E236: How the Top 0.1% Founders Build AI Companies

0:00HF0 is a new way to build companies. What makes you think that companies need a new way to build? A couple things are true. One, with AI, competition has just intensified so much. And what you need to be willing to do, what you need to be willing to sacrifice as a founder to win, is just the bar is way higher. um the second is that it's not really a new way of company building it's the way that some of the the most generational companies um have done it early on um so facebook had their house in palo alto more recently devon or cognition they had their house in atherton and i think really we're just the first folks to figure out how to productize this way of company building which happens to be incredibly relevant in the age of ai this like residency format where you and your team are all in.

0:53This is, I think, when you look forward five, 10, 20 years, this is just what it's going to take as competition continues to grow. So you're now in your 11th batch. So tell me about your 11th batch. Yes, we still only work with 10 teams at a time. And this batch is crazy. To give you a sense, one team walked in on day one of the batch with seven mil ARR already coming in. Another team walked in the first morning of the batch already had a term sheet for 10 and 100 for their Series A. And so just to give you a sense of like the quality of teams that are joining HF Zero, a lot of these teams are repeat founders.

1:28Many of them have built billion dollar companies before agree their previous startups to 100 mil plus annualized revenue, or they're just like actually already breaking out. They've already raised the seed. They've already raised the Series A. And those are the companies that realize the importance of this way of company building where you pretty much subtract everything from your life so you can just build. And they realize they need to get every edge they can get. So I'd say, well, HF0 is really helpful for startups who are at that zero to one. The startups it's most helpful for are actually startups that already have a semblance of product market fit and know that they're going to have tons of competition and need to run as fast as they've ever run.

2:05So we're taking, you know, already the most productive human beings in the world, most productive founders who have isolated their life and their productivity and everything to get like as much leverage as possible. And then realize that with HF0, they could get even more.

2:21and hf0 is based on this principle of addition through subtraction that your value is actually taking away things from founders lives double click on that what exactly are you taking away i wouldn't even call it addition through subtraction i'll just call it subtraction um so pretty much in hf0 it's a residency so you actually move into the residency um and that's really important because what it allows us to do is it allows us to witness you in like a deep way it allows us to essentially watch how you're spending your time what's ending up interrupting your flow? What is taking up mental space for you that isn't the most important thing in your business?

2:54And we have this kind of mantra at HF0 where we say the most insidious distraction isn't a conference or networking or this or that. It's actually the second most important thing in your business. And so by moving into the residency, we can end up witnessing how much of your time and how much of your energy is going not just to the mundane things of life that might interrupt you but second third fourth fifth sixth seventh eighth ninth most important thing in your business and what we find is like a lot of the best founders they're incredible at doing a lot right and so they're crushing it on all those things but actually what we're able to help you do in the residency is subtract even number seven eight and nine even all the way up to number two even all the way up to what you thought was the most important thing in your business and then through this kind of line of self-inquiry when you ask yourself is this the most important thing I could be doing for the business right now.

3:42You get to that most, what you thought was the most important thing. And in that space where we've subtracted everything else out, you ask yourself that question and you realize, hmm, maybe this isn't the most important thing right now, but I don't know what is. And then in that space, that is when you have realizations. That's when you have breakthroughs at a far higher rate than you would otherwise. It's so easy to keep yourself busy with the things that are important in your business, but aren't the most important thing. and only in that space when you kind of had this recursive subtraction that we help you do do increase the rate of realizations considerably and this is why so many founders say they're able to make a year two years of progress in the 12 weeks of hf zero is that really at the end of the day um in an early stage startup you know this this isn't a perfect frame but there's really two things there's your rate of realizations and then there's a there's your ability to grind on those realizations and now with ai your ability to have a realization and then act on it is faster than ever, right?

4:41And so if you have clarity, if you have a realization about your business, about your customer, about the way that you sell the product, you can then go act that out way faster in the world. And where it might have been where you have a realization, then you need to run a two-month experiment. Now you have a realization and you might be able to run an experiment in two weeks or an age of zero. You might be able to run that experiment in two days and then have the next realization that you're acting on. And so actually the speed at which you can build a company in this day and age of AI is just unbounded.

5:11It's really only bounded by your rate of realizations, because then if you're effective at leveraging AI, you can almost have the AI grind on your behalf and then be testing the next thing in your business. Said another way, in the age of AI, the most valuable thing for a startup founder to be doing is to be thinking and working about the next problem to solve. And steady state for most founders are having a lot of distractions that keep them from some would call flow others would call it deep thinking give me very practically so hf0 what are the one two three or four things that they subtract from founders lives that make them have the ability to be in flow and think more deeply i would say these aren't really distractions it's actually like convincing you as a founder giving you like the clarity to see that this thing that you're spending so much of your time and energy on actually isn't the most important thing in your business.

6:06That's like the biggest thing. It's we take care of, you know, now we have a list of maybe 150 mundane things of life that could be an interruption here or there. But I think the truth is, or at least our hypothesis is that there's this compounding return to uninterrupted flow state and that where even the most productive founders in the world get their day down to the place where there's, you know, maybe three, four, or five interruptions a day to their flow. At HF0, our goal is to get that to zero or one interruptions per day. And so our belief is that literally like any context switching, like it could even be ordering DoorDash, ordering Uber Eats, like even having to think about what you're going to go eat can interrupt this compounding return of your flow state.

6:53And I know that sounds trivial, but actually the biggest wins aren't even that. There aren't these mundane things. It's actually getting you to stop context switching to that, you know, second, third, or fourth most important thing in your business. So it doesn't look like a distraction. It feels like something that's really important. In fact, it is. But for the 12 weeks of HFCO, you're actually suspending yourself into this framework where you're explicitly not going to do the fourth most important thing in your business. and it might be scary not to do that because you're like i need to do that for the business to function but in the space that you create when you stop doing you know let's say that you're a company that's that's doing both enterprise sales and then also a plg motion when you stop doing one of those two and you go all in on the one that you actually think is the most important thing you get way more leverage out of your time because there's nowhere to escape and i think this is the like human nature aspect of this the best founders are all like super productive it's not like they're dilly-dallying around but they're incredible at escaping into the third most important thing in their business when the first most important thing in their business might lead to them realizing that the business doesn't work or that they actually need to change what the business is and i think all of us have this tendency like a lot of founders probably listening to this thinking um like oh i would never you know do that i would always face the challenge only has like limited reserves to like face really hard um kind of open-ended challenges in this way um and then when you're in this hf0 format and we're able to witness you with such clarity we're able to essentially call you out on on something where you might say no this is the most important thing but we've already seen pretty clearly i don't think it is i think there's this other like we don't know exactly what it is if we could tell you that would be the best we don't know exactly what it is but we're like there's something over here that's not that thing that's actually the biggest thing holding your business back.

8:42And even if you grind unlimited on that thing, you're still not going to get fully where you're trying to go. And so that's more of what it looks like. It's this kind of line of self-inquiry that we're assisting you in and figuring out what the most important lever is in your business. And then once we find that, startups just like, take off. We had a team in the last batch. They came in with like 500K annualized revenue. They ended up figuring out this most important thing, this one lever. and they grind it on that nonstop. They've worked 20 mil annualized by demo day 12 weeks later. And like every batch, this is happening.

9:16So if you can come in and just like fully lean into the kind of framework that we have for company building in this residency, it's the amount of leverage that you get in 12 weeks is crazy. We're just consistently, every batch, even though we only work with 10 teams, every batch we're having teams that are having this sort of like crazy AI breakout revenue that everyone's been talking about. And I think we're the only folks who've really figured out how to do it in a repeated way. There's something deep psychological about what you're saying, which is people avoid the number one thing. They distract themselves, which is interesting because in many ways, founders are the most effective, the most effective group of people on the planet.

9:50You could argue our founders. Some people disagree with that, but they're certainly in the top 1%. And even they're avoiding the main issues. It's such a human thing that even the most productive humans have to do that. and what's upstream of that i think they're avoiding it for two reasons one is they don't have enough psychological safety in other words if they had a billion dollars and they had a burn rate of a million dollars per year they would be more empowered to look at whether they should be building this business because they'd have another 999 would they would they go or or would they not have as much pressure would they actually be working on number 10 11 12 13 14 15 16 i actually i don't know is there a golden ratio there so you bring up a really interesting point is there a golden ratio of the right amount of pressure somebody should feel in order to work on the most important tasks i'm not sure the best founders are all just so intrinsically motivated that as long as they don't get distracted by the ideas you might have if you had like way too much funding i think the funding actually doesn't make that much of a difference and right now with ai like the funding isn't the bottleneck the cash isn't the bottleneck when you're in an early stage startup and even like some of the a lot of the teams we back already have one two plus middle annualized revenue like yeah cash isn't really your bottleneck your ability to have realizations and then and then act on them in your business like with ai it's just so cheap to act on so many of these realizations um you don't need to hire a bunch of people and so you know i saw sam altman recently on tbpn and i think he's incredible at doing this at stopping doing you know the fifth sixth seventh most important thing and focusing on the first most important thing um i think as Jordy asked him, you know, how do you decide where to devote compute to, to Sora versus to research, to this, to that?

11:30And he said, I'm not even spending my time thinking about where to devote compute to anymore. All of my time is spent finding more compute. And so when I heard that, I'm like, that's such a good example of this, where Sam has realized he could have been getting gotten, you know, the second most important thing in the business, very important at OpenAI, deciding where compute is allocated. He could have been spending all his time thinking about that, right but then sam's incredible at this move of like let me stop doing that let me delegate that and then let me go after kind of the even bigger lever which is just let me break out of that game and just like how do i just find us more compute and then like within that problem later on in the interview he says you know really it's it's not even like the the chips right now it's like just energy where do i find my next gig a while um and so that's where you really get these ai companies that are just breaking out like crazy.

12:19And I think some folks have individually figured this out. And then we've really productized this formula. I think that's why more and more investors after they already do the seed round or the series A of the company are actually starting to send their startups to HF0. And so a lot of people have been asking like, who do you all feel like you compete with? And I actually don't, I feel like we're actually incredibly collaborative. You know, we take 5 % up front or if a team doesn't need the cash at all, we only take 3 % of the company. And so even if they've already raised their round, And we still have an incredible product at a very fair price that no one else is really offering founders.

12:51And it's really this way of company building in the age of AI that's producing so many of these companies that have breakout revenue. And it's this constantly, essentially this recursive subtraction, we're constantly subtracting things out to focus on the highest leveraged thing. And then you're leveraging AI to then go act on that realization as quickly as humanly possible. I want to double click on the example that you pointed out with Sam Allman. It's so good. There's a couple of things I want to unpack there. One is him allocating compute within OpenAI could actually have pretty dramatic changes, 20, 30, 40%.

13:26But he's focused on compute itself because that could have a 10X. And then even that's not enough. He's going to the energy. If you could create, if you can invest in nuclear and get US policy to change, then that could be 100X. So yes, he's giving up 40 % on the micro, but he's essentially capturing whatever that is, 60X, on the macro. That's such a good example for that reason. Also, it's such a great crystallization of what you guys do because that's actually his number two issue is how to allocate compute. You guys focus on five through 10, but it even works at the most extreme counter example, which is between one and two.

14:03That trade-off could be an order of magnitude. That's why we say the most insidious distraction is the second most important thing in your business. Founders are so good at grinding. They're incredible. I mean, to get an hf0 is incredibly difficult now like every single one of those founders insanely good at like grinding on whatever is at hand and so the real key is is that you're pushing on the highest leverage lever that same example is is a perfect uh exemplification of this but this is why i mean this is why like one in three teams that join hf0 break two mil annualized revenue in 12 weeks this is why every batch we have a team going from 500k to 20 mil annualized or from you know 1.8 mil annualized coming into 10 mil annualized because you got to be focused on those 10x levers nowadays and and look like there are other ways to build a company that aren't wrong but um but if your competition's doing hf0 and they're 10x thing um that's that's going to be a challenge and that's where we're getting to in the cycle where the competition is just in uh intensified so much where if you're not thinking in this 10x way if you're not thinking in this 100x way someone else is and they're going to smoke you they're going to just blow right by you and just to give you some of our secret sauce at ways for capital me and my business partner we meet on the weekends to handle this what we call game selection what game are we playing what is the number one thing we could be doing because on the weekends you have more energy you want to be focused your highest energy resources at your highest energy task one of the reasons i'm assuming people people avoid the number one problem is because it's the most difficult problem and they go for the slightly less difficult or else i guess by nature they would be doing working on the number one problem i think this whole thing is bottlenecked by by realizations and then these it's it's it's a very subtle thing um these realizations are also it's it's you need to be talking to your customer getting the truth about the market that's one aspect of it but then you're right in that there's some fear um that's also covering it but it's it's much more subtle than that um and so that's where i think this subtraction where you're not even there's nowhere to run to and you actually can end up as a founder just sitting and thinking not forever you can't just like spend like you know two years thinking but but when you actually just kind of roll up with this recursive subtraction there's nowhere to run from that fear often that's where it's sitting and it's often because it's a realization that might mean that your business doesn't work that you need to go like grind in some direction where you might realize that this like picture that you got excited about and attached to of like the story of a certain business needs to shift and like that's painful that you actually and we see it all the time in hf zero that you know like you might have a team of eight to 12 people and actually you need to let half of those people go because they're not the right fit for the direction that company actually needs to head and so it's these chiropractic adjustments to the company that are um often quite painful um yeah and you've you're on your 11th batch presumably over 100 companies what percentage of the time i'm guessing it's zero but what percentage of time can you not pivot into something the smartest founders there's just so much greenfield there's so much opportunity in this age of ai that like even if in the middle of the batch they realize they need to start from from scratch some of like the teams that really take off like almost completely adjust course um but now now we've gotten so selective that you know more and more of the teams already know the direction that they're headed coming in um they're already kind of like seed series a companies um but you can just move so quickly now you know like you see these companies who are like you know zero to 10 million zero to 30 million zero to 100 million in like a few months those opportunities still exist right now and they're like ripe for the taking if you have clarity in mind you're having a high rate of realizations you can like really take off right now even if you have to change course in the middle of the batch david deutsch famously in his book beginning of infinity says that there's no there's an infinite amount of innovation because innovation innovates on itself the odds of a founder and a strong team not finding an area to pursue with enough forethought are close to zero.

18:01I mean, a lot of the mistakes I've made as an investor passing on founders who seemed exceptional, but the direction they're heading didn't quite make sense to me. And then a lot of those founders that I passed on for that reason in the past ended up building incredible companies. So that's like, you know, something I've just learned over and over again the hard way that, you know, at least for us and the way that we invest on a spectrum of like thesis driven to people driven, we want to be completely people driven and back the best founders, the founders that we think could be, you know the public cc uh public company ceos of this ai age um and i've just seen that play out so many times now um and i do think there's there's this like relatively infinite green field right now where even if the models stopped improving there's actually just so many applications that haven't been commercialized yet that people haven't quite figured out the area under the curve leading up to AGI.

18:54Like I know a lot of people are like, oh, once there's AGI, is that just going to wipe everything out? Like in our, you know, in our internal memos and stuff, we talk about that. That's, you know, there's some truth to that. But the area under the curve leading up to that point is just going to be the most dense period of like value creation ever known to mankind. I mean, really, I think exponential in a way. And I'm so excited to be a part of that. I think so much of what we're doing right now on Silicon Valley or so much of what we're doing at HF zero is bringing that to the world. How do we take this like incredible innovation, like you're mentioning and innovate upon it?

19:32There's just so much that we can bring to the seven, eight billion people of the world in terms of value from this. And I'm actually, you know, a lot of people give open AI shit for not being a nonprofit anymore and this and that and the other thing and not being open source. But like, if Sam hadn't done it this way, all this like AI stuff might be like stuck in enterprise contracts that Google was like doling out and had some like long certification process for. And, you know, maybe we would have had safer AGI when it came around. That's a fair point. But the way that it's playing out now and because of the path that OpenAI charted, we really have this opportunity to bring the value of this technology to everyone in the world.

20:11you use this term the compound return of flow state so flow was was a term popularized by michael i can't pronounce his last name very difficult last name in his book flow and it's this idea that once you start working on something at some point you're in this flow it's kind of like being in the zone in basketball and everything's clicking you're moving fast and you've taken this to the next level you believe in the compound return of flow state give me an example of that and what does that mean exactly so so the clear examples of this are actually when you need to build hard technical things so when you need to build something that's like really hard in software it might be scoped out to take like six months two years to build out but if you could actually i mean i experienced this in my own cs classes when i was first starting to code if you actually can like isolate yourself away where there's literally nothing else going on in your life other than building that thing and then you have uninterrupted flow state where like when i'm saying uninterrupted flow state really at hf0 our goal is like we think the most productive if people get it down to three to five interruptions a day, we want to get it to zero to one interruption per day.

21:12If you can stitch together multiple days where the context of a system is just fully loaded in your brain and nothing has pierced that, and you can end up, you know, you code until you go to sleep, then you wake up and you're back coding, and there's just nothing that interrupts that flow. We've seen founders in two weeks build the system that they thought was going to take them six months or a year plus and these are already the best engineers in the world these are like crazy cracked engineers um and they just like they come out of the basement of hf-zero and they pop their head up and they're like i haven't seen i haven't seen outside for i don't even know how long i haven't even been up from the basement i've just been like sleeping down there but it works and then they show you and you're like what the fuck and it's almost like Like they got like a beam from some alien civilization or something that just like delivered this code to them.

22:06But really it's that they were able to stay in an uninterrupted flow for like two weeks straight. Those are really special. And it takes a lot, like even within HF0, it takes a lot to be able to do that. For example, like Open Router started, it's a company that started in HF0. Alex Tala did the batch, his co-founder. Lewis couldn't get a visa at first. um so he came in a later batch and ended up essentially like joining that batch and we essentially did two batches lewis was just like in he was just so cheery he was just in such a deep flow state for like a week or two in the in the basement hf0 and uh they had like a lot of scaling challenges because things were growing so quickly and then he came up and he still hits us up sometimes and is like hey can i just come back to the house and work out of the basement and like i don't even need a room i'll just i'll just sleep down there and just like be in constant um i think just so many of the of the top technical founders they've tasted this before they've experienced this before um especially early in their careers especially you know when they were getting their first company off the ground and and it's something that as a builder you just like yearn for um because you know people talk oh is 10x engineer real is 100x engineer and those engineers like what's happening is they're dropping into this deep of a flow with these compounding returns where like usually in like some continuous flow they're like birthing you know their life's work I almost call it, you know, it doesn't have to be religious in any way, but it's almost like the Holy Spirit is flowing through their fingertips.

23:31They've almost, as a human, gotten out of the way and they've tapped into something greater than themselves and that's flowing through here. But then if you're interrupted, you lose connection with that, you know? And it's not the same. You can still code. You can still build. You're still really smart. But when you're tapped into this, like, other thing that's flowing through you, that's where there's, like, infinite energy. and that's where you can build 100x faster than you can any other way. And so we actually had one of the heads of one of the top endowments. When he heard my last podcast, he asked me to grab breakfast.

24:05And before I could even sit down, he said, you know, Dave, I get what y 'all are doing because I'm a jazz musician. And in jazz, you know, the best solos, they don't come from, you know, just years and years of preparation. They actually come from this other place. And what y 'all have done with HFZero is you've created the conditions where people are able to tap into that other place, wherever that is for them, and not get interrupted, not get broken from that other place. They're actually able to, in the 12 weeks, stay in connection with that other place and be building from that place longer than ever in their life.

24:39And I also think of it kind of like surfing in a way. Like you surf, you stand up, you're up for like two seconds, maybe seven seconds, maybe 12 seconds. It's great. And then every once in a while, I still remember I was like in Taiwan, every once in a while you catch a wave that never ends. And it feels like that one wave. If you added up all the waves that you'd surfed for the past like three years, it wouldn't even add up to the joy and the pleasure and the amount of time that you got to spend on that one really long wave. And so I think similar to how surfers are all chasing that wave that I'm talking about, that I can think of that one way for me, I think the best hackers are chasing that almost wave of connection to their flow.

25:24And that's why they love HF0 so much, because we're able to create the conditions where just we've pretty much productized being able to drop into that zone of your life where really where people birth. That's that is where I believe people birth their lives work from. And I hear you on the wave, surfing that wave, just like I either in solo or with my business partner, we might have three, four hours of just this epic flow. Why does flow compound from day to day? Why does this two week process work versus 14 days spread over two years? If you could theoretically do that, would it add up to the same or is there this compounding from day to day?

25:58And why is that? it's not even close it's because like when you're i don't know how much software you've written but when you're building software you have like this whole system like this context loaded in your brain and it's like building up over time and when you have that full context loaded it's so much easier to to build on top of it's so much easier to add things it's so much easier to get things to work and then when you have to reload that context every time i mean i experienced this when i go back to you know we have like internal hf0 app that that i've built that i've picked up over and over again over time, like that first two days that I spent building it, you know, the type of thing that would have taken me 10 minutes to build then with all that context loaded might take me like two hours to build now.

26:38It's really like an order of magnitude difference. And so that's the key. I'm curious how it translates to things beyond software, but I think it probably translates maybe even more there. But certainly in software, it's just so critical to have that continuous context. I've done some Ruby on Rails apps, but I'm by no definition a software engineer on any level. The way that I'm thinking, the way that I would put what you're saying is you're in a shower, you're thinking about something, and this brilliant idea came up in your head, and you need to go and write it down. If you wrote down 10 % of it, and then later in a week tried to write another 10%, it would not be as brilliant as it was when that lightning struck.

27:20fuck that's such a good analogy for it because like but to write down these types of shower thoughts these types of realizations you actually can't write them down that quickly you end up needing to like maybe spend four days straight acting on writing that and then if you lose connection with that that realization and that's what i'm talking about these realizations where then you need to grind on them like that's exactly what i'm talking about you have this thing that you're in connection to i call it like you have your felt sense of the thing and then if you're able to just like actually write it all out while you're still in connection with that felt sense of it it's it's not even just that it's faster david it's that actually the quality of it is way high like you and when you talk about building like a delightful experience for the user that actually inspires delight they actually there's so many these ai tools that they use once they use twice they maybe like buy the contract but they don't end up fully using then the best ai tools become part of your workflow and you can ever imagine going without them um and we've gotten incredible at filtering for this like this is one of the biggest things we look for and we have had almost probably almost 40 000 teams now start the application for hf0 and so we're having to go we only back like 10 teams at a time we have to go through like a ton really what we like have gotten world class at filtering for is the quality of ai revenue because you can actually look in and see before you have you know churn numbers and retention numbers to look at because the company's breaking out so quickly there's these ways these usage patterns is these ways that the customer is using these ai products that just tell you so much about how entrenched it actually is going to end up being in their workflow versus being like the next thing that they just have that they're just trying out um an example of this is chat right so like you know some ai products if someone's using it like 10 times a day that's like holy shit that's incredible it's the best usage pattern we've seen for that type of product for chat for example people do tons of messages to chat gpt every day and if they're sending 10 messages even if they're sending like 10 messages a day if they're even sending like 100 messages a week for chat that's actually not that much and so we've gotten like really dialed into seeing the kind of deltas across like different ai interfaces and stuff of what are actually the usage patterns where someone's really using something versus like like they're actually just having fun chatting to a chat bot and they're like testing it out and it looks like a lot of usage but it isn't and and when you're tapped in this felt sensor that's where i think founders in this age of ai are able to make the types of experiences that just become entrenched in in not just someone's workflow but it's really almost like an extension of someone's being it's similar to how our cell phones have become almost an extension of ourself as humans some of these you know chat gpt for a lot of people has become almost like an extension of their brain um i have a friend who's like researching how the existence of chat to pt and and llms changes the way our brains fire um and it's it's actually that entrenched when it's done well is that instead of going to reach for this co-worker we go reach for this ai tool when it's actually entrenched and so that's the the the types of things that you can create only from this really deep place of empathy with your user and of like a felt sense of what what needs to be brought out to use another metaphysical word i would say those products have soul the product i thought yeah it was superhuman i don't know what it is but you could tell they're trying to solve my problem and it's just fundamentally different than somebody putting up a list of specs and somebody executing technically on these specs without really having empathy with the user yeah and trust with the user is just so critical i mean like there's constantly going to be people saying you know you're using superhuman oh should you check out like this new tool that new tool this that the other thing um you know So Fixer is one of our top companies right now, and they have the best AI email tool.

31:09And people are constantly, oh, why don't, you know, to their customers, why don't you go try that email tool? But people just trust Fixer because they know that the way that it's being built is, you know, those founders spent seven years before this building the best EA agency in the UK. And they have like years and years and years of training data as an advantage over everyone and empathy with the user over anyone who's competing with them. And of course, there were so many competitors in the space and they're just dominating everyone. It's because of this. And then another part of it is because their users trust them.

31:39And instead of constantly switching tools, they're just like, no, I just fixer is going to keep delivering the delightful experience that I need. The gold standard for this is obviously joining HF0, being in the basement and going into monk mode within the program. So for those looking to implement HF0 Lite into their life, what are some practical steps that they could do in order to have more flow in their life? The exciting thing is that there's not just HF0 now. There's a lot of other residencies that are starting to emerge. And I really think it's going to end up being the whole next wave of early stage venture.

32:16I think like residencies, this format of company building could end up eating like 40 % of all of early stage because it's just it's actually the product that founders need at that stage. You don't really need that much cash in the beginning to get off the ground. Look, you know, if you're training your own model at Series B, Series C or like later on in your frontier lab, yeah, you need tons of compute. But actually in the beginning with AI now, your costs are lower than ever. You need less cash than ever. And so I'm actually in El Segundo right now at a residency called Deshipolis. And it's incredible.

32:46there's residencies that are starting up in new york there's residencies that are starting up in europe um and these i really believe these residencies are going to sweep the entire globe and it's really going to change the nature of the way that we do startups and it sounds like this crazy thing like really how many founders are actually going to like move into a residency when they're starting up um i was asking myself the same question two years ago but now you know 60 of the teams we back have kids so founders who have kids are choosing to do these residencies than like actually the set of founders that could be, you know, franchised into this residency we have company building.

33:19I think actually it's like any founder who's sufficiently serious about winning is going to end up turning to these residencies. So, you know, to answer your question, I think they should probably look for their neighborhood residency. The craziest thing about these residencies too is at the end of HF0, the main feedback we get from more than 50 % of the teams is that they actually want more. In the beginning, when I'm selling a founder on 12 weeks of HF0, they're like, whoa, that's a lot. I'm going to leave my partner and leave my family, leave my really nice apartment because they're a repeat unicorn founder or whatever for weeks.

33:49And, you know, at first they're like, no way. And then we talk to them and they meet other founders who have done it. Then they end up joining. But then at the end, they actually want more. That's the crazy thing about this product. So I think what you're actually going to see is founders doing multiple of these residencies where they might do, you know, to shipless and El Segundo. Then they might come do HF Zero in San Francisco. I think some founders might even do like two or three of these. and they might be able to just skip pre-seed and seed entirely and get to that escape velocity of 10 mil plus annualized revenue.

34:15They might be able to skip series A, go all the way to series B with these residencies. And it's going to be such an equity efficient way for them to get off the ground. So that's one side of the answer is actually I'm thinking a lot about how I make sure that we're a responsible steward of this whole residency movement that I think is going to be incredibly disruptive to early stage venture. Now, the second is like setting this up in your own life. A lot of the top founders who join HF0 have actually done this as much as they can in their own life. The one thing I'll say is it takes a lot of work to set this up.

34:47It's way more work than people expect. Like, oh, you can just pay someone to do your food. Oh, you can just pay someone to do your laundry. But to actually get the number of interruptions down in your day is like really, really difficult because even if you like pay a laundry service to come pick up your laundry, that two minutes, that five minutes of even having to go figure out the handoff, like you just stopped the compounding return of your uninterrupted flow. and so if I were a young founder and I was trying to figure out how to do like hf0 light what I would do is I would probably find one of those adam human buildings where the workspace is in the same building as my apartment I'd probably try to find one specifically that has a chipotle and a starbucks downstairs and I would get like a dialed in flow where I'm getting food getting coffee getting to my workspace without losing the context in my brain that where I almost can do it on autopilot where the order i might even build like a little like ai workflow that just sends up the exact like burrito that i want somehow has the instructions that it communicates to the person delivering it or that i walk down and it's like already there and i grab it and i'm just still thinking about the problem i'm solving it's like so valuable to keep that flow uninterrupted and so i would like dial in these processes to like an insane degree um yeah and pretty much the biggest thing that we do at hf0 though is actually just audit like by living with the founders were able to like witness what's actually happening and so as much as you could do that on yourself that would be really valuable but what i might do is actually hire a friend or ask your partner hey can you just like watch how i work for a day or two um and them note every single time you're interrupted from your flow and like for most people if they haven't already optimized this it's it's not about two hours here or an hour there most of these interruptions are two minutes or five minutes or maybe even 30 seconds.