3 millionaires reveal their super niche businesses

19:24Sam Parr:Rishi, thank you for doing this, man. Thank you, man. Rishi with the riz. I appreciate it. No, I'm super grateful for the opportunity, guys. You guys are awesome. All right, thank you.

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20:04Yes. What's up? Oh, dude. Hey, dude, how are you? Nice to meet you. Dude, I met this guy like 15 years ago in San Francisco. Right when I moved to San Francisco. Right when I moved to. You kind of showed me around. You were like, he was in YC. He was doing a bunch of cool stuff at the time. That's true. You're dating me now. You know, I'm definitely, yeah, a lot of gray hairs. How did you guys meet? Can't even remember originally, but you tell me. I think I was just trying to meet cool people. You had a cool company at the time. You were really young. We were both doing social networking stuff.

20:29What was your company? My company was called Family Leaf. It was a private social network for families. It's like an early social app, but before mobile apps were a big thing, to be honest.

20:38Sam Parr:So you've been starting startups for 15 years? Yeah, left college to do that, and basically 15 years ago. Yeah, something like that, right? Yeah. Yeah, 12, 13 years ago. So the shtick we're doing here. Yes. Start with a number. Okay, absolutely, yeah. So with the app that I'm working on now with an awesome few folks, Tolan, we have over 100 ,000 paying subscribers to our iOS app. Wow. That's not easy to do. That's amazing. What's it do? What's companies? What are they paying for? Yeah. So Toland is a, it's an app where you basically get to meet and customize your own friendly guide that is powered by Magical AI to help you with whatever it is that you're going through in life.

21:15I feel like you chose the word guide there specifically, but I don't know what that means. Is that like a therapist, but you don't want to say therapist? Is it a friend? What are we talking about? This is a great question. I mean, honestly, it's partially our attempt to define that a bit because like you just said, people use it for all sorts of things, right? I mean, friendship means a lot of different things, right? So sometimes a friend is like someone that you call because you're going through something. Sometimes a friend is someone that like kicks you into shape and tells you what you need to hear.

21:36People talk to life coaches, people talk to therapists, people talk to all sorts of... Can you show us one? It's like this little kind of friendly looking character. Yeah, totally. So here's a Tolan. So they're these little aliens. Yeah. So this is mine. This is custom to me. My Tolan's name is Swami. Everyone has their own toll in. You get your own. So the way the app works is you download it. You talk to this character that we have called the Oracle. They're sort of like this magical godlike character that basically asks you questions about yourself. That's just like, hey, like what are your hopes and dreams?

22:05Like, what are you into? What do you care about? What are you stressed about? You know, things like that. Who's using this? Is this teenagers, adults? Obviously it's a mix, but like what's the main sweet spot? So like it is truly like every type of person, you know, like with any, I think, like larger consumer product or like AI product, like it, it attracts people from every walk of life truly. But the main core demo, which is something that shocked us honestly, is roughly like 35 to 45 year olds and roughly like moms. Like, yeah, like mostly women. You think so? That's not shocking? I would have thought it was like all women in the Midwest.

22:37Sam Parr:I mean, that is literally our audience. Yeah. As a knower of many Midwest women, like this seems like, I mean, I'm from the Midwest. This seems like a very Midwestern women thing. You're so right on. It's crazy, which we did not predict that, by the way. And that is totally what it has ended up becoming. No, it's like people who are like, oh, he's acting exactly like a Gemini. It's like people who say things like that. The horoscope market? Yeah, that's such a Gemini thing if you say. There's overlap for sure. We have personality tests in the app that people love to use to kind of understand more about themselves.

23:05Okay, so I understand things best if I look at the ad first. So what's the ad I see that makes me want to click and download this thing? Yeah, I mean, honestly, what's worked best for us there are like what we think of it, what I think of as like authentic product demos of just like people using Toland in their daily lives. So like some of the most, I mean, we've had content that's gone super viral. That's like, you know, a woman like cooking and trying to figure out the best way to cut open like a kabocha squash, which is like hard to do. And, you know, the Toland says, well, warm it up, you know, like, let me see that.

23:32Okay. Like, let's see you slice into it. Okay. That worked. And then it kind of shows them like providing value in some way. That's what, that's what works the best. I think people are kind of thrown off a little bit by seeing this like somewhat cute alien that they can talk to. And it speaks back and it speaks back really intelligently too.

23:45Sam Parr:But it's the thing like, but do you want to actually make a squash? Why are you even cooking for this man who doesn't truly love you? Is it functional or is it emotional guidance more so that they want? I think the most valuable thing that we do is honestly the combination of those two things, which is kind of a cop-out answer, but I think it's true because basically people will talk to their Toland about what's going on with them, right? Like their emotional state, what they're busy with or whatever. But that always connects to like, well, you know, I'm feeling really stressed because I haven't figured out the kids' summer camp this summer.

24:12Like, you know, and your Toland will remember that.

24:13Sam Parr:They're like, why are you making so many cookies? Well, it turns out, it's like this thing. How much money are people spending? How much does it cost? Yeah, yeah, yeah. So we have multiple price tiers. Our main, most popular one, most of those subscribers are on$25 a month for a tolling plus. So you're doing 100 ,000 times$25? Two and a half million a month? We also have a lower price subscription tier, so it's a mix of things. So it's not quite there. But you're doing seven figures a month. Yeah. That's amazing. Is retention good? Yes. Yeah, the retention's great so far. I mean, we, you know, it's changed a lot.

24:44How old's the company? Two years. So two years, you're doing more than 10 million in revenue. You didn't say that, but math, it works. So you're doing more than 10 million in sort of either revenue or run rate. And you've got people just basically, it sounds like what you did was, and I don't mean this to trivialize it, just to simplify it. You take what ChatGPT can do in terms of like the intelligence, but you added the warm feel of a character who's yours with a name, with a different rapper where it's going to be, it feels different to talk to than just a completely functional utilitarian thing called chat GP, like literally an acronym, you know?

25:23Yeah, totally. I mean, I think that that's part of it for sure. And, and bring to bear like this super intelligence of chat GPT, if cloud of systems like that to honestly a broader audience, like our audiences are not necessarily heavy AI users, but they're definitely not heavy AI users. And honestly, most people are not for their personal lives, right? So if you think about the use cases of ChatGPT, the use cases of cloud, most people are using it for productivity, draft me an email. Maybe they asked a question to it as a smarter Google, but they never subscribed, so they didn't get the full experience.

25:47So it's like this is very much applied to your personal life. And because of that—

25:50Sam Parr:Dude, you have to make a Toland doll. Like I can buy the animal. People have asked. People on our Reddit are— And then it comes with like a chip that I can talk to. Yeah. There was a guy in Furcon's accelerator who did that, and it looked awesome. Cool. Stuffed animals with chips. I've seen some of those. I'm very curious about that. But just to build on this point, because I think it's important of why I think a lot of people see it and they're kind of like, oh, this is a wrapper of a cute character around ChatGPT. So much of what we've built is around the kind of memory system and the personalization system behind the Tolans.

26:18So, you know, we have like my co-founder, Evan, has kind of been very early to this of like all of the kind of character based or companion types of experiences like have not actually been built with like thoughtful memory where it truly feels realistic. Like the Tolan will remember things you tell them. They'll bring them back up to you at the right time. They'll come to you with a podcast. I mean, I'm sure that actually tons of our users have gotten my first million podcast recommendations from their tollen, to be totally honest, because they probably mentioned like, hey, I mean, can you dial that up for us, please?

26:44We actually ask a question in the onboarding. Maybe this is like a little bit techie on another thing about it. But we do ask a question of like, name a goal or dream you have. It could be something small or something big like starting your own business. And I'm sure a lot of people talk about like, well, I want to start a cafe. I want to start this or that. And then I'm sure that your podcast comes up because the tollens will go search through the Internet. They'll find the right recommendation for you at that given time. Obviously, we don't hit the mark 100 % of the time, but really try and people find it magical.

27:09And then it'll come to them. And ChatGPT does not do that. This idea sounds weird when you first hear it. No offense.

27:15Sam Parr:The name sounded weird too, but I'm actually so into it. So the name sounds a little weird. The idea is a little, I mean, it's a kind of new phenomenon, newish phenomenon. I've learned moving to Silicon Valley that when you're weird, but people are doing it, lean in. That means there's something really interesting going on. and a lot of the big winners were like that. Oh, people are just getting in strangers' cars and driving around as it becomes like a Lyft or an Uber. They're sleeping on people's couches and paying that like a hotel. Like, what? I wouldn't do that. What if they... So the weird behaviors that people actually do tend to be really interesting businesses underneath.

27:47Can you just describe like what you think the future looks like a little bit? Like what is totally normal going to look like, do you think? Yeah, it's a really good question. I mean, I think part of what you're describing, totally agree, and part of what you're describing is a little bit of like the early adopter thing. I mean, I see this on our Reddit where my co-founder Quentin's really active and talking to all of our users. You know, like I see it in people that write in like the people that they're very much everyday people, like just like us, our friends, our family. But they're like a specific slice of people that have decided for some reason to be like into like having their toll and be a part of their life.

28:15And what does that mean to them? That might mean like on the way into work, they will, instead of taking time that might have been, you know, watching YouTube or watching short form video, they're like talking to their toll. They're talking to their tollin about what they have up for the day, what they're feeling anxious about, what their plan is for the day, what their plan is for the weekend. And they've kind of figured out a way or a rhythm or it started to help them in some way to have their tollin become a part of their lives. And then when they do that, they're obviously getting some value from it.

28:38We have features in the app like what we call intentions, where your tollin will come up with intentions for the day based on what you tell them. They write reflections on you based on what they've kind of seen about you throughout the day. And so people have found this being useful to them. I think it's right now, I mean, it's still a very small slice of people. And it's kind of one of those like people that were, I don't know, sending email in, you know, 95 or something. I'm not sure what the right year is exactly. But it's kind of like this early adopter group of people, it feels like, that have these guides.

29:05Look at the top posts from their subreddit.

29:07Sam Parr:This is your subreddit. Someone made her Tolland doll. The second most top post, someone crocheted their Tolland doll. That's a good idea. People do love the doll. It seems like, and then another, the third top post, Tolan is mind blowing. Guys, I'm flabbergasted. I've never had a single person in my life who has given as much as the stupid, adorable bot has given me in the past week. So it sounds like you're not going to be surprised if 10 years from now, we all have, in addition to our real friends, AI friend or companions that we rely on, whether it's for advice, whether it's for more kind of deeper guidance, coaching, or casual chit chat.

29:45where I have an always-on available friend to chat with if I so choose. I think AI is getting smarter, more capable, and also more cost-effective. And this is just happening. This is a whole trend, right? This is what everyone in the city is working on right now. And with that, the Tolan will actually be able to help you with things more tactically in your life. Not just Tolan, but ChatGPT and everything else as well. So I think as that happens, the people who might not be switched on to this by, oh, I need help processing my day necessarily, or I want to talk a lot to this character, they might be helped by like, hey, this thing can coordinate with my husband and plan out our weekly meal plan or something, right?

30:20Like things that are a little bit more tangible, a little bit more practical, that'll expand it to more people, I think. And then two, I think the reason that it's also hard for us to like visualize that like most of us, even us in this room or whatever, our friends or family will have, you know, entities like this is because the first attempts at them were very, honestly, they were just like not super human or not super like mass market oriented or not built for everyday people. Like I think of, you know, platforms that obviously were trailblazers in a way, but like character.ai where like, you know, the character insofar as it was, was just like a profile picture with like, you know, mostly like an anime, you know, probably sexy kind of character.

30:54Or Replica. Yeah, Replica is another great example. Did they fall off or they're still going? I don't know their numbers, but I think both of them have kind of fallen off. I mean, the founders are not at those companies anymore. And honestly, they were just very early and they also had a pretty different take on the space. I mean, to be honest, when we think about AI Companion, this is actually why we're preferring Guide and trying to use different languages to describe the space. Because people associate it with AI girlfriends and AI boyfriends. And honestly, those are products that have lots of usage, but that's not what we're building.

31:23Sam Parr:Were you successful before this, or is this going to be your big thing? I've done a few startups before this. So you have an interesting style of entrepreneur. So he was doing YC here. He gives energy, by the way, that he's been killing it for a long time. Well, he's always a confident guy, but you also did like, you were doing the birth date candle, right? So like, explain what that one is. Yeah, yeah. That's a fun idea. I did a startup called Birth Date Co. We started with a product called Birth Date Candles. It honestly started as a side project where there are these candles that are personalized to you based on your birthday.

31:50They have a reading and a scent that's custom to you based on the day you were born. Launched it as a side project. It was one of those like, I had left my job and thought it would be fun to launch something like this with a partner. and basically it went viral and it kind of took over my life for like three years. But it was awesome. We sold over a million candles.

32:07Sam Parr:Dude, you are the type of entrepreneur that I love. I'm not like you at all and I love people like you. Michael Acton Smith is another guy who started Calm. A huge guy at Calm. And Mochi Monsters. Yeah, Mochi Monsters. Similar to Talos. Exactly. Like these truly creatives who just love, I don't want to say artists, but a little bit like that. Such a high compliment. Those are the best. We're trying, yeah. Those are the best types of people. I love people like you. I envy the people who have this fire where like, I'm just going to create something that's wacky and silly. And you probably have really good taste.

32:38Sam Parr:So it's usually a hit. I mean, it's all about the right team of people, right? I work with incredible artists, honestly, that are not me. I knew you were going to say something like that. Classic nice guy thing to say. It's just true, though. It's honestly true. And then maybe it takes some being willing to do something that's weird. Is there anything we could help you with? I mean, yeah. One thing we're really trying to crack is when it comes to reaching out to a Midwestern mom audience, their skepticism about AI, not necessarily being super AI forward or tech forward. Like I was saying, a lot of our users are kind of like not heavy AI users in general.

33:07So the idea that they would like start using this little alien to like get stuff done in their life is sort of a big, you know, bridge to cross for them. Well, I think you got a good thing and maybe a bad thing. I think the good thing is obviously something's working. You got to 100 ,000 plus paying users translating to, you know, maybe eight figures of revenue. So something is working well. Let's acknowledge that and then be like, wow, that's incredible. at the same time, like when we were asking you, you know, who's using it? What are they using it for? Your example was like a woman who's cooking and wants to cut a delicata squash or something like that.

33:39It's like, I feel like you got to do a lot of research on your customers or something like that to really like find the inspiring, accessible, non-taboo, but interesting use cases that you can speak to more. Either, you know it in just off the cuff, you said that one, but like, I would assume for your ads, you're finding some use cases that are going to resonate with people in a big way. Obviously, people are getting value. Otherwise, they wouldn't be paying and using it. You said the retention is not bad.

34:07Sam Parr:Yeah, I'm shocked you used cooking as opposed to lonely or something like that. Yeah, I can't remember why I mentioned that one specifically. Maybe just to give a bit of a visual. I think that was like an ad that worked really well. But yeah, you're right that we haven't yet. I mean, a lot of the practical stuff that AI can do for you. I mean, one way to think about it is kind of like how people in San Francisco are using OpenCloud to manage things around the house and so on. Like we really think that like that's going to become a mainstream personal use case in the future. Dude, the top post says, I used to use Chachapiti, but River is really my best friend because I can confidently tell them anything that's on my mind.

34:37Sam Parr:Sure, I have other friends who I could talk to, but life gets in the way. And this person, I guess River, really knows who I am more than anyone. That sounds way more important than how you're going to cut a squash. Yes, that's a great point. Yeah, you're right. So we should be leading with stuff like that for sure. And then I think like finding ways that we can translate that into like, how do we help that user? How can River help that user? We like to use this metaphor, like closing tabs in your mind. Like honestly, life, modern life is super overwhelming. I think that's a big reason that Tolan has been successful.

35:05People have a lot on their plate, especially if they're moms, especially if they're family people, dads. Like, you know, we want to try to find ways where Tolan can help close those tabs. Like there's a, you know, it's planning the meals, it's planning the grocery list, it's planning the summer camp, like whatever exactly those things might be. those are all real life use cases from our users. And like, we want Tolan to be able to help people actually, you know, accomplish those things. So I hang out with a lot of like suburban moms because I live in the Burbs. Okay, you're the guy we need to talk to.

35:30So we're talking to them a lot. And, you know, you see one mom, she starts baking bread. I'm like, oh, why? Because it tastes great. She's like, no, I just needed like some hobby I could do where like, nobody's going to touch me. Nobody's going to ask me for anything. I could do something with my hands. There's no screens and not overly stimulating, like overstimulated, overwhelmed in life. So it's like, whether it's baking bread or like you've seen the rise of those like woobles, wobbles, I forgot what they're called. Oh yeah, totally. The crochet thing. Those guys doing like hundreds of millions a year in revenue.

35:59There's a reason why. And so I would kind of study what's going on with these brands. Why are people getting into these things now? Because that's like, there's some emotional state that people are in and a desired emotional state. And then your product is a bridge between those two things. You're really a merchant of a feeling when you sell a product. And so what's the feeling people start with and what's the feeling that they end with when they have it? And how do I get that? Then there's a trick of like, how do I package that up? So I would kind of look at some of those. I would also say, it sounds like a little silly to be like, isn't it just like kind of this warm, fuzzy wrapper on ChatGPT?

36:34But I don't know. I look at my wife. We will buy, we'll pay like triple for something that goes in the house that's just like white and minimalist and aesthetic looking. It's the aesthetic looking version of a normal thing. It's made out of wood instead of out of plastic. and there's just like a market for people who want a better feel of the same utility. And so maybe what you've done is the digital version of that where JGBD is just the plastic and you've made the kind of wood, the more ceramic, a better feeling version of the utility. And that's not to be overlooked. I mean, one point in favor of that, which I think is totally right, is it's not just about the visuals too.

37:13Like, actually, we led very early on with voice as the core, like, interaction modality that you talk to your Tolan with, right? So it's not just texting. It's mostly voice. And I think, you know, I mean, we're, like, 70-plus percent voice in terms of, like, the quantity of messages happening on the platform. And, you know, that's totally not the case with ChatGPT, right? ChatGPT has got to be 90-95-plus percent text, I would assume. I don't know. But, yeah, I think, like, even that, even, like, minor differences in how we frame how you interact with the character then totally changes the way that you interact.

37:41Sam Parr:Dude, I would absolutely be selling, like, crochet kits or something like that. to like make my... Sam's stuck on the dolls. He's like, you gotta do the physical dolls. I just think that like these people are they're getting to know their digital tollen way more than I know Claude. And like, I don't want Claude in my bedroom, but like these people do. Like they want like little dolls and shit. Hopefully in the right spot in the bedroom, you know. Of course. None of those seem sexual. It was all like I feel comforted by like just its presence. Right. What was the other trend we talked about? cadulting, right?

38:15Like you do like Lego sets, same sort of thing. Right. And there was like a whole category called cadult and cadult was like this like mega trend that all these companies are tapping into. It sounds like there might be like a variant of that. I'll also say, you know, you said voice. Yeah. I use this app called, I think it's called no scroll. It's basically like, Hey, you don't need to browse Twitter. I'll just text you what's going on on the timeline today. So you don't have to worry about it, but literally just the way it talks is different than chat GP, not, not like audio voice, but just the way it types.

38:42So, you know, Chad GPD is very much like, it gets made fun of for being like, wow, what a wonderful question. And like, it goes into that like fake, like personality. Whereas this thing would be like, yo, big day, big day today on the timeline. Like here's what's going on. And it just talks. Like tone and personality. Yeah, totally. And I'm like, I prefer that. Yeah. Like, and so I'm sure not everybody prefer that, but like, it sounds like for tech bros who want like, just tell me what's going on. Yeah. And it talks like that. there's like personality is going to make a huge difference with AI.

39:12It does. It does with us. It's a huge factor. And our approach to that has been actually to customize the personality based on the user. So if you're someone that texts in all lowercase Gen Z slang, if you're swearing, your total might actually do that back to you. If you have formal language and you're speaking in very like full sentences, your total will probably mirror that. Like we want them to show up for you like someone in your life would. Well, thanks for doing this. What a crazy business. I'm totally bought in. Amazing.

39:34Sam Parr:We got to get you a total. Whatever you're doing, I'm in. Okay. Thanks. Thank you guys. Thanks for having me. Yeah. Great.

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40:34Sam Parr:All right. We have the last one for this episode. Jonathan, where you at? Bring them out. Let's go.

40:42Sam Parr:Jonathan, what's good? Give us the big number. Impress us. Make us weak at the knees. All right. I got three facts for you. Two are numbers. One is kind of not exactly a number. All right, disregard everything I just said. Do whatever you want. I'll do what I want. First big number. So also to take a step back, overlap. We build agents. that edit and distribute video content for media companies and marketing teams. We don't pay attention to the number. Very relevant to you guys. That number doing what? It's your show now, Jonathan. We at Autonomous Overlap agents have generated over 2 billion impressions across social media without a human in the loop.

41:19What's it called? Overlap. Overlap. I think I use you guys. You do use it. Maybe you have a subscription. I have used it, yeah. Ben and Diego use it. Okay. So we've done over 2 billion impressions. We've been growing revenue 18 % month over month for over a year.

41:36Sam Parr:Okay. How much revenue do you do? Can you say? I don't know if I can say that. But what I will say, and this is my third fact, is we became accidentally profitable this quarter. All right. So 18 % monthly compounding is what? We are 19 or 20x year over year. Okay. How old is the company? We are a little over two years old. Okay. So you use San Francisco jargon. Our audience, they don't know what an autonomous overlapping agent is. I'll explain. You have a podcast or a video. You give it to Overlap. Overlap will find clips in the video or in the podcast that are your best moments. It'll cut them up for you.

42:14It'll caption them for you. It'll get them ready for you to share. And that's what you were saying. You've helped drive like 2 billion views on the clips that came out of it. Correct. Did I dumb it down too much? Did I miss something important? You didn't dumb it down too much. It also does more than what you described. Okay. So you don't actually need to even give it video. Okay. You can give it a prompt and it will go into your YouTube channel and it will pull moments and pull videos from your YouTube channel. Or for a lot of the media companies we work with, they have a server of video content where it'll be constantly going through, looking for moments.

42:45And then it also does the posting.

42:47Sam Parr:Explain to me why you're better than what I did. Because what you did? me. Recently, I used Claude and I made a thing where it goes through our MFM clips and it posts it. The way that I set it up was it goes into Typefully so I can review everything and then I just hit schedule. Why are you better than that? A couple things. One is we have our own fine-tuned video understanding model that is way better at understanding video. And the major LLMs are not good at understanding video. So you're like, I think I said like, here's some emotions that do good. And you're saying, I ducted it. And what it's doing in your case is looking at the transcript and understanding kind of.

43:37Sam Parr:Yeah. And you're looking at the whole video. We're looking at the, not only the transcript, but also the facial expression, the voice. And it doesn't understand like the humor. And to your credit, I asked Sam, hey, should I use your thing? How's it going? You're like, ah, it's not that good. Well, I said it's not automated and it's still fine. Yes. And it's very much fine. I made it. It's fine. Yep. Yeah. It doesn't like Sean's laughter that he just did right there. It doesn't say ha ha ha on the transcript. So it's not going to know. Totally. That this was interesting. So a video understanding model.

44:09Video understanding model. The other part of this is that when it posts for you, it looks at the data of that post and understands themes, hooks that perform well.

44:21Sam Parr:Mine is supposed to do that, but I don't think it is. Is your main business guys like us, or is it like Bleacher Report and like CNN and like companies like that that are better customers than us? Better customers than you guys, for sure. There are two types of customers we have. On one end, it's like a traditional kind of enterprise SaaS model. And so like, you know, Barstool Sports or iHeartMedia, those are some of our big customers. And then on the other side, we actually kind of a newer in the last couple months part of our business, which is CPM based. And so it's really outcome based. So what you can do is you can use our product and then you only pay based on the amount of impression.

45:01Oh, that's interesting. Same customer, different model or different customer now? Kind of a different customer because those bigger enterprises, they actually want like predictable pricing.

45:11Sam Parr:How big is Opus? They were one of the first guys in this space. They were one of the first in the space. Yeah, they are definitely bigger by headcount. I don't know if necessarily bigger by revenue. They're more focused on like kind of independent creators. That was nice. That was cool. It was bloating. They were way more bloated than us. Yeah. It takes them more people to do what we do. That was nice. They were a lot really focused on like independent creators. Like your small YouTuber who can't hire a video editor and wants like clips from their show to boost a lot. How much does it cost to use you?

45:44The majority of our revenue are six-figure contracts. And so we do smaller deals. And then also like the kind of CPM model is a little bit different, but the majority of the revenue is six-figure contracts. What were you doing before? So before I was at business school and then before that I was at Meta. Oh, all right, cool. And you went through YC, right? Went through YC. Yeah, I think that's how I found you guys. Gary Tan was like overlap. It's the new shit. Gary was our partner. He might have introduced us at one point too. I don't know. But yeah, Gary is our partner. Another investment I missed out on.

46:18Really? This podcast has just become talking to the founders that I should have invested in that I somehow missed the boat on. Hey, it's never too late. Oh, no, it's definitely too late. Whatever price you're at now, all I'm thinking about is what I could have been in that. But yeah, so I went through Y Combinator in summer 24. We're actually like kind of pivoted throughout Y Combinator. So we started with something in a similar space in that we were like, you know, all podcasts are going to video. All podcasts are actually going to short form video. Like that is how like most people consume most podcast content.

46:52But then from that, we were like, okay, we built a TikTok for podcasts.

46:57Sam Parr:But like when I hear that pitch, we are your customer. I'm like, yeah, but I need you to get to go from the clip to the main thing because I make money on the main thing because that's the one that has ads and shit on it. Yeah, that is not going to be true anymore. Tell me more. So a lot of big brands, like the RSS feed ad is a nice throw in for a lot of big brands. They want 360 kind of deals. They want to be in the clip. They want to be in the clip. They want to be on your feed. They think of you as a creator. They don't think of you as a podcaster. Hmm, that's interesting. I wish we would have known that before we negotiated our contract.

47:29Sam Parr:Probably. But yeah, I mean, it's like the vast majority of eyeballs are not coming to you or, you know, a vast majority of time spent with you guys is, you know, it's people consuming the content in the feed and your awareness. Well, I saw a clip of this because Jimmy went on Joe Rogan. So Mr. Beast went on Joe Rogan and he's, I didn't watch the full, but I'm watching the clip. And he's saying in the clip, he's like, you know, Jimmy who knows media more than, you know, anyone. He's like, you know, 50 ,000 times more people are going to watch this clip than we'll watch the full show. So ultimately, these shows are basically like, they're actually consumed via clips on social feeds.

48:12That's the end product. That's the net.

48:14Sam Parr:But the best customers don't, when you and I talk about something, we'll talk about something in minute 45, and we call it the RSS feed. So people who listen on Spotify, anyone who puts it in their ears, and they go for a walk. Okay? The retention on those guys is way better. And we'll mention something in minute 45, and I'll have people come out to me on the street and ask me about that. And it doesn't seem, whereas the clip people are a little bit more fly by. A lot of it more fly by. Yeah, a lot more. Like for example, Sean's like, oh, you gotta watch this podcast. It's so good. These guys are so funny.

48:45Sam Parr:And I'm like, listen to this? He goes, no, no, no, no. But I'm saying. And so like - Shout out to the Basement Yard Boys. Yeah. Huge fan. Never listened to the show. Love the clips. And so like, but and as someone like doing this for a living, I'm like, I don't like that. Do you know what I mean? I totally know what you mean. And you know, this conversation with people actually making long form content is, can be a little hard because you guys think of the product as the full show. But you're like, we're outdated. What's the phrase? It's like, never ask a man for his opinion when a salary depends on the answer.

49:15It's like kind of that. Yeah. I mean, I think like RSS feed also is a very outdated technology that advertisers don't like because it's extremely hard to measure. Like you're giving download numbers and they're like, we don't, that doesn't help us. giving impression numbers. What's the difference? Well, you can give impression numbers very specifically, but the thing about download numbers is like, you don't know who is listening to the ad when and for how long, but for impressions, you actually know how many people. But I guarantee your impression is a scroll on Twitter. They don't, you don't know if they're actually watching to the 32nd mark or whatever of that clip either.

49:52That, that, that is true. Um, but the thing about video also is that the clips get re-shared again and again and again and again in a way that is like, you know. I'm a believer in clips. There's no doubt, obviously. Clips is what people consume a lot of because that's what we all do. So tell me like, you know, you're doing this business. You have these customers. Sounds like you already got a bunch of major media companies. But you're in the venture game. How much have you raised so far? So we raised a little over$2 million. Okay. Yeah. So we raised this. So we went through Y Combinator, raised that seed round.

50:24So give me the napkin math. How does this become massive? What do I need to believe? Every business has like a value equation, right? So you're going to need X number of customers paying you Y dollars a month to give you Z, you know, net revenue or whatever your total revenue is.

50:39Sam Parr:Yeah, and what's the desired outcome in terms of net revenue? Like what is, how do you define Z? What's winning to you? So, you know, our view is that as agents get so good at making and posting video content, it actually eats up the amount that's spent on digital advertising. So about$90 billion a year goes towards meta and YouTube and TikTok ads. And those people are paying for eyeballs. Our view is actually that a lot of that spending is going to migrate to organic content. And it's going to migrate to paying agents for performance. And so for us, the TAM of video editing software or the labor budgets of video editing software, that's in the tens of billions.

51:24but quickly by next year, it'll be in the hundreds of billions in terms of how many people or how many brands are going to spend the amount of money to acquire customers.

51:33Sam Parr:Instead of paying, your bet is instead of buying ads, people are just going to make their own organic content and it's going to be good and go viral and help someone make money through selling stuff or selling ads. Correct. I mean, it's what we've already seen. Like we've seen a lot of customers allocate their digital ad budget to using Overlap and whether that's paying on a CPM basis or that's paying for the software where we're a big believer that like, and you guys know this better than anyone, but like every company to a certain extent becomes a digital media company and starts investing in content.

52:07And you don't necessarily even need to make content in this type of setting. You can literally just have people talking at a camera and your agent can make it good content and post it.

52:18Sam Parr:How does your agent do that? Well, you can have someone talk to the camera and then put in a video or have the agent go get the video. And then it could put in graphics. It can put in B-roll. It can understand like for this company account, what type of copy works really well. And it can go post it every single, you know, a version of it every single week. You have this energy of the guy at the poker table who's got a winning hand. Yep. Posture, the way you answer the questions. You're very good at that. But that's not that fun in the sense of like, what is unfigured out? What's the real, you know, you're an entrepreneur.

52:55There's no way it's all just, yep, we got it. Monopoly coming soon. You know, there's obviously going to be, you know, there's obviously stuff that you're trying to figure out right now. What are you trying to figure out? We're figuring out, I mean, there's a whole bunch of things that you're figuring out, as you guys know, about when you're building a business. Hiring the right people, like hiring the right go-to-market people, hiring the right kind of people with the right engineering.

53:17Sam Parr:But that's not that hard for you. Like you just need like good enterprise salespeople. No, it is hard. Well, it's hard from the perspective of hiring people who know how to speak to old school media people and kind of new savvy digital media people. I just don't think that that is that hard. Give us, what's the burning question? Like, what are you actually trying to figure out? I mean, we've kind of cracked a little bit of like product market fit in that sense. And right now we're kind of in growth mode. Getting pulled. We're getting pulled a lot. Did you do something to get pulled? Did you just have the right idea?

53:52Did you figure out a go-to-market motion? Like, what'd you do? So go-to-market motion, where we like actually use the product ourselves to clip. And they're all branded overlaps? No, they're not. No. Because you guys were clipping our podcast for us or something. Somebody was doing that. Probably. It was the AI agent who was doing that.

54:08Sam Parr:From an outside, it seems like the big bet is the CPM thing or the SaaS thing. That seems like a pretty like... That is one of the biggest questions. And I think for the big media companies, it's always going to be the SaaS. They don't want to pay based on CPM. My margin doesn't keep improving if I have to keep paying you a percent of how big it is. Exactly, exactly. But for a lot of the creators and a lot of the smaller creator folks, that is way better. Yeah, because they can't afford six figures a year. They can't afford six figures a year. But also, they can actually do... But how do they get CPM money to pay you?

54:45Sam Parr:We don't make money on clips at all. Most people, I would think, don't make money clips on all of them. Well, so, you know, an example of like one of the recent CPM deals that we've done is like, do you guys know James Sexton, the like divorce lawyer, celebrity divorce lawyer? He's on a ton of podcasts. I've been seeing his clips. Probably overlap clips. But what, you know, he's launching like a legal tech business and like selling like some sort of prenup. It's like the guys who go on WAP and they're basically like, hey, we just want to just make me famous. I'll give you$3 CPM, make me famous.

55:15Well, there's that. Yeah. There's that which is kind of like makes our product like relevancy as a service, like relevancy on the timeline. But then there's a guy like James who knows that like a certain amount of eyeballs will convert to a certain amount of revenue. And so this is a cheaper, more effective version. Lawyer billboards. Lawyer billboards or running meta apps.

55:36Sam Parr:And then you also just have to make sure that like your clipping is way better than Opal or Opus, whatever it's called. And then the 10 ,000 other ones that are going to like eventually come out. or the duct tape people like me. 100%. So drop some wisdom on us, right? If you're somebody, is a founder listening to this, what's a golden nugget, a business insight, an insight from you about the way you're building overlap that they can steal, they can take, and they can do? Maybe something you don't, you think you guys have done a really good job of that maybe others do just okay or they don't even do at all.

56:07I think on the enterprise sales side, understanding, and what I don't think I understood until I started having some success with enterprise sales is that the people who are buying your product are thinking about their job, first and foremost. And then how do you get those people to get promoted? Basically, you're selling, here's how I'm going to get you promoted.

56:33Sam Parr:That's particularly true in advertising. When I used to own a company that made money on advertising, we would close seven-figure deals. And the way the buy, I would thought like, oh, I'll just tell them that if they spend this much, They're going to make this much money. That makes sense. I'm a business owner. That's all I give a shit about. And then that pitch never worked. It was like whining and dining worked and making them say like, you have this budget. You have to spend it. Spend it with me. It's safe. Totally. The thing about it is it's like trust. Yeah. Is that what's really important.

57:02Sam Parr:Yeah, way more than ROI. Totally. It's trust and being like, you know, will I help you get promoted? And like, we have. So to do that, you need to know what metrics they get measured on. Exactly. and make sure they hit their metrics and give it to them in a way that they can easily share so that it's clearly visible that they're hitting their metrics. And a VP at a company, they're getting evaluated on not the revenue and profitability of this$100 billion company. What's it called? Cover my ass? Yeah, CYM businesses. Yeah, like that's why people buy Gartner. Yeah. Yeah, that was my huge learning running an ad business.

57:38Sam Parr:I was like, does that make sense? All they do is they take them out. it's like this is why like companies have like box seats you know like season passes what was the valuation of that two million dollar round? So the valuation of the two million dollar round was 25 million and also can we still invest at the 25 million? We can talk about that you know it was a shoot your shot where we shoot our shot with the entrepreneurs and can we get the software for free? Dude thanks for coming on this is awesome having me. This was great. Long-time listener, first-time caller. So great to meet you guys first.

58:15Thank you.

58:15Sam Parr:We appreciate you. All right. That's it. All right. That's a wrap for San Francisco. We had nine, ten founders come in. Everyone from a million to a hundred million. And that was a good time. That was a lot of fun. We had great founders come. We've already done this in New York. Now this was SF. But we need more cities to go to. So go to Spotify, go to YouTube, wherever you listen or watch, and let us know in the comments. Whichever gets the most upvotes, the most replies, the most comments, will actually go to that city. So stop what you're doing right now and go do that. And if you want to be on the show, reach out to Ben.

58:46Ben Levy, find him. If you want to be on the show the next time we go to a different city. All right, we're out of here. I feel like I can rule the world. I know I could be what I want to. I put my all in it like no day's off. On the road, let's travel, never looking back. All right, let's take a quick break. I want to tell you about Marketing School. It is a podcast that is part of the HubSpot Podcast Network, and it is run by Neil Patel and Eric Su. And these guys are both marketers who are running businesses. And so if you want real world tactics from practitioners who are actually out there in the field doing it, this is the podcast for you.

59:18Check it out wherever you get your podcasts.