How Lucy Guo Became a Self-Made AI Billionaire | Fortune Daily

0:02I think AI is making people work harder actually because you have to be awake for your agents to be running. I think it was last week I worked a 26-hour day.

0:14Hello from New York. I'm Ellie Austin and you're watching Fortune Daily. In 2016 and at just 21 years old, Lucy Guo co-founded Scale AI, which is an AI infrastructure and software company. After two years, she left and she went on to become the world's youngest self-made female billionaire. And she wasn't finished there because Guo's current project is Parses, which is a monetization platform for creators. Today, Lucy joins me to talk about building an AI company long before most of us had even heard the term artificial intelligence, how she bounced back from her contentious scale AI exit, trust and safety in the creator business, and how she invested early in a little old company called Anthropic.

1:07Lucy embodies a new generation of multi-hyphenate founders who made their money young and who made their money fast. And speaking to her was a fascinating window into the minds and lives of this new generation of tech billionaires who we talk about so frequently on this show. Lucy, hello. Thank you so much for joining us. So it's very difficult to give a succinct bio or introduction for you because you are a woman who does many, many things. We were just speaking outside. You're in town in New York for some DJ gigs. But you're also one of the youngest self-made billionaires. You are a tech entrepreneur, an investor.

1:45a frugality enthusiast as well. Do you think you're emblematic of a new type of millionaire, billionaire class today? I think that when you become a millionaire or billionaire, you are able to afford more time to be able to do things that you love, that you're passionate about, because money does buy you time. For example, I no longer have to do my own laundry because I have maids doing my laundry for me. I'm ordering food all the time, so I no longer need to cook. So for me, I've been able to free up time to be able to pursue side quests. I've always thought about doing, but never really had the freedom or the time to do.

2:23So number one on the list was DJing because I've always loved music. I think like music is the one thing that really unites all cultures, people, etc. I really believe this to be true and it is like my happy place. And when you're considering a potential side quest, as you call them, does it matter to you whether or not they bring in money? I would say it doesn't matter if they're bringing money because I optimize for happiness. So it just happens to be that DJing does pay very well, which is awesome. First, I want to go back to Scale AI, which is an AI company that you founded in 2016, long before the AI boom.

3:02You were just 21 years old and you left the company two years later and you've since become a billionaire of the equity that you hold in the company. So that's a really fascinating headline and it's kind of yielded a lot of interest in you. But tell me, is that kind of trajectory, you know, becoming a billionaire off a company that you no longer work for, is that commonplace in tech? Is that a story that we just don't hear about much, but it's happening all the time? I actually do think that it's pretty commonplace in tech. And I think that a lot of like the list, they don't count a lot of billionaires because so many people are early investors in unicorn companies.

3:34But these investors are in public, right? Like either they invested in a like using a LLC, for example, or they just don't own enough shares for people to really pay attention. But like those shares have made them a billionaire. I know so many people that are billionaires, but the world doesn't know. And they're billionaires off of like their early investments or their advisor shares or being a board member of unicorn companies. The Internet would say you were fired from Scale AI. I know there's kind of probably limitations legally as to what you can say. How do you describe what happened? There were disagreements and I had went to the board with some concerns.

4:13And I think that in general, and as a VC, I now understand this, investors and the board will always side with the CEO. Yeah. And what was the aftermath of that like for you emotionally? You seem like someone who bounces back incredibly well. But was there an emotional hit to stepping away from the company that you had poured so much into? So I was planning on leaving. So quite literally the next day, my friend had quit Stripe and then we decided to go work together. Okay, so you did have a very quick plan. And my final question on this, obviously now we're in this enormous AI moment. Some pretty alarming headlines over the weekend, which we've discussed on this show.

4:56Meta ended up buying a minority stake in scale AI. How do you feel not to be at the forefront of the AI movement right now? Are you relieved? Do you have FOMO? How do you perceive it? Obviously, you're doing your own team with Parsons, but you're not in a frontier lab or something like that. Yeah. I mean, I think for me, it's just exciting to be able to still be involved through investments. So I've been investing in a lot of both late-stage and early-stage AI companies. I'm actually a pretty large shareholder of Anthropic. And that was actually just the luckiest thing ever. I invested in a seed round company, and then they got acquired by Anthropic.

5:30Was it lucky, or are you doing yourself a disservice there? Well, no. No, it was like I'm very good. I think for me, I'm pretty good at detecting talented founders. So you detected with the emotive eyes. Yes. And then I invested in a talented founder who got acquired by Anthropic and was able to, like both my shares obviously got converted into Anthropic shares, but I was able to scoop up more. So what do you make about the discussion over the past week about AI potentially wiping us out within a decade? Is that alarmist? Is it true? I mean, I do think the safety measures need to be put in place.

5:59That being said, I think that a lot of the alarmist, I'm sure an older fan topic, so I don't really want to say much. But I think the best way to put it is enterprise has a reason to move towards open weight models for certain reasons. I think that it is also very true that we do need to care about safety measures, right? Like, what is going to happen if like AI figures out how to genetically modify COVID with like CRISPR and then we get like a 20x more deadly COVID from some person that thinks they're saving the world because it's overpopulated. Like, we don't want that situation. Okay, let's talk about Parsis, which you launched in 2022.

6:41It's a creator commerce platform and accelerator now. Tell us a bit, I'm interested in your take on the creator economy because it's projected to be worth$21 billion in US revenue this year. But most creators that we talk to on the show are still living off brand deals. So where is the money going and how can a creator capture it? Yeah, so I do think that right now our creators have found that they're making more money on passes than off of brand deals, which is exciting to see. And how are they doing now? What are you allowing them to do on passes? Yeah, so really everything. It depends on the creator.

7:13I think creators like certain niches will have fans that spend money on different things right so for example with our gamers they're going to be making more money off of streams we have these carot card readers that make a lot of money off of like you know one-on-one personal calls we have creators that make a lot of money off of merchandise so it really is dependent on like knowing your fans I think creators just spend more time knowing what their fans want and curating content towards their fans are making more money on passes. It's interesting because I would say the creators that make the most money on passes are ones with under a million followers.

7:47And my hypothesis for this is a mix of both fans willing to spend more money because they feel like they're supporting an undiscovered artist, for example. Because no one wants to spend hundreds of dollars on someone that's already rich. They're thinking, okay, why do you need my money to support you? I also think that these creators don't get as many brand deals, so they're spending more time making content. That being said, we do have creators with like tens of millions of followers where we're still about like 50 percent of their income, I'd say, which is exciting to be able to say. And you take a 10 percent revenue cut from these creators.

8:23Something like a platform like OnlyFans takes 20 percent. So how do you make that margin work for you? We offer two plans. One of them is our basic plan where we take a 10 percent take rate. And then one of them is our more premium plan with more features. Like we have a lot of AI features, for example. And that one we take a 20 % take rate on. And then just a mix of other things. We actually do a blended take rate of like 20 to 23%, depending on the month. Trust and safety is obviously a huge issue in the creator economy. I know there has been a class action lawsuit filed against passers. You have vehemently denied it related to explicit images and young people.

8:58um how do you think about age verification safety and scaling it for a platform like your own what does it come at yeah well i'd first like to point out the class action was actually thrown out as for how we do age verification i'd say we're stricter than pretty much every other platform out there um we currently like you know we'd kyc we take id on everyone um and then we have gotten like right now we do human loop as well so like we like have the human look at the id and a person. We throw everything into content moderation as well. We use like both CCM content moderation along with image detection on nudity, et cetera, to make sure that nothing inappropriate goes on the platform.

9:40And you're one of very few billionaires who's actually running their own startup day today alongside investing. What does this experience of actively running passes give you that a board seat on other companies that alone wouldn't? I would say it's definitely depth over breath, right? And I think that you can be very passive on a board, like you're really doing the once a quarter meetings, and you're probably on many boards, or you and you have many investments. So you're not really that involved versus I'm the first person in office every day. And like, you know, I like leaving last, etc. And you do two Barry's boot camps, workout classes every morning, you told me at six and 7am.

10:18Yes. And then I rush to the office. Honestly, at this point, I have employees that really do try to get there before me. So sometimes I lose to like one or two employees because I take too long in the shower. But that's a good sign. Yeah. Right. Yeah. Because I do think that like, you know, our most driven employees, they want to be like the first in the office and they want to show like, hey, look, I'm here before you. But if you're like, you know, the CEO that's getting in the office at like noon, like your employees are like your best employees might be getting there like 1130. I don't know.

10:49because I really do think the CEO sets an example, right? Like how many hours they're working in a day. And how many hours are you working in a day on average? Oh, man, way too many. I'm also incubating a few companies. So I, and I think that's also the beauty of AI. AI has really, I think AI is making people work harder, actually, because you constantly have to like, yeah, because you have to be awake for your agents to be running and on your laptop, right? like there was last week yeah I think it was last week I worked a 26-hour day because I refused to go to sleep because I was like oh my god I have been awake for 26 hours I literally like it reminded me of my hackathon days because I was just on Claude like so the possibility for productivity has grown so much yeah there's an incentive to stay awake and see how much exactly yeah like I was like I was determined to stay awake looking to new shipping codes so I was like, oh my God, I need to like, I just need to be awake.

11:48I've got two kind of quick fire questions for you. What skills does a founder have right now that makes you want to invest in them? And what makes you want to hire someone? So let's start with the founder first of all, similar, but slightly different. Yeah, I think with a founder, the best thing you can have is talent detection and sales, because you're always going to be selling to your employees to stay at the company. You're always going to be selling to new hires to join the company. You're going to be selling your customers to continue to gain new contracts. You need to sell to your customers or retention, et cetera.

12:15Like sales is by far the most important. You need to sell to investors to invest in your company. But I think talent, like the people in a company make the company. There's a saying that like, you know, A players hire A players, but B players hire C players. You never want to get to that point. So being talented yourself is really, really important and knowing what you're not talented at, but having a network and understanding like, okay, I don't know anything about finance, but like this person does, and I'm going to like sell to them to help me hire the best finance person and like the tech talent.

12:45Because I think this is hard to do if you're not a good engineer. At the end of the day, with the tech company, your engineer is the most important thing. And you're an engineer by training, right? By training, yes. That's the version of where you are. Yeah, and I think that I'll be the first one to say I am not the best engineer. I went to Carnegie Mellon, number one CS school, but I wasn't the best at Carnegie Mellon. I would say I was very average at Carnegie Mellon. But I was very good at design and product. That I'd be willing to say I'm one of the best at. and I think that being skilled in both have allowed me to understand who's better than me and like really be able to hire people that I'm like okay like I admire you and like I have a really good baseline for what's good right but like I really look up towards people that you know did like competitive programming because I will never be that good.

13:35For a long time and I mentioned this earlier on you were the youngest female self-made billionaire in the US or globally? I think it was globally. Globally okay that's an incredible title and then you were recently overtaken by Luana Lopez Lara who is the CEO and co-founder of Kalshi. When you held that title what relationship did you hold with it to it? I've held like no relationship at all. I think it's a really good sign when this title is taken away because that means that like women are winning right so when she got it I was like oh my god thank god it's no longer me and then obviously like I reached out to her I was like hey congrats then I was like can I miss Kalshi Can you invest in cash?

14:13Yeah, the answer was no. It's fine. Why was the answer no? They finished a round already. I was too late. I can't imagine you're late for many things, Lucy. Thank you so much for joining us. Yeah, thank you. Today, we also take you back to fame, to fortune in the Hamptons, where Kristen Stoller sat down with the two-time World Cup champion and former women's national team goalie, Ashlyn Harris, for the business of sports. Yes. Ashlyn, thank you so much for joining me here at the Fame to Fortune event. Thanks for having me. It's so, so lovely to be here. So many great people in the audience today.

14:49So thrilled to be here. Of course. So Global Women's Sports Revenue, I'm sure you know this, but it's projected to hit roughly $3 billion this year, which is up 300 % plus 2022 and climbing. But do you think that this growth is sustainable and why or why not? I do think it's sustainable. This is what I'll tell you. It sounds crazy to everyone else besides the ones who've been living it, right? So the athletes, this is no surprise. We have been functioning off of no investment, no infrastructure, no access. And now that we're giving those things, you're seeing what is happening, right? The product has always been there.

15:29There's always been greatness in women's sports. The value now people are just seeing because of the investment. And you had a very historic moment about, it's been four plus years since the$24 million U.S. Women's National Team settlement. From where are you sitting now, on the business side of skorts, do you think that equal pay has actually translated into equal opportunity? Are women given the same opportunities since you started your fight years ago? Oh, my gosh. I mean, it has gotten so much better. I think I would be naive to say it's equal and there's all this parity and equal access and opportunity and equal pay.

16:04No, there's not. There's not. You know, that fight with U.S. soccer is just with U.S. soccer. That didn't trickle down to the NWSL. There are still giant gaps, you know, when it comes to pay equity. I think equality and equity are two different things and they need to be handled as two different topics. I think we're climbing and we're getting, you know, I'm so proud of where we're at and how much we fought. We're nowhere near where we should be. I think it'll take time. And it was such a historic moment. But knowing that, looking back, was there anything you would have pushed for differently or done differently back then?

16:45No, I think we had a team that was bullish enough to risk it all for what we're living right now. I think we are a big part of why this conversation is so electric. Because, you know, it was not popular what we did. And we took a lot of heat from it. It's crazy that even four years ago you're saying it was unpopular. Now it is super popular. But I do feel like a lot of companies and a lot of brands are just jumping on the bandwagon, putting their money behind women's sports because it's cool now, but not actually doing the work. How do you think about that? And how do you advise brands who say they want to do it but aren't actually putting in the dollars and the money behind it?

17:26I think alignment is always key. What I do know about women's sports is the fans totally understand the brands that are authentic and what they're doing and how they show up in these spaces that are very community heavy. I don't think brands will make it just by checking a box and slapping a logo. it's it's these women have these these fans and this community we've cultivated over the last probably 20 30 years based on what league um there's just there's there's no room for bs anymore right there there's just not and fans see it you know right now in this current landscape you have to really be truthful with your values and your consumers really have to trust you and I think brands now are understanding that and it's especially in the WNBA as you know like they're very value heavy so brands have to understand that to buy into it and fit that alignment if not they will get eaten up and that is just fact so Ashna thank you so much for joining you thanks for having me high net worth high stakes high security the former FBI hostage negotiator, author, and CEO of the Black Swan Group.

18:49Chris Foss is next in Anatomy of a Deal. So Chris, thank you so much for joining us here at Bain to Fortune. So you are the former lead international kidnapping negotiator for the FBI, a role that you worked in for about seven years, a fascinating role, I imagine. Very complex. A lot of syllables for that. A lot of syllables in that title. I would imagine that you rarely have full information when making high stakes decision. What message would you give to business leaders watching about how to make big calls if you're not privy to the whole picture? Well, you're never going to be privy to the whole picture.

19:25So just know the difference between your fear and your gut. And then say to yourself, what's my gut telling me? I actually just say that. Your gut instinct is really good. Your fear instincts are almost always off. So if you can just shift, your gut's going to do a really good job on the data and literally say to yourself, what's my gut telling me? And then go with that. When you're seasoned to business leaders who are reading your book, what's the most common thing that they ask you for help with? Well, most people, when they get into negotiation, they want to say, you know, how do I say it better?

19:58How do I be more eloquent? If you're explaining, you're loosely. How you really get the upper hand is to actually listen or comprehend. The person is listening. Now, if I'm listening, whatever I'm curious about, I'll guide the conversation however I go, because you're going to want to talk about what I'm curious about. So I'm kind of like an Australian sheepdog. I'm actually guiding you, but you think you're leading the way. So you spend a lot of time talking to leaders across sectors. What are a couple of traits that today's most successful is the seed of common Comet? I think it's two things.

20:34I think, first of all, they actually listen to their people. Their people feel heard. You'd be shocked at how willing someone is to take a completely direction from what they want if they felt heard in the first place. And great leaders make their people feel heard. And then the other thing, I wish I could remember the gentleman's name, CEO of the videos. Jensen Huang. Yes. He was talking recently about when he makes a decision, his people aren't surprised. So he starts communicating his thought patterns early. Hey, I'm thinking about this. He's soliciting feedback, but he's also letting people know where he's going with his mind.

21:11So that he said, when I finally announced the decision, my people say, what took you so long? Well, that's a guy who's very inclusive and he's not shocking people with his thought patterns. So it's kind of a two way street. You make them feel heard and then you let them hear you before you make a decision. Russ, thank you so much for joining us. The pleasure was mine. That's it for Fortune Daily. I'm Ellie Austin. Thank you for watching. Please remember to like, subscribe. It helps other people find the show. Have a great weekend. I'll see you next week.