to get 10% off your order. Thanks to our friends at Plaude. We applaud Plaude.
0:59We do indeed. And Plaude Plaude. The first good AI wearable is how I think about Plaude. They they cracked it. They actually got something together that people need to use and makes their life better. And the first couple of pendants just didn't hit the mark. So shout out to Plaude for being early, frankly.
1:12Yeah, that AI pin. Those people are like, "Why are we taking strays? Why do we have to take strays on the plaude ad re why?
1:18I had to watch their launch video lawn. That's why they're taking strays. It took five minutes of my life and I'm mad about it.
1:24Yeah. It's like I I I don't It just does that a pin is a weird form function. I think we can all agree.
1:30Well, anyways, the AI What are we here today to do? What are we doing?
1:33We're not here today to just talk about AI broches. We're here today. We're doing another uh of our patented flashback episodes. We're going to look back at an episode of Twist from February 2019. Folks, this is episode 900, a landmark show, uh, and it features Justin Khan, as Jason's guest, of Justin TV, later to be known as Twitch. Uh, the guy who once strapped a camera to his head and live streamed his entire life around the clock. That 2007
2:00stunt Justin TV soon opened up to anyone who wanted to broadcast and live stream their lives. and its gaming section later spun off as Twitch, which Amazon of course bought in 2014 for 970 million and you could currently still use if you want to catch up on the hottest video games or get very very angry about politics. By the time of this chat, Justin had moved on to Atrium. That's a legal tech startup that had just raised $65 million in their series B. Uh Atrium
2:30would shut down barely a year later and Justin has since gone back to gaming. He had the NFT marketplace Fractal and now he's doing Stash, a web shop and payments platform for mobile game developers. So, let's go back to 2019. Alex, take a little trip into history uh and check out some of these uh classic clips featuring Justin Khan.
2:50Absolutely. Now, I have a number of things that I want to get to long, but where are we going to start in this relatively long and I would say luxurious interview?
2:57Uh yeah, I I'd like to jump. My first clip is at about five and a half minutes in. Uh, and they are talking about uh Justin and Jason both when they first discovered that people on the internet wanted to watch other people on the internet play video games. Uh, let's take a look at this startling revelation. gamers were a genre unto themselves because I remember back in 2007208 I was doing mahalo and we started putting video video game videos right
3:26on the YouTube the YouTube and they went bonkers like millions of views but when did you realize video games were what streaming was about?
3:36Yeah so um how did that happen? Well, so we launched this site in 200 October 2007 and that anyone could stream anything and people streamed and there was a lot of like people trying to make talk shows and a lot of social kind of broadcasting like someone would just be hanging out.
3:50Um, and then there was this nason category which kind of grew that mostly focused on trying to get celebrities and things like you know more famous people to create content. The problem was they didn't really want to do it on an ongoing basis, right? And so a couple years later, this was maybe in 2010, uh we'd grown to a fairly big website. It was about like the top 300 on Alexa or something like that.
4:12So you got over 10 million people a month basically.
4:14Yeah. Something something around that.
4:16But the problem was it stopped growing and we're like we had no idea how to grow Justin TV, this web platform for for anyone to to stream. So what we decided to do was go back to the drawing board and basically sit in a room and try to brainstorm ideas. and my co-founder EMTT uh came with his idea and his idea was was let's focus on the gaming content on our site which was only 3% of the content at the time and so gaming was only I think a couple hundred thousand uniques a month on our
4:45our site but his argument was this is the only type of content that I actually want to watch Starcraft 2 had just come out and so that was driving a lot of interest and there was driving a lot of YouTube videos and who wanted to watch live streams and mostly they were on other people's sites they were on Ustream or live stream or or um but he thought we could focus on this and build a community around the game.
5:06People had to do the Zerg Rush.
5:08I I witnessed this personally. I mean, this clip stands out to me because I was working with Jason at Mahalo in this exact era when we also made this discovery alongside Justin TV that if you're I know it's hard to even conceive of if you are under like 35, but if you are of a certain age, the idea that people for entertainment wanted to watch other people play video games was very counterintuitive for a lot of people. We we it was incredibly counterintuitive law.
5:37I mean, my parents used to make fun of me for driving to their office because they had faster internet than we had at home. We had dialup and I would watch old Starcraft Brood War VODs from South Korea in the pro circuit and they're like, "So, you're going to go drive to sit and watch someone else in the past play a game?" I'm like, "You bet your ass I'm going to do that 100%."
5:57Yeah. how it seems so both because it's it's incredibly common and everybody enjoys doing it and it is not that weird of a thing, but also if you think about like sports like you might enjoy playing basketball yourself, but then you'd enjoy watching professionals do it very very very well or college kids who are also very good. Uh so that it isn't really that strange of an idea that that people who love video games would want to watch very skilled players play video
6:25games. But at the time, I'm telling you, we we did not believe it. And at Mahalo, we built uh Halo 3 was the first game we discovered this for. And we started building pages about like how to find all hundred skulls that are hidden in the maps around Halo 3. And it was dwarfing all of our other traffic to the point that it was undeniable we had to focus on video games. And it it really took a while to sink in in our Gen X boomer brains that this was where things were going. Well, I think one thing that
6:55happened during this time was the mainstreamization of gaming. I mean, if you think back to when I was a kid, I was born in ' 89, just for context for everybody. So, I grew up in the 90s and the early 2000s. I was in my teenage years and gaming was still very much a fringe activity. It was still something the nerdy kids did and the cool kids did not. That is now done. FIFA and Madden and a lot of games have really made gaming mainstream, COD, etc. Um, so I just love the story because I think it shows how you can catch something early and turn it into something quite large.
7:24Like it was 3% of their traffic. As Justin just said, that's not much, but if you can read the tea leaves correctly, you can build a subsidiary product that becomes so big everyone forgets what you were originally working to build.
7:34Right. There's also a little a little tactical practical Jason founder tip sort of hidden in there, which is trusting your gut. I mean, you know, EMTT, his colleague said, "This is the kind of content I would want to watch."
7:48And so, even though data wise, it was only a very tiny percentage of their overall viewership. He was like, "We should still focus on this because just my instincts are telling me that other people are like me and are going to want to check out video games."
8:01Yeah. But it's just such an orthogonal bet. Like even even given everything that you said, think about if you're a ventureback startup today and you're going to say, "Hey, we're going to just focus on 3% of our user base." like you would get laughed out of the room. So even like after this happened, it's still a non-traditional approach to growing a startup and it did yield a roughly billion dollar outcome as you pointed out. But I'm just amazed at the courage it must have taken to devote scarce resources during a period of flat growth on a small user segment.
8:27Brilliant in retrospect but bold and brave I think at the time.
8:30Yeah. And also uh the last thing I would mention is in the early days especially now video game companies and publishers understand that people live streaming except Nintendo. There still you still hear issues about Nintendo but other video game publishers now realize we need live streamers. That's our lifeblood. They're promoting the games to new users. Uh but back in the day when you would try to do this, you would constantly be hitting hit with content copyright strikes by the publishers of the game. like you're not allowed to
8:59show people what happens in my game before they play it themselves. That's violating my copyright. So, there were legal hang herangs to worry about as well.
9:08I mean, what they should have just said was is that we're using this for AI trading purposes and therefore your IP doesn't hold any water and uh and we're just going to dissolve your entire business. No, I joke, but I do love seeing how things change and they become like de facto over time. Like, you know, talk about Uber on the show a couple times. Uh Uber was the same thing. Like when I was growing up, it was don't talk to people on the internet. Don't talk to strangers. Don't get in their cars.
9:30Don't go in their homes. Yeah.
9:31Well, you know, it turns out that was entirely wrong with a little bit of technology and a little more time.
9:35One of the themes we talk about over and over again on this week in startups is making sure you do your chores. I'm no expert on these things. I have some experience. Steven Estus from CLA is an expert. Let's talk about being cash efficient. tell us about efficiency and what you see in the in the top tier startups in your practice.
9:55We're seeing kind of an interesting trend out there where companies aren't needing to raise quite as much as they had in the past. You really have to be careful as a founder to only take on as much money as you really need. You got to do the forecast and you got to do the modeling and you got it dialed in and get it right. Otherwise, you're going to end up either not raising enough capital to get to where you're going and you're going to have to go get venture debt or go back have an extender to the round or you're going to give up too much of the company because you just didn't recognize how much money you actually needed.
10:24Yeah, very important to get this stuff right, folks. And that's really a bummer when startups don't do things in a buttonup. They always have a great partner, a good partner to have on this adventure while things change, my friend Steven over at CLA. So, if you want a trusted adviser by your side who will navigate you through taxes, accounting, and everything in between, it's time to take action. Visit clconnect.com/withyouw.
10:48And don't forget to drop a mention that your boy Jake sent you. That's claconnect.com/withu.
10:56All right. Give us your first clip.
10:59Yeah. So, this interview blew my mind.
11:01Uh was a a Justin TV fan. I was a TW early Twitch fan. I'm an guy. Well, all of my friends. So, it did feel a little lonely at the time. A lot of I'm not going to lie. Uh, but one thing I really appreciated about this this interview was that I didn't realize how long Justin TV team had spent in the wilderness. Lost years just not having the right product at the right time for the right people at the right price. And we're going to loop back to this, but
11:28compare what he's about to us to the current startup era of rapid growth and what I might call instant product market fit. Let's take a listen.
11:37Working on in a dark room on this, you know, programming something. And I would think, why am I doing this? Why? What is go where is this going? And it never felt like we were making prog. It never felt like there was an inflection where it was like, oh my god, we figured it out. Yeah. And so um or maybe we had days like that but then it quickly reverted back to the baseline. Right.
11:58Now 100 days of struggle.
12:00Exactly. And so uh I you know it was it was that zombie startup feeling where we were 25 people 5 years in had you know weren't growing super fast and we were like how where does this go?
12:14Yeah. We don't see an exit insight.
12:16And you decide to call this meeting.
12:20When did you decide to call that meeting? What was that moment where you just like, I need to shut this thing down and move on or I just need to challenge everybody? What was that the impetus for deciding to sit everybody down to do that brainstorming meeting?
12:33All right. I This is a good one. I don't think I've actually told this story very publicly before, but basically uh Google came around and was like, "We're interested in acquiring uh Justin TV." And it wasn't a very high price to be honest, but they basically, long story short, we talked to them. We talked to them.
12:50What was their theory?
12:51Their theory was YouTube owns basically the entire internet on the video and this is like internet video and this is one sliver small sliver so yeah exactly we might as well buy the feature and they had YouTube live at the time and so uh they came to us and you know Justin TV was a decently sized site. It just wasn't very profitable and it wasn't like you know it was a small company and so we they they came to us and they wanted to interview our entire team.
13:16They interviewed our entire team. We let them, which you should never ever do, never let an inquirer ever interview your entire team. Cuz they interviewed our team and then they were like, "Your team's not good enough. Goodbye."
13:28Yeah. Which was like the most demoralizing gut punch of 2010 or 201 whenever I think it was 2010.
13:35Thanks for letting us come in. Uh we regret to inform you your team sucks.
13:41Google's people are smarter than yours.
13:43We would never let you in the building. It would be like significantly lowering the bar for the people at Google basically.
13:49We would never let you on campus.
13:52Like literally on a Sunday the Justin TV like you have to work out of the sales office except you're not good enough to work there so we can't acquire your company.
13:59It's like how they treat the um it's like contracting. Exactly. It's like this is you could work in the cafeteria but you have to work for another company that we contract with.
14:08You'd be like the cafeteria employees.
14:10We're going to contract you or the customer support people. We we just don't want you to consider your team Googlers.
14:16Yeah. And like you can't call your team Googlers and you have to live in Fremont.
14:18What What is it like to go back to work with the team after this happens? What do you say to them when you've been left at the altar? You just say like, "F Google."
14:28Well, yeah. It wasn't great. Um actually the team like took it very well, which is very surprising.
14:33Um so that was the impetus. We were like, "Well, we can't get acquired and we're not growing, so we need to figure something out."
14:39Huh. And so we went to the drawing board and we uh came up with these ideas and that's when we had the meeting and we started figuring it out.
14:47The thing that I find staggering about that clip lawn is how long the company had to try things, figure things out and essentially have its flop era.
14:55One thing I love about 2026 and the AI era and startups today is that they're going from zero to 100 million in revenue, zero to a billion dollars in revenue in record time. And you know, frankly, as a business journalist, that's exactly what I want to cover, right? Like, that's the type of story that I want to go dig into.
15:12But I also wonder what we're losing because I don't think today anyone would let a a high-profile founder spend so many years essentially beating their head against the rock and trying to figure out a way through. They would tell them to go build something else or to, you know, change what they're doing, but they had time to figure it out, to find that little audience we talked about earlier. And I I almost worry that we're missing something today.
15:36I mean, how could we not be in in a way?
15:39I mean, I guess the argument would be well, you know, you would just start your next company. Like the we the the the pace is still was always relentless.
15:49It was just like maybe you used to have three years with one company to pivot five times until you found the right thing. And now you would just like start a company and it goes at get it's done or start another company it gets acquired start another company and or or you're starting three or four your agents are building three or four different projects at once and you're picking which ones find traction and getting rid of the others. So I'm not really sure if things are changing that much or if it's just the tools that
16:19change the journey maybe. But let me let me throw this at you. So Instinct, right? This well-known agent that everyone's been talking about and using. Uh, I have not gotten an invite yet. Sorry. So, I can't tell you how it is firsthand.
16:30You know, Lon, one day we'll be at the cool kids table. Not today, but eventually, you know, down the road. Who was talking about Instinct first?
16:36Venture capitalists. Who got access first? Venture capitalists. The product was venture legible from the the get-go. Cuz what does it do? It helps you untangle your snarled family life and solves your calendar and books your job. It's literally the venture capital toolkit.
16:50There was a post today uh about about this exact thing. like it helps you do like what are the things that people keep talking about. It helps you do it helps you uh sort your your luxury items and shop around for for high-end items.
17:04It helps you book your lavish vacations and it helps you get the best reservations at the hottest spots in town. Are those everyday consumer concerns or are those very, very rich person concerns?
17:19I'm flying into Aspen tonight and I don't know where I should eat. who has the best croissant soup on the mountain?
17:25Like like that's not that's not me. I don't need that. What I need is someone to order pouches and paper towels because I forgot. Not really the instinct use case. But this company was not that like no VC wakes up and goes, "H, I can't live stream my esports.
17:38They're dying. I need that." So that's why I think that you're correct that you can build faster now. You can pivot faster. You can try more ideas. But I wonder if we're building closer to the same bullseye versus throwing at the entire dart board as we might have been back in the early 2010s.
17:52It's an interesting it's an interesting question. I mean, I I think it's a very it's a very open question and I just it's so different. Every aspect of the founder journey was so different back then. AI has really upset the entire cart. And what we're looking at, like what investors are looking at when they're picking companies is totally different today. I mean, I think you know on our venture capital show or when you hear VCs talking about it, it has since become reduced entirely 100% to
18:22you're making a bet on the founder. Nothing else. You can't rely on anything like is there is this moat going to exist in two weeks or is open AI going to invent this? Like is this model going to become too expensive to run and we're going to need to use this kind of model instead? Who who knows? It depends on the next model to come out. Like all of these things have become question marks.
18:44What how big is the TAM? Like what kind of audience exist? And and so all of those questions are kind of unknowable now. And so the they're they're making bets 100% for like I I like the cut of this guy's jib. Your team can push code faster than ever with the help of AI agents. But when something in production breaks down, you have no idea what's really going on. So you just give the agent your error message and you hope for the best. But there is a solution.
19:09And the solution is Sentry, which is already being used by 4 million developers. Sentry is constantly watching your app, so when something breaks, it already has all the context.
19:20And Sentry's AI debugger, Seir, can quickly determine the root cause. Now your agent isn't guessing. It's targeted on the solution. If you're running Cursor, Claude Code, Factory Droid, C-Pilot, or anything else, there's nothing to install. Anything that can call an MCP server or a CLI can talk to Sentry. Sentry finds the bug and your agent fixes it. Try it free at s n t r y.io and tell them Twist sent you. They have a free dev plan and listeners to
19:49our show can use the code twist 26 for $240 in sentry credits.
19:54I think also the the the expectation of faster growth makes more sense if you consider it from the perspective of how quickly technology is changing. To your point, so think about the life cycle of an AI model. You spend all this money collecting data, then you pre-train, then you post- train, then you fine-tune, then you do reinforcement learning, then you put it out there and you have x amount of time to monetize it before it becomes essentially moot. So the cycles of tech are much faster now.
20:15So there's less time to grow slowly to stagnate or whatever because by the time you find your footing, you'll be dead three times over. But back in 2019, pre-Cloud code, pre-agenta coding, preusable AI, pre-hat GPT, uh, very different worlds. Maybe that's what I'm referring to is just that no one could do as much so people did less and we had more leisure time perhaps.
20:34Well, and it's also like if I had a great idea and I built the app and I released my app. Even if my app sucked and somebody else used my app and was like this is bad, I could make a better version of this. That's three months, four months of like I got to find a few other devs or a technical co-founder and we got to actually build it and test it and make sure it works right and then maybe we could launch it. Today, if I was like using an app and it was like, "This app sucks. I'm going to go into Lovable and
21:02around for two hours and maybe I'll make a version of it that I like better."
21:06Yeah. And I'll host it myself. I won't pay the App Store tax. It'll work on all of my devices, not just iOS, etc., etc., etc. Well, I just liked the story of how long they stuck with it. I just don't think even startup employees would stick around that long today to build something that ended up being iconic.
21:21So, it would Yeah. Everything develops the whiff of failure much more quickly now to the point that if it hadn't taken off after like a year people would be like well I'm going to go work at that other company that took off after 3 months or if you're Jev from Typesafe I mean it went from zero to trillions of tokens overnight and then a couple weeks later open AAI at their developer day announced a competing product that might crush it. So we'll have to find out. I hope everyone made their money you in that short window of time. Um before I even had a chance to understand
21:49what it does it's already outdated. I have gone deep on Jev and there's still about it deep inside its architecture that feels like magic to me and I don't quite understand how it works but I want to stay on this theme of what's changed what's different and uh during this interview Justin and Jason who have been around the technology block a couple times uh talk about how the earlier tech was more about doing things for passion uh this is about the web 2.0 No phase and I think it's an interesting point of
22:17between that and today. So if we could roll the tape at about the 25minut mark we'll take a listen.
22:22There was no money in the system.
22:24So web logs inc when we built in gadget or movable type or dig or delicious or flicker these were all passion projects by small teams that just wanted to see those products exist. That's what I loved about Silicon Valley in San Francisco during that time because people were just doing it not because they wanted to make money because it was not a popular thing to do and it was not a good career path. They were doing it because they thought it would be cool. It was like a cool experiment.
22:52Let's see if we can actually get this website to exist in the world.
22:55Yeah. And like will people do it or interact with each other on this weird website?
22:58Will people dig or Reddit this story?
23:00Yeah. Will people understand what that even means?
23:02Exactly. And I love that. I love that sense of exploration. And I feel like I know this is going to sound like the jaded like sad guy, you know, old guy, but like I feel like there's a little bit of that that's missing now here in San Francisco because there's a lot of the culture has changed. It's matured and people are coming here for their career now. You know, they're like, "Okay, I want to like be a this is a good career move." You know, you know what's interesting about that is I think it's cyclical because that actually happened in the dot era. Yeah.
23:28Like towards the end of it, people are like, "Okay, I'm graduating. I went to Harvard, got my MBA, and I'm going to go into pets.com. That's a good move.
23:35And and everybody floated to pets.com in every possible iteration.
23:39And the second it got hard when the do boom, they ran back to Goldman Sachs. They ran back to Madison Avenue to get an ad job. They And it's I call it tourist season. Like we're in the middle of tourist season right now. It's high season. Yeah.
23:52And there's a lot of people here like who are building companies.
23:55I don't know if their heart's really in it.
23:57Lon, what I what I find really funny about this clip, well, one, history just repeats itself apparently. We're always going through the same cycles. But uh thinking about the financial sector as similar in terms of like value creation as the technology sector like you can go to Goldman Sachs or you can go to Google. Today the most valuable bank in the world is JP Morgan Chase and they're worth about 890 billion. The next one is the China Construction Bank 430 billion or as we now call it a series B. So like it's so funny to see how much these paramounts of prestige these mountains
24:27of money now seem relatively unglamorous and small. It's it's well what's also interesting there is remember that I recall that era when like the smartest and the best and the brightest graduates from the Ivy League and the top schools were all going into finance and there was a lot of like hand ringing like all of these people who should be our teachers and our scientists and our great thinkers and philosoph they're all just becoming financeers because that's where the
24:54money is. You don't hear that today when we the perception is that our greatest minds are now going into building things and making things again. So perhaps it's a positive correction. It it is a positive correction somewhat. It is not quite as good as taking our best and brightest and maybe putting them out into the rural schools to really power the next generation of minds that are going to take us to the stars. But but think about this in in finance. You're doing deals, you're structuring credit instruments, etc. uh you're really just
25:24playing Excel, right? That's what you're doing, right? And at least in technology, you're often building something that does scale to an enormous number of people. Like there's over a billion people that use Chat GPT X has a huge user base. Google searches you pay for this. So like Goldman Sachs never gave me a tool. JP Morgan Chase just gives me a fee.
25:40It's impossible to argue that these big AI companies are not doing more. I mean like Grockbot saves me hours of time every day and like there's no new financial instrument that a guy at Goldman could invent like a new kind of derivative or whatever that would actually make my life better. Like I'm sure there is a guy out there who was like, "Oh man, I wish there was a new kind of derivative today." But like for me, I'm definitely benefiting a lot more
26:08from people going into tech and creating amazing tools than I am from people coming up with like a new way to invest in a bet about what the market's going to do regarding banana futures or whatever.
26:22Yes. Yes. But the the the first part of that clip when they're talking about the web 2.0 era, which is really when I was starting to pay a lot more attention to startups over finance because I was originally I wanted to go to get an econ degree and go into banking. Like that's that was the plan. um those companies were idealistic but also like silly in a way that modern technology companies are not like I don't know if this is the American dominance theme about defense tech and be a hurly burly American but like delicious had a dumb URL if you
26:51remember how to spell that with all the ico us I believe yes wow I thought I was the last person who could do that one on command shout long uh and like dig was spelled with two G's just because whereas Instinct started off with Instinct.com.
27:06Yeah, there was there was I think it's instinct.co actually. That not to not to burst your bubble there, but um uh Instinct.com.
27:18Oh, never mind. My my mistake. Uh but the Oh, they got they got both. They got both, folks. They got both. But the other thing I was going to say is I think there was this idea that nothing mattered other than users like that when I first like 2007 was when I first started working at uh in tech at Mahalo for a guy named Jason Calacanis. It was my very first startup and that was really surprising to me because you you know I got out of college and I I took a
27:46few econ classes in grad school and the idea to my mind was always like a good company it's like about margins you know it's about like how every time you sell a widget how much are you making versus how much you spent to put that widget together and the the higher that margin the more widgets you sell like you're thumbs up you did a good business um and then I started working in tech and nobody ever talked I never heard one conversation about that about like spend
28:16versus it was just make number go up how many people used it monthly active users that was the only metric anybody was was checking that's all the investors cared about they'd give you basically unlimited runway if you just kept growing fast enough and adding a bigger footprint.com is always the one I come back to you remember koz m o and it was here was the pitch for Cosmo.com. It was just it was like GrubHub or Door Dash before those
28:43existed, but the hook was there was no minimum order size. So, you could order like a lighter and one muffin and they would send a guy from somewhere like from Pink Dot or Circle K or something. A guy would go pick up your muffin and your lighter and then drive it to you. And I don't even think you had to tip.
29:03You would tip like a dollar. Like, you didn't even have to tip. It was like the cheapest thing in the world because all they cared about was one more person today used Cosmo and we can go back to the investment team and say lookie look it doesn't matter how much it cost us to go bring this guy this muffin he used the the app. Hey everybody I'm here with Keith Paris. He is the founder of Lightfield. They are an AI native CRM and it builds and it updates itself in real time based on whatever's in your email, your calendar, your Slack, your
29:32meeting notes, you know, all the most important stuff that keeps getting lost.
29:35Uh, great to be here.
29:36When people go to try Lightfield, do I need to talk to my CTO or my CEO or can I just start using it as an individual and, you know, like a bottomup SAS kind of solution? You can play single player mode or multiplayer mode. How does that work? Um, so you can absolutely start in single player mode as long as your your CTO or CIO will let you connect your mail and calendar. Uh, it's really sort of the backbone connector of Lightfield.
30:00Um, so we we have some folks who try it out by themselves. Uh, and then eventually they they move their whole company over.
30:06Lightfield is model agnostic. So if I want to use open-source, if I'm super concerned or I have an AR on pre or if I have an on-prem system and my CTO and my CIO are very militant about that, I can switch models uh and use whatever I want. It's headless.
30:23That is correct. Uh you can use any model you want. Um all of our providers have signed a zero data retention clause. They're all in America. Um but uh it is truly headless. You can use uh the model that that suits you best. So everybody go check out heightfield.app.
30:40And so I think that led to a lot of just like incredibly dumb nonsense because it was just purely who's going to use it, not does this make actual sense as a company. And today everything's super frothy around AI. But I do still think people pay more attention to that. Like does this what's the business model? Is this ever going to make sense as a company? I hear people talking about that with Instinct today where they're like it's always going to be free. Like, yeah, they Yeah, that's what the Noah
31:07Shin from Instinct did that Invest with the best interview, I believe Monday, and he said it's always going to be free. They're just going to take a cut of transaction. So, if you buy book tickets for a plane ride trip on your Instinct agent, they'll take like 2% or 3% or something. And they said there were even boutique hotels that are offering them like a 30% cut if their agent makes a reservation. So that's but people are already like picking this
31:37apart like does this make sense? And the app is like you can't even use it yet. It's still weight listed. It used to be years before people had that conversation. Well, you actually outlined some very good examples of why this has changed over time. Go back to Cosmo. Think about what they're doing.
31:52That's not a pure software product. That involves real world purchasing. of all people on bikes or cars moving things around. There's no way to scale that without charging a lot of money. Now, contrast that to the web 2.0 era when you have dig and delicious and web logs and so forth. You could add a million marginal users at the cost of some bandwidth and some CPU time, right? Now, take that to the AI era. No longer the case. Serving customers has real costs.
32:17We are in a compute crunch and every CPU or GPU cycle that you consume has a real cost to it. And that's probably why companies are monetizing today faster than they were in the web 2.0 era because you kind of have to or you're gonna pull a YouTube and probably not find your Google.
32:32Yeah. If Open AI existed during the web 2.0 era, they would never have ads by now. They would just purely be about we want every single human being in the planet to be using Open AI. It's only because it cost them so much every time I'm like what's this planned? You know that they have no choice. Whenever I replied thank you to my uh JTPD codeex instance and realized that I'm using Astra, it goes thinking. I'm like oh man. It goes you're welcome. And that was like half my
33:00You boiled a puddle. How dare you?
33:03It's okay. I'm going to boil a lot of puddles before I'm dead long. I love it.
33:07It's like it's like a shirt a guy would be wearing on like a cruise ship. Like I'm going to boil a lot of puddles before I die. All right, we're getting silly. One more clip before we we wrap with with Justin Khan. Uh I love this one. But it's for about 57 minutes. So towards towards the end, uh he's got some great very practical advice. Uh founders need to recognize their own strengths is the observation. And boy howdy, never working for Jason, who's a wonderful manager and founder. But I have at this point now worked for a lot
33:37of different founders across a lot of different companies. And this is very applicable advice that I feel like a lot of startup people should take to heart. Let's take a look. What have you learned now through these four companies, five projects, six projects? You've incubated stuff.
33:53What do you think is at the core of creating startups?
33:58Well, I mean, I think that being a founder the most important thing really, the kind of meta level important thing is to know yourself. I think most people do not spend enough time understanding themselves and understanding what are you good at and what are you not good at and for the things that you're good at how do I like focus on those things and do more of them and for the things you're not good at how do I either improve or how do I delegate those to someone else I think most founders hit a wall because they're doing something it starts working and then they don't get out of
34:27their own way you know they are they insist they think because I created the product and it worked which there's a heavy a dose of survivorship bias there. I am going to like I all my decisions are right. So I want to micromanage kind of all these other parts of my company or I want to be have make all these decisions or my ego is such that I don't get out of the way of these other people I brought into the company to let them operate. And I feel like that's a very common problem that I see all the time and that's a problem that I've had in my life throughout my life that I've, you know,
34:56kind of only you know in the last maybe five or six years really understood deeply. This really stood out for me so much because I do feel like you get a lot of startups where the founder becomes this kind of not just like we think of bottleneck in terms of workflow but they become not just a workflow bottleneck but a creative bottleneck where it's like every decision has to go through this one person and maybe they're not great at making every kind of decision. Maybe they're great at making this handful of decisions but they should let this handful of
35:25decisions be made by the people around them who they brought in. Uh, and I just as a quick aside, uh, one of other than Jason, of course, one of the other best founders I've ever worked for was Clark Benson over at Ranker, who had a very good sense of this. He was a product guy, or he is, I shouldn't say was. He's still alive and running Ranker. He's a product guy. And so, he had very good instincts about how the product should work, how the app should work, how it should be designed, UX, UI. None of us would really question him there. But then when it came to like media
35:54especially, which is what I was doing, the editorial side, he would really let the team experiment and explore, try different things on social media, try different things on YouTube. You guys know that landscape so well. Just go.
36:06And man, it worked really well. And we ended up being able to grow that media business a lot because Clark kind of got out of our way and understood, I'm going to be over here worrying about the app and the product. You guys go worry about that stuff. this interview and longer than just the clip we just played. I I really do recommend that anyone listening to this who's enjoyed it to go listen to the whole thing. I'm really glad that I did. Uh Justin talks a lot about like being aware of himself and understanding what happiness is and creating distance from his emotions.
36:31Just comes across as a very very mature person who's done a lot of like experience and a lot of learning from that experience. Um but in this case what I found very interesting law was a implicit uh rejection of founder mode.
36:46Now, not really because founder mode actually came out as an idea later on than this interview was taped. But here we have an executive who's you know taken a company from zero to a billion dollar exit. So they have done the thing the most impressive thing you can do in Silicon Valley talking about shared responsibility and letting you know smart people run their own game. And that was the the conventional wisdom that I grew up in in startup land. And today very much so it's now pivoted towards founder mode. you know, one person carrying the torch, providing the direction, studying the North Star, and
37:15being involved in the details, and that's a change. And so, I I I know all of tech is bundling or unbundling or cycles and recycles, but this did surprise me as tonally different. I think I think it is it's a it's a different approach and it's it's a it's a better it's a better approach in a lot of ways that doesn't necessarily assume one person has to be the keeper of the flame for like everything that a startup does. they can sort of set the the larger vision and then let sort of everyone everyone go. Really good flashback coming up today. This one
37:44comes to us from May 2023. It's episode 1735 of This Week in Startups. Uh and your guest is Brian Chesy, the co-founder of Airbnb. Uh this episode dropped the same week that Airbnb rolled out Airbnb Rooms, a return to the company's original rent out your spare room concept. Uh, so that was why co-founder and CEO Brian Chesy had agreed to be on the show. To go back to 2008, seven investors passed on the
38:14chance to buy 10% of Airbnb for $150,000. The founders famously kept the lights on by selling novelty politically themed cereals. We're going to talk about that. Also in this conversation, Brian talks about early rejections, obsession with the customer, how Airbnb is organized, and where he thought AI was going to take the hospitality industry. We're going to look at some of those projections. So, uh, let's just dive in.
38:41No need for any further intro. Uh, the first thing, Alex, I wanted to talk about, uh, right away in the interview, uh, Brian starts telling the story about how investors did not like the idea for Airbnb. Now we accept Airbnb as like obviously that's a great business. I use Airbnb. When I went to Rome earlier this summer, we stayed in an Airbnb. It was a wonderful experience. But back in the as when Brian was first pitching this around, people were a lot less receptive. Let's take a look at that
39:11Everybody when they see you saying, "Oh my god, I love Airbnb." How do you reconcile that as an entrepreneur?
39:17We came up, you know, obviously I know Joe told the founding story. Um, but I I'll tell a little bit of the there's a founding story and then there Jason's a story of all the rejection. The first time we came up with the idea, it was October 2007. It was for a design conference that was coming to San Francisco. There was an afterparty at the Fairmont Hotel. We went to the Fairmont Hotel. The first person I told about the idea, he looks at me with a straight face. He said, "Brian," I said, "Yes." He goes, "I hope that's not the only idea you're working on." That's
39:46what he said to me. And this is like a design luminary in our industry. And that was kind of the general sentiment. I remember in um January February 200 2008 Joe and I were living in San Francisco apartment and we had a roommate named Phil and Phil worked for this company called Justin.tv.
40:07Justin.TV was a precursor to Twitch and it was funded by this program called Y Cominator. Now I didn't know anything about Y Combinator. I didn't know anything about Silicon Valley. I didn't even know what angels were. Somebody once told me there are these people called angels and I said oh my god this person believes in angels. So I was really naive. I didn't know anything about Silken Value as a designer by training. And Michael said I can introduce you to these angel investors.
40:30And so Michael introduced us to like uh 10 to 20 angel investors. Now at the time Jason we were trying to raise $150,000 at a $1.5 million post money valuation. So, for $150,000, you could have owned 10% of Airbnb. And the majority of them didn't even reply to the email. I actually end up publishing a bunch of the rejection emails, but many people said like, "This isn't a good idea."
40:55Many people said like, "Travel. We're not like excited about travel." Um, I remember one investor said, "We love everything but you and your idea." In other words, we don't I'm like, "Well, everything else is good." I unfortunately I was like, so I thought to myself, "Wait, what else is there?
41:08There's me. There's the idea. Yeah, I guess there's the the name, but they don't they didn't like the name either. So, and what they meant by they they liked everything but us and the idea was it was three founders, one software engineer, and two designers. And they thought, well, you have like two too many designers in your founding team, you know, like people just associated designers as like non-technical and therefore like maybe not adding value.
41:29And I think they I I always felt like Joe and I our ability as being designers was actually part of the secret sauce of me because it was not a pure technology problem. And also people said, "This is crazy. Strangers never gay strangers."
41:41I mean, I I will admit uh I had I was already working for Jason when Airbnb was new. And he we talked about it probably on a a podcast episode very much like this. And that was also my reaction was like, "Well, that sounds dangerous." Like, "How do you I'm going to go walk into some stranger's house.
41:59I'm going to leave my keys and some stranger's going to stay in my room while I'm gone." Like, it just feels crazy when you're not using it. And then when you're using it, like now I I don't even think about when I go to an Airbnb, I don't even think about this as somebody else's home. It's just my home for the week.
42:15No. Yeah. Yeah. Yeah. But I think there is something to be said for generations growing up in a post Stranger Danger world. I mean, think about the PSAs that you were getting when you were a kid. I mean, it was every person's going to try to offer you candy and stuff you into a van and take you off to, you know, Tuscaloosa or Timbuktu. And not really the case. As it turns out, most people are pretty cool. Most people are fine and you can get along just just okay.
42:35But, uh, for fun lawn, um, guess what?
42:3710% of Airbnb is worth today.
42:39Oh my god. I don't want to think about it. It's I guess uh like five $500 million.
42:53Oh my gosh, that's insane. How is Airbnb worth that much money? That's crazy.
42:58Airbnb is currently worth $92.5 billion.
43:02It's because it's became a huge business. Those investors were not just wrong. they were fantasmagorically wrong because it turns out this is popular the world around. Now what I want to say is that Airbnb has over time changed a bit if you think back to the early days uh especially if you knew couch surfing from before Airbnb. It was a pretty hostileish experience if you will. It was not fivestar. It was not Instagrammable though we didn't have Instagram back then. But today I do feel like Airbnbs are much more upscale. You rent a whole cabinet etc. Lovely. But I
43:30mean back then it was it was great.
43:32Yeah. It was more variable. Like it was in the early days of using Airbnb, sometimes you'd show up at the place and it was amazing. But then other times you'd be like, "This doesn't really look exactly like the photo." It was a little bit more of a shot in the dark. Whereas I think today they've got it basically locked down. You know, from the Airbnb page, if it's got like a 4.8 or up rating and you look at the pictures and it looks nice, like you pretty much confident in what kind of place you're going to be getting.
44:01For sure. But I I will though, you have to want the quirk. Like if you want a boring room with like a bed and a shower, then just go to a hotel. If you want anything else with a more personal human touch, then I think Airbnbs are great. No hotel has ever given me free weed gummies in Texas, but Airbnb has.
44:17I I actually I feel like it's when you want when you're just staying somewhere and you just want convenience and it's just like like hotel obviously when you're going to be busy or whatever. But if you're going somewhere and you want to get like a feel for the place that you're going, then you want an Airbnb because you're staying in a neighborhood and there's like a a person who's going to leave you a binder that's like go to this pizza place. It's really good, you know, like that's what you want when you're like a it's like a great vacation option. I don't know if it was like
44:46business travel. I'm just like put me at a hotel. I'm putting it on the ramp card. But uh for Rome, it was perfect. I would very much recommend uh an Airbnb in it's I'm so startup pill that when you said Rome I thought R O A M Howard startup.
45:02Eternal city, Alex. Rome the eternal city.
45:05It's the place where they had the big circle. They used to flood and have ship battles inside the town. Yes, correct. Uh Gladiator 2 is historically very accurate, I'm sure. Uh so our next clip for Brian uh he started you could at the tail end of that other clip he started to tell it but we want to get the full story in here because it's such a good iconic startup story uh is when he talks about it I I teased this a little in the intro how they funded the company in part by selling parody political cereals during the 2008 DNC
45:34and RNC. Here's Brian.
45:36So we go to Y Combinator. We go to the interview. It's exactly what I expected. It's Paul. It's Jessica. It's Trevor Brackwell. And it's I think Robert Morris. And they're all like basically they all ask us questions the same time like all four of them. And I was like totally bewildered. And the first question Paul Graham asked me is people are actually doing this and I said yes.
45:56His second question was what's wrong with them?
45:59And the interview at that point went downhill from there. He at midway through the interview he basically tried to get us to create Stripe. He's like you should create this like payments company or like an online bank or something. And we're like, "That seems like a really good idea, but like we have an idea." And we're about to leave the interview. It doesn't seem like it's going well. And Joe takes out a box of Obama O's. And he hands it to Paul Graham. And Paul Graham's like, he just got a novelty gift. He's like, "All right, thank you."
46:28And and we we go he goes, "What's the story?" He goes, "This is how we funded the company." And he goes, "What do you mean?" He said, "Well, we told him the story how we like made the cereal boxes and then the way we sold the cereal boxes, we mailed them to reporters and they put them their newsroom desk and everyone buy them." And he said something like, "I guess if you can convince people to pay $40 for a $4 box of cereal, then maybe you can convince at least some people to stay in each other's homes." And he ended up admitting us to Y Cominator. And I guess we've never looked back since. I also
46:58want to give credit to Jessica because I think Jessica thought I remember Paul and Jessica said later they thought we were like cockroaches and I think they mean it in a good way that it was like an investment nuclear winter and in a nuclear holocaust the only thing that survives are cockroaches and the only thing that would survive an investment nuclear winter would be the founders of Airbnb. We said we won't die no matter what happens. And so they basically funded us because we seemed Brazilian unkillable and like even if the fundraising market was dried up, we
47:27would just go on. So So a couple things. One, uh I do love hearing about a startup struggling in their Y Combinator interview because it's kind of a famous uh test of time, a coming of age moment.
47:36You become a man uh when you go through this. But it just goes to show that not everyone's perfect and people still make mistakes, even the vaunted founders of YC. Uh, but Lon, I have to say it does track with what I've learned about startups to know that the the grit matters more than last week's traction.
47:51And if you do know that a founder won't give up, well, that's probably half the battle of backing someone right there.
47:55Uh, yeah. And I mean, I think that, uh, you know, it's just like I was saying a little bit before about the, you know, that you're funding the founder, not the concept or the company. That has that that has always been kind of a truism.
48:08And I think this is a real, you know, case where you could see that is like it's not I it is resiliency, but it's also the creativity. It's the resourcefulness I think that that Paul Graham was noticing from these guys that like they're just doing business. They're just making observations.
48:26They're seeing angles. They're trying things. They're not afraid to like do something kind of goofy to try to get attention to make something happen. And I think that seeing that in a founder has got to be really encouraging as an investor that it's not some person who's just going to like sit at their desk head down and work on their one project single-mindedly. There is like head on a swivel looking for opportunities.
48:49Well, there's something about being a founder that is just sheer persistence and not letting anything stop you. And so if you find some people that have managed to somehow hack at the same time the political cycle, the news media and their funding crisis in one fell swoop and to do it in a way that makes them look kind of cool and punk rock. I mean seems like a pretty obvious thing to fund if you're an early stage venture capitalist because you want people and we've talked about this in the show ad nauseium over the years who are willing to look uh from a different angle or
49:19perhaps even a little bit outside the rules. Like I don't think you're actually supposed to use Obama's name and reuse cereal and probably resell it and blah blah blah, but no one really cares. So go for it, you know, off you go.
49:29There's there's tremendous value, and this has always been true from the as to the present day. A person who has a good sense of like how to get something to go viral, like how to communicate an idea that a lot of people are going to be interested in. There is always value in being one of those people if you have that. Like we were talking about Instinct uh moments ago, the viral assistant app that that's is the same thing. It's like the entire strength of it is how to create something, how to kind of have a comment, how to make a statement that is
49:59repeatable and sharable and encourages people to, you know, what they now call like stop the scroll. Like if you are that kind of person, that has been a marketable useful skill for 25 years plus now in the internet age. And I think especially as attention gets more and more fragmented across platforms and shorter and shorter form content, being able to stop the scroll is going to become, I think, a core competency of pretty much any founder. I mean, think about how we've seen launch videos of startups go from being super dorky nerds
50:27staring at a camera. Shout out Justin Khan. Uh to now these slickly produced, you know, quas Marvel's Avengers style films that people are now putting out at the cost of like 50 to 100K. Yeah. I mean, Airbnb was trying to raise 150 total.
50:41Yeah. Yeah. And I I mean we've seen it even extend beyond tech. I mean like entertainment media now is also about like capturing those viral moments and like like the like backrooms, you know, like back rooms was a viral moment long before it was like a cultural phenomenon. It grew in the telling because it was like originally like a person with a good sense of like this weird liinal hallway video is going to get clicks and and so I think we're seeing that across the board. That is a marketable skill in every industry in
51:11Yeah, if you can hack attention pretty much you can work in media, PR, venture, startups, tech, law, business. I mean like anything but coal mining, you're going to be fine. Um, the back rooms one is an interesting analogy though. Can I just go off script here and just ask you if you liked that film?
51:27I did. I do like the back room.
51:30Why I will I will tell you this. I think or to quote Paul Graham, what's wrong with you? I think as a movie you could tell it's a first it's a first time filmmaker. It's a young guy who's kind of figuring out narrative like I think there are there are some like dead ends narratively in it and you could maybe make that same story a little cleaner. Having said that, I think the back rooms themselves are extremely compelling like and I and I have since YouTube like the idea of being trapped
52:00in this like sort of surreal repeatable like like quasi realistic environment. And I think that he invented like the the original backroom shorts are from before the AI era, but I feel like in the AI era, it feels very like relevant. This like endlessly repeating environment that like degrades in realism over time and like the text becomes unreadable and things start bleeding in. It's like a glitch verse in
52:30some ways that we become more accustomed to in the AI era. And I I I think that that makes it sort of inherently just very compelling. I think it's a great setting more than a great movie, but I did enjoy the movie.
52:42Repeating text, quick release cycle, slowly losing your sanity. Are you talking about back rooms the movie or AI in 2026?
52:49I mean, that I think that's what's in part so potent about it is that without it like the best AI metaphors are not like super on the nose. They're like this is what interacting with AI sort of feels like. And I feel like back rooms really captures that specifically.
53:07And so does um the other one like that is Pluribus that Apple TV. It's not about AI, but it's like Carol's frustrating conversations with the hive mind are reminiscent in some ways of what it's like to interact with AI.
53:21I can't wait until my kids are older and I can catch up on like years of television and movies that I've missed.
53:26Late nights. Make time to catch up on Plurabus over your late nights. My my wife steals the television and watches HGTV and no offense, that's not what I want to catch up on, so I just let her have it. Uh, but on the point about AI and what's real and what's not, I want to take us all the way to the uh 59minute mark of this video because we get into a very interesting conversation about AI and what's going to happen when it becomes harder to tell what's real. I want to bring up these this clip and the one that comes after it. Not because
53:55this is the most technical practical startup advice ever, but because I think today we spend so time thinking about AI. It's like the thing. But in 2023 when this interview came out, it was a smaller industry. It was not the entire world. And it's good to see how smart uh engaged minds consider the technology before it became the only thing we can talk about. Take a listen.
54:15And so that's where I think it goes. And I think that we don't have a search problem in the future. We have a matching problem. So we are going to use AI to match you to whatever you want.
54:24And I think that the other thing is I think we're going to be really good I hopefully identity authentic authentication. You know the problem with AI is what's the first word in AI?
54:35The biggest risk before machines come after us is they become us and we can't discern who is a machine and who is not. And I think that we're already seeing that. I mean when that pope photo circulated I thought that was a real photo at first and I did too. I was like that's weird. the Pope is going for it.
54:50Yeah, I was like pretty awesome. He's got Balenciaga. Go for him. But that's today's technology. So, we're about to live in a world where someone can sound like me, they can behave like me, and as we spend more and more time online, it's going to be hard to discern what is real and what's not real. So, I think in an age of artificial intelligence, the other thing people want is authenticity.
55:09And authenticity is whatever is real and whatever is authenticated. So, I think our brand is kind of authenticity. Like we're not going to ever be the most digitally immersive company. That's going to be social media or entertainment. Our value is really the physical world. We get you online, offline with people different from you all over the world. And that comes with starting with knowing who you are, authenticating your identity.
55:30Lon I'm impressed by how precient that was. Although it was only a couple years in the past, but still I don't think I would have had that clear of a perspective of what's coming. But his point about AI can sound like you, look like you. We are seeing AI models in the voice category today advance to the point to which you can feed them a very small snippet of audio and ape someone's entire speech patterns. We're seeing people uh create I think we used to call them deep fakes, now we just call them realistic videos of people. You can actually have avatars kind of like
55:59stitched over yourself digitally. And we're seeing people's parents get called by fake callers that sound like their children. So everything he called for is coming true. And I do think that he's correct that we do want more authenticity. I just think it's funny that he was talking about the physical world in a brickandmortar sense, but today when we talk about AI, the physical world, we're mostly talking about uh robots or embodied AI, if you will. I mean, I I think this prediction in particular, we've been hearing since the early chat GPT era, which is like
56:28this is going to lead to a revival in in-person experiences, authentic experiences, human experiences, like live music is going to make a huge comeback and we're all going to start hanging out together and going to block parties more and like I I really liked that that sort of take in like 2021, 2022. here in 2026. I feel like that's not that is not so far that that has not really seemed like it happens. We've we
56:57put up a a lot of people have become much more hostile to AI outputs where they insist on I only want to read substacks that are 100% written by humans. I don't want slop on my timeline. Like there's definitely a thirst for authentic content, but I have not seen like I'm going to go to five extra concerts this summer or I'm going to host more dinner parties. Maybe I'm just not popular. But I don't feel like we've seen that as a society yet.
57:26You're absolutely right. And here's the problem. I think AI and the general erosion of trustable media would lead to more people being outside more and together. But the problem is we're all working more than ever to keep up with AI. So no one has time, right? Like there's in five years maybe we'll all work a little bit less because agents will take on so much of our workload that we have more spare time to take a walk during lunch, go see a friend. I could fly down and see you and take you out for barbecue. I love that.
57:55But right now, you and I are both so far behind at work. Yeah.
57:59That there's not the the capability to do it. And so I I think that's the real sticking point of AI for me right now. You and I are both AI users. We're fans.
58:07You know, we're not we're far from haters. But I do think that all it has done for a lot of people like ourselves is ratchet up the intensity and duration of work. And that is not quite not quite what I had in mind when we got this amazing advancement in AI.
58:19Yeah, it is it is one of the rare uh points of total agreement between myself and Jason's all-in bestie David Sachs.
58:27We don't agree. We don't agree very much, but one of the things we do agree on is that rather than costing people their jobs, at least so far, what it seems like AI has done is made everybody a lot more productive at their job and therefore a lot busier at their job. So, you're getting three times as much done.
58:46You're maybe working twice as much, but you're not being replaced. So, that that on the plus side, you still have a job.
58:54It's just harder. Now, can I can I uh challenge that ever so slightly, please?
58:59All right. So, I was here at the the good ship launch a long a long period of time. Um several years in podcasting time. You're doing three shows a week. It's it's we did a lot of work together. So, I've been through a lot of iterations of the show and uh one thing that was a consistent thing when during my time was uh I wrote the show most most of the time and was a lot of work. Prepare the docket. Jason had new ideas. We changed the formatting. It was this evolving living process. And now, Lon, that's no longer the case. And we've done the modern
59:27thing and allowed really agents to write a chunk of it for us because it's just collecting information and putting it down on the page. And I don't think you would go hire someone to prepare the show notes in the way did when I was uh when I was brought on. And I think that's that that is a change in the example of uh less job. I I mean, yes, but there's a guy, his name is Zach. He works for us now and he is the one who's making the doc. Like I
59:55used to write the docket by hand. It was my job. It took up a big chunk of my day. You would do it for different shows than me. Uh and you know I spent three hours putting this document together by hand with all the pieces of research or whatever. So Zach does that. Now I'm freed up. I'm working on the Substacks or whatever. Check it out. twwi startups.substack.com.
1:00:19best headlines in the game. No one outshines lawn in the pun game. Read everything he writes. Makes me smile every week.
1:00:26You're you're very kind. Um but so you know, Zach is now doing that job. Maybe he's spending an hour less a day on it, but it's the job is now not only putting the stores, you still have to pick the stories. Claude's not good at that.
1:00:42Still need a human to curate what we're going to talk about. You give the stories to Claude. There's a claude skill that turns those stories into the docket. Zach had to write and brainstorm that and create that skill. And then every time we have feedback on the docket, he needs to go back and fine-tune and improve that skill. And then he's the human in the loop. So whatever the skill comes out with, he's got to go through line by line and be like that, didn't nail this, nailed
1:01:08this, didn't nail this. It is probably like 20% less work over the course of the week, but it is still a job. And I don't think in two weeks we're going to iterate our way out of that job. I think that's going to be Zach's job for at least the next few months. And then it'll be on to the next skill and the next skill and the next workflow that he can improve. And maybe there is. Here's what I would say. In three years, in
1:01:37five years, maybe we'll reach a point where these models have gotten so good that we won't need a Zach anymore to fine-tune them. We won't need a Micro One with all their experts to help the Frontier Labs make the models better or a Taste Labs and all their experts to help make the models better designers.
1:01:55Or maybe we'll be done with that. I don't know. Maybe. And maybe then we'll be talking about, okay, now that all the architects and accountants and lawyers train the models to do their jobs for them, now nobody has a job. I I don't know if that's No, no. I I I don't buy the uh But I don't think that's happening yet.
1:02:14No, no. I I I'm just seeing little bits of work get automated. Like just to put another example on this, I write a lot and I have created some skills inside my Codeex instance that help me do what I call uh pair editing. So, I abuse commas and I need someone to go through my my my drafts and just remove the commas.
1:02:32Like, this has been a problem my entire life as a writer. I know it. But I never want to sound like AI because I do all my own writing. So, I've made skills that edit my work, leaving the tone, the jokes, the, you know, the way that I write, but just solving the uh the grammatical issues that are that pop up here and there.
1:02:48When I was at Techrunch and I started off, I had to take my writing and bring it to a human and have them do this. And here's the thing that blows my mind. You know what's really good codeex we'll just chat GPT I suppose it's incredible and so I do think that we will see a slow erosion of previously hightouch labor categories that are in the knowledge work game that will change the employment system structure it just isn't going to happen in 18 months like a thunderclap like everyone thought but I I I wouldn't go all the way the socks
1:03:16view that you know only more jobs no job disruption I would say more jobs net long-term mediumterm churn and I I think that's probably a great trade-off for what we're going to get down the road. I'm not worried about this. I'm just chewing on it as we go through it.
1:03:30Yeah. No, I mean I I think there's some wisdom to what you're saying and we're definitely going to see some movement in general, especially like I said in the 2, three, four year time range when all of the expertise and fine-tuning work that we're doing now on models is baked in and done and like maybe we don't need to keep having accountants look at the output and be like, uh, mess that part up again. the model will just know and benefit from the their
1:03:57expertise and get that get better to that point that we don't need them anymore. I I think that is definitely I think that is definitely possible.
1:04:06Now, one more clip before we go.
1:04:08Sticking to the theme of Chesy being a little bit early to things that are now very obvious. Uh we're going to play a clip of him talking about what's going on in the realm of AI software development. Now, of course, here in 2026, we are deep into our cloud code era. Everyone uses an agent to write code. Sure. But back in 2023, very much not the case. But here is what Mr.
1:04:28Chesky had to say. Then on the side, a friend few told me, "Hey, you got to try this place in San Francisco Cafe Okinawa that I've been going to to get tonkatu sandwiches." I told like three people about this and because I love these when I go to Japan and they're just everybody goes there and they're like, "Oh yeah, you're right. That was great." And now they spread it to the next person. And that kind of word of mouth, I think like this AI is gonna find little things like that where it didn't know that this was something that you would be delighted by.
1:04:56And this is such an opportunity.
1:04:58I think it's amazing. And by the way, I think I heard another one of your podcasts. You said something that really resonates that I think it's worth calling out. The cost to develop software is about to go down. And maybe a good analogy, Jason, would be like the camera. 130 years ago, very few people could operate a camera. And so therefore you had to be a specialist to take a photo and there weren't a lot of photos.
1:05:19Suddenly computer programming is just basically telling a computer to do something in its language. AI means you can now tell computer to do something in your language. The moment you don't have to learn a different language, you can use your natural language to English.
1:05:31Suddenly kind of everyone in a way can be a programmer like everyone's a photographer. You don't have to actually have a skill. Now there will be programming skills but suddenly anyone can do that. Now when that's possible there's going to be so much more software. We're going to live in an abundance of software.
1:05:46I think in a podcast you referenced like a ski instructor or a ski company like a niche business that couldn't have develop hired great software engineers but now they get the cool the best engineer you've ever had developing their app and so suddenly the skills start different. We have to understand skiing human psychology taste design and how to operate and have a conversation with that tool. But you don't have to necessarily build the infrastructure just like we never built servers because we had AWS. But if we
1:06:14launched 5 years earlier, we would have had to been really good at like kind of building out servers racket stacking servers. I mean your first half a million would have went towards a collocation facility. Yeah.
1:06:24And now it's like you're just going to talk to this thing and it's going to make your software for you.
1:06:28So I think this is going to create I think this is going to create millions of startups. I think that like entrepreneurship is going to be a boon.
1:06:36I think there's going to be millions more. I think anyone can essentially do the equivalent of what software engineering only allowed you to do only 5 years ago. It's going to be awesome for many people. It's going to be wildly disruptive for others. Albert Einstein used to have is saying the best way to keep your balance in a bicycle is to keep moving. And I think the best way to keep your balance in the world of AI is to keep moving forward and just adopt the tools. Don't fight it.
1:06:56Uh to put some context on this lawn, I I looked it up in in mid 2023. the leading AI models were GPT4, Claude 2, and uh and Llama 2. So, this was way before they were good at coding, but he was able to see clearly three years ago where this was going to go and I think I think they were dead on. Here's the question though for you because you are deep in the launch ecosystem, accelerators, you know, founder U, etc.
1:07:22Sure. So Chesy was saying we're going to see millions of new startups. And on one hand, I do think we're seeing a lot of experimentation in the market, but it doesn't feel like we're seeing that many more new companies come up. So I'm just curious what you're seeing and if that prediction from this Airbnb founder uh has borne out.
1:07:39I I you know, I'm always a little dubious of this prediction, especially because a lot of tech people tend to use it to advance the argument that like as like a push back against being anti-A.
1:07:49Well, like, oh, but it's going to lead to massive job disruption. Like, well, those people are just going to start companies. And it's like, well, everybody can't run their own co. Like, some people need to work for other people's companies. Some like you need uh users who have their own money from other jobs where they work to buy your like I don't I don't know if a capitalist society where literally every single person owns their own company is sort of functional. I don't think that's
1:08:19the way our society functions. So it always seems like it's missing a little gap there in some ways. But um I I do feel like we are seeing an explosion in entrepreneurship. We are seeing a lot of new companies and we're seeing a lot of people who have started one company are now starting three companies or are now starting five companies. And so we're seeing that grow exponentially where if you are already
1:08:47entrepreneurially minded and a builder, you are getting great utility out of this and using it to do a ton of projects. I think I think what's missing is the non- entrepreneur people. The prediction I think that Chesy and others are making is that people who have never started a company who maybe had ideas but always like I don't want to start a Squarespace that's too complicated. Now they'll be like, "Oh, but with AI, I could start that bagel shop I've always
1:09:15wanted, or I could open my own dog grooming business like I always wanted." And I'm not sure we're seeing that yet.
1:09:22Maybe it's just that the word hasn't spread to those communities and those people that like AI makes it that much easier to start your own company. But like I think we're seeing a lot of people who are already in the I'm going to one day start a company mindset using these tools to do it faster and easier. I just don't know if that's become universalized yet.
1:09:43Yeah. Uh on your point about not everyone can uh become a a founder. I think it was uh Yo Gotti who said that everybody want to be a general but don't nobody want to be a soldier and I think that does apply here that you know you can't have an entirely top heavy organization in the economy. People have to have jobs versus CEO titles. Um, the thing that I've been thinking a lot about though and just pairing off of what what Chesky was saying is that now that you can program in your natural language, your normal language, uh, people are building a lot more out of
1:10:12sight. Like one thing that I that I keep being shocked by is when my non-technical friends, people that I've worked for off and on for a decade plus, uh, say things like, "Oh yeah, so I was using Cloud yesterday and I I I made this app and I'm like, what? You you couldn't even open Google Docs 5 years ago. What are you doing?" and they're making their own stuff, things that they need, little things. And so I'm always trying to figure out like if we're not seeing this explosion of startups that we expected, are we seeing instead people at with jobs essentially making
1:10:40micro software companies inside their own role for themselves? And that's maybe where we're seeing more of this, you know, impact and rubber hitting the road and so forth. Well, I I'll tell you what else I think we're also seeing is people who were already doing things like they're a content creator making Substack posts or they they are a dog groomer with like a van that they drive around. Like I think a lot of people who are already doing that are becoming much more effective with the help of AI tools. One thing that I am always
1:11:09shocked by as a person who's been doing this job for 15 close to 20 years now, one of the massive headaches and also advantages like 15 years ago that I had was I was pretty good with Google Analytics. Like I knew how Google Analytics worked and I could look at the pages and make comparisons and be like, "Oh, we need to do this or this page is doing really well, so we should make three more pages like that." like I learned how to do that and that was a very like not everybody had that skill
1:11:37who was making blog pages or whatever and so that could put me at an advantage and today you could just download your Google Analytics or your YouTube analytics or your X analytics. I know because I do this all the time and you could just give it to Claude or Grockbot or whatever and say what kind of post should I be making or what can you tell me b you don't have to know one thing about how any of it works. You could even go, I did this once, too. You could go to Claude and say, "I have a YouTube
1:12:06channel. I want you to tell me what kinds of videos I should be making. What should I do in analytics?" And it will tell you exactly what charts to pull for it and what metrics it wants to look at to make you a full report. It takes all the inherited knowledge out. So, nobody has to show you how to do that stuff.
1:12:26And I'm sure those kinds of processes are making people much more powerful at the tasks they were maybe already doing.
1:12:33Yes. As long as someone's already done it and it has been ingested and is, you know, chewable by AI, then sure. I'm always so excited about progress and then I I think about that I'm like, well, you know, I could just prompt my whole newsletter and I bet it would be 70%.
1:12:49I am. I I will tell you as an aside and then we have to wrap. Uh so I'm doing these substacks for uh for launch. Now we have a this weekend in VC one. We have this week in startups and this week in AI 100% human written. I write every single word. I don't let AI do any writing for me. But I do have Grock bots helping me out at every step of preparing those newsletters. And I am able to I'm so much more. I I would never have been
1:13:17able to turn out three wellressearched fairly lengthy Substack posts in a day five years ago, but I can do it.
1:13:26Help people out. Lon, what is Grockbot doing for you? Is it clicking the buttons to publish them? Is it doing research for you? Pulling facts?
1:13:32It's that one. Uh, so I I'll give you a great example. In the this week in AI newsletter, uh, this weekend.ai, AI if you want to check it out for yourself.
1:13:40Um, we do a demo or a model comparison or a tutorial every day. Like what is like a hot piece of content about AI that's hands-on and practical that we can share every day? The old workflow would have been me loading up X and literally scrolling my for you looking for like what are people talking about today? Let me spend 15 20 minutes just getting a good sense or or that and then go to YouTube and spend another 10 minutes
1:14:09scrolling over there. What are the Oh, Sonnet 5.5 demos are the thing today.
1:14:15Now I have the X API tied into a Grockbot and I just tell the GR I already have this process figured out because I do it every day. So I just come in in the morning and it it it doesn't even need to be prompted. It just tells me here are the big trending demos, here are the big trending model walkthroughs. And it doesn't even just pull the links. It actually summarizes for me. So it's like lawn sonnet 5.5 demos are super hot today. I found three times as many of those as every like it's doing a research report for me. So
1:14:43uh and then I can go through that. I could be like what part of the transcript of this YouTube video does this come from and it'll give me the time codes. I could take that. I could give that to my clipbot and I could say make a video of this video between this and this time code and it just makes it.
1:14:58So, all the tickytac stuff is done and I just get to focus on the actual writing.
1:15:04No, I I I think it's a brilliant example and I'll I'll I'll leave everyone with uh one more AI hack while we're sitting here. Um, have you ever run into a very annoying payw wall because you don't subscribe to that particular website?
1:15:15Well, go to your favorite friendly chat GPT or Grock agent and say, "Hey, can you find me a gift link of this article link?" It will go on to X and find you one. perfectly legal, ethical, and a great way to avoid the payw wall.
1:15:29I'll give you one other producing tip with Rockbot. Uh it's really good at surfacing people's contact info. So, if you don't want to pay for like a a service, you know, there are those services where you pay them 20 bucks a month and if you're like a salesman, it'll help you find anybody's email address.
1:15:49Or just ask Grockbot and it'll get really good at it. And now I could just if there's somebody we want to book, I can say, "Find me some contact information." But it won't even just it'll like figure out their assistants name and look up their contact information. It'll figure out their press contacts name and find them on X or LinkedIn. Like it'll go three levels deep and spend an hour like what would have took taken me an hour of research and I can zero in on that person. And I I'll I'll tell you uh we're very
1:16:19excited. She's going to be coming up on one of the shows. Uh Dr. Fea Lee of World Labs. I've been trying to get her booked on a Jason Calakanis podcast for many many months. With the help of Grockbot, I was able to find an email address I hadn't found before. Got right through.
1:16:34Surely you mean uh AMD's faith.
1:16:42Yeah. Yeah. She's the world lab CEO. An AMD company.
1:16:45Chief scientist of AMD is her new title.
1:16:47Actually, I believe if you don't know what we're talking about, uh her startup was sold to AMD in an 8.2 2 billion all stock deal. I'm sure it was on the show. Um, but that's what we're joking about. So, all right. I think that does it. I think we've talked more than enough about Brian Chesy. Just we we enjoyed getting together and and hanging out chewing the fat a little bit. Uh, so thank you to Alex Wilhub for being here. I am Lon Harris. Uh, check out our Substacks, please. twwartups.substack.com.
1:17:13Go take a look, give it a read, give us a subscribe, and we will see you next time on This Week in Startups.
