In short
Podcast Notes: He’s Building an AI Media Empire
Podcast Overview
- Podcast Title: Startup Stories - Mixergy
- Episode Title: #2290 He’s building an AI media empire
- Guest: Ricardo Vice Santos
- Company: DreamStories
- Focus: Exploring how AI can revolutionize media, starting with personalized children's books.
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Key Themes and Concepts
Introduction to DreamStories
- DreamStories is focused on creating AI-generated, personalized children's books.
- The founder, Ricardo Vice Santos, envisions a broader future where various media (e.g., TV shows, movies) are customized for individuals using AI technology.
Genesis of the Idea
- Ricardo’s background in consumer media and prior experience at Spotify influenced his understanding of personalization in content.
- The initial thought of generating bespoke content by AI came from his experience with customized songs on Spotify.
Personal Motivation
- Driven by his experiences as a parent, Ricardo wanted to create engaging stories for children that instill values of adventure and exploration, similar to what he cherished in his childhood.
Revenue Model and Vision
- While Ricardo has mentioned past revenue figures around $3 million/year, he emphasizes the significance of supporting a larger vision rather than focusing solely on financial success.
- The goal is to create scalable, customizable media experiences beyond just books, eventually branching into personalized videos and educational content.
AI Technology and Challenges
- The creation process involves generating unique stories and visuals that maintain consistency across multiple character appearances.
- The use of AI presents challenges such as ensuring that images remain consistent and high-quality, which is crucial for children's books.
Key Takeaways
Market Strategy
- Target Audience: Parents looking for engaging and personalized content for their children.
- Distribution Strategy: Emphasis on repeat purchases by creating episodic content that families can enjoy over time.
Unique Selling Proposition
- DreamStories differentiates itself by not just selling one-off books but by building a relationship with users through repeatable, customizable experiences.
Insights on Consumer Behavior
- Ricardo has observed that consumers are actively interested in creating their own content. This has led to the idea of allowing users to upload photos and customize characters, enhancing engagement.
Future Aspirations
- The ultimate vision includes offering a platform where families can create a variety of customized media content, including videos, influenced by personal beliefs and values.
Challenges in Building DreamStories
- Distribution: Leveraging effective strategies to reach and retain customers in a competitive market.
- Economic Model: Ensuring that customer acquisition costs do not exceed the revenue generated from sales, particularly in an auction model of digital advertising.
- Content Creation: Balancing the complexity of AI-generated content while ensuring it is intuitive for the end-user.
Final Thoughts
- Ricardo emphasizes the importance of understanding customer needs and iterating on feedback to improve products. His hands-on approach to customer service allows him to gather valuable insights.
Conclusion The episode encapsulates Ricardo Vice Santos's journey from a personal need to a scalable business idea that leverages AI technology in creative ways. His vision for DreamStories reflects a transformative approach to content creation, aiming to personalize media experiences for families and children alike.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOThe Vision for Customized Content
0:29 to 1:24
Discover the founder's vision for personalized books and how many have been created.
“Ricardo, How many books have you created that are all AI-generated, would you say?”
Revenue vs. Vision
1:24 to 2:25
Understand the founder's perspective on revenue generation versus long-term vision.
“Where in reality, I see that what the revenue we've had is kind of in support of the larger vision we're trying to build.”
Journey into AI Media Creation
2:25 to 4:51
Hear about the founder's background and the thought process behind using AI for media.
“You've got a family And you decided You know what I want to create something What's the thing that got you Started on this story?”
The Inspiration Behind Kid Stories
4:51 to 5:54
Learn how personal experiences inspired the creation of personalized children's stories.
“where people were creating videos and uploading.”
Creation Process of Personalized Stories
5:54 to 8:03
Dive into the technical challenges and methods used to create personalized stories.
“So that was kind of what had this seed in my mind.”
Building the Product and Team
8:03 to 10:04
Explore the collaboration and technical development behind bringing the idea to life.
“I said, this is going to be really interesting for me to create a story for one of my kids.”
The Future of Content Creation
10:04 to 14:00
Discuss the implications of generative AI on media consumption and creation.
“And I think that's actually, that polish is actually, I think, what actually makes it quite substantially difficult to do.”
The Emergence of Personalized AI Content
14:00 to 14:52
Explore how AI allows for personalized content creation and its implications.
“And so they see that, hey, it's going to make Hollywood better because production costs are going to go, oh, you're going to have more content.”
The Shift in Media Consumption Behaviors
14:52 to 16:15
Discuss how new technologies change media consumption habits and expectations.
“I guess what you're saying is, look, the, when the iPhone came out, it didn't stop professional photographers from taking those professional photos.”
Understanding the Family Dynamics in Media
16:15 to 18:58
Learn about the unique buying patterns in family-oriented media products.
“And the reason that you picked children's books from what I understand is you said, what are people willing to pay for?”
Show all 31 chapters
Creating Engaging and Repetitive Content for Kids
18:58 to 21:08
Discover the importance of repetition in children's media and its impact on learning.
“There's the consumer that is actually going to consume the content.”
Expanding Beyond Books: The Future Vision
23:16 to 26:18
Discuss aspirations to branch into various media formats beyond children's books.
“Today, with AI, you don't need a keyword.”
Challenges in Building Family-Centric Media
26:18 to 28:00
Examine the unique challenges of creating media products for families.
“The thing that people will create, the stories they create have multiple characters.”
Challenges in Building an AI Media Empire
28:00 to 29:59
Explore the difficulties in launching a media business and the importance of distribution.
“Let's talk about where the difficulties are if someone wants to create something like this.”
Understanding Customer Acquisition Costs
30:00 to 31:39
Learn about the significance of customer acquisition costs and effective ad strategies.
“And so essentially what I would say is that part is that figuring out, for me specifically, it depends on what you're doing, but figuring out economics is probably the hardest, most difficult part.”
Creating Repeat Customers in Business
31:40 to 33:09
Discover methods to convert one-time buyers into repeat customers through engagement.
“And because the category exists, that means the customer is educated about what they're about to buy, which is a personalized book.”
Subscription Models vs. One-Time Purchases
33:10 to 34:59
Understand the pros and cons of subscription models versus one-time sales in product offerings.
“It was like little pouches that you add into water, mix it up.”
Personalizing User Experience with AI
35:00 to 36:39
Learn how to tailor customer experiences using AI for better engagement and satisfaction.
“Most people, it's the meal of the day that seems to be more boring in a way in the sense that there's less change.”
Exploring Future AI Product Ideas
36:40 to 42:00
Discuss potential future AI products and services that can enhance personalization and user experience.
“buy one time or subscribe and save, then that's when you're confusing the user, right?”
Exploring Customized AI Opportunities
42:00 to 43:03
The discussion centers around potential ideas for personalized AI products and services.
Coaching Tools and Business Customization
43:03 to 44:23
Ideas are shared on how AI can be used to provide customized coaching and support to teams.
“So what would be the second best idea, I guess, that we can think?”
Integrating Notebook LM for Knowledge Management
44:23 to 46:05
The speaker discusses the use of Notebook LM for managing knowledge and insights from books.
“So we spoke about the Zapper tool, right?”
The Value of Ground Data in AI Models
46:05 to 47:36
The conversation highlights the importance of context and ground data for enhancing AI models.
“The cost of doing it is not that much and businesses would pay for coaching that helps bring people, so to speak, into the cult of the company, right?”
Understanding Customer Insights Through Interaction
47:36 to 49:09
The speaker shares experiences on how direct communication with customers leads to valuable insights.
“I heard that from Jim on your team that you talk to customers every single day.”
Leveraging Synthetic Data for AI Training
49:09 to 51:28
A detailed analysis of how synthetic data enhances the training of AI models.
“And I don't mean it in the way that they intentionally suggested, made the suggestion objective that we implemented the suggestion.”
The Use of AI-Generated Images
51:28 to 54:34
The conversation explores the use of AI-generated images and their impact on customer expectations.
“Your co-founder has a photo of him, Phil does, on some article somewhere that I saw.”
Evaluating AI Customer Service Solutions
54:34 to 55:38
The speaker talks about the challenges and benefits of using AI for customer support.
“So essentially you create four photos that are essentially very, very similar.”
Tailoring AI for Customer Support
56:00 to 56:50
Learn about the challenges of customizing AI tools for effective customer support.
“but I think the value, you know, if you go out and try Finn, I think what you're going to be very disappointed is that it takes a lot of tailoring to get it to where you want it to be.”
Crafting the Customer Support Persona
56:50 to 57:51
Discover how to create a specific persona for customer support interactions.
“And you've got something that you're using, you were telling me you have an artifact, some document that you use to guide FIN to guide your customer support agent?”
Documenting AI Guidelines for Support
57:51 to 58:35
Understand the importance of documentation in guiding AI responses in customer support.
“So I'm not responding to customer support, right?”
Automating Tasks with AI and Zapier
58:35 to 59:28
Explore how AI and automation tools can simplify workflows and increase efficiency.
“And then the Zap, I'm assuming you don't have that anymore because that was an old Zap that you did for Help a Reporter Out, or is it?”
Transcript
Automatic transcript. May contain errors.0:00This founder is creating thousands of customized books using AI. But that's just a start. He visualizes a world where movies, TV shows, every kind of media is going to be customized to you, and he's building a company that's going to do it. He'll tell you how he's doing it, and he's going to riff on an idea and a vision for how you can do it too. Ricardo Vaisantos is the founder of Dream Stories, makers of personalized children's books.
0:28Presented by Zapier, the AI automation company. Ricardo, How many books have you created that are all AI-generated, would you say? Oof, many thousand, right? We, you know, in a sense, all of them, I was going to try to say how to answer the question. You know, each one of them is unique, right? So that's why it's hard to be precise. But yeah, but we've had, since we launched, we had about 70 ,000 characters created on the platform. And those are, those essentially, you know, each book, you know, includes up to three characters. Some people like read multiple books with characters. You know, some people get the entire series, like six books in one go.
1:11And so, so, so yeah, so it's quite a big number. That's a lot. And all customized to the actual customer who's getting it. How much revenue have you produced? Yeah, we're not talking about revenue anymore. I think that when you talk about revenue, the story becomes like quite quickly about like sort of, don't get me wrong, but kind of a get rich quick type of thing. Where in reality, I see that what the revenue we've had is kind of in support of the larger vision we're trying to build. And so that's why I would like to focus on that instead. Can we just say get rich quick story here? Because I think that's going to power people up.
1:43Can we make it into a get rich quick story? No. I think, I mean, I think you could if you wanted to. I mean, there's other products on the market that I think I've gone for that. You know, and I suppose you could. You know, we're trying to build something. I'm kidding. I'm teasing you. Can I give the revenue that I'd seen you talked about in the past? You've obviously got a different number. Yeah, it's a bit outdated, but if you want to. You're saying I could. Okay. What I saw was$3 million a year, but that's not up to date. Fair? Mm-hmm. Okay. Yes, that's not up to date. All right. I'm going to get you out of this Discomfortable place Let's get to the story Of how you did this And more importantly I want to see how other people Can create companies like this From what I understand You've got a family And you decided You know what I want to create something What's the thing that got you Started on this story?
2:30Yeah So I've You know It's important to mention That I've worked in sort of In the media space for a while I was quite early at Spotify And so I've I guess I've been Both in consumer And specifically in media For a very long time And when I saw Generative AI I, you know, I long ago said this idea of like, I wonder if one day we're going to have bespoke content created for each individual. I know it sounds kind of like I'm making that up, you know, with post hoc, you know, now that we have generative AI. But it's a true story. I've actually seen, you know, personalized content on Spotify itself, you know, with songs, you know, birthday songs and love songs and so forth to people's names.
3:10And so I had this thought experiment about it. Wait, pause for a second. You're saying back then, years ago, you had seen customized songs on Spotify? That's correct. This was very early on, right? One of the things Spotify unlocked, of course, is this extremely long tail of content. Yes. You can think that. I mean, it's very obvious, right? If you go to buy CDs at Walmart, they'll carry, say, 100 to 500 CDs that you could buy back then. and so of course you know you wouldn't have this this sort of long tail of content that that stuff like the internet and obviously Spotify enabled right and so there was there's a very long tail of content on Spotify of course and and I thought it was fascinating even albums of songs like I said with people's names which were it was actually fascinating to see because you know people ask me when when I've mentioned this you know how popular were they and you know because Because even publicly, you could see which names are more popular, which songs within that.
4:12But I thought those were all handmade. I think there was a guy, Matt Farley, who would create thousands of songs and put them in. I thought what he was doing was basically singing a happy birthday song for happy birthday Becky and then happy birthday Andrew. But it was him. It wasn't AI at the time, was it? No, exactly. This was before AI, right? I see. You're saying, look, back then you saw customization. People naturally wanted a song just for their name. You said, oh, this is amazing. what if we could have AI created? That's the thought process. Yeah, exactly right. I mean, but again, I'll be honest with you.
4:41Like at the time, obviously you would say AI would be the one to do it, but I didn't go as far as to think how to do it. I just thought it was interesting that even in the future would be possible to do it, right? And obviously this was at a time post YouTube and so forth where people were creating videos and uploading. And so it was interesting to think that will people at some point create content to that point, right, even to themselves. The analogy I sometimes tell today is the same way as when Apple put a camera in your phone and in your pocket. It didn't make everyone into a photographer.
5:12Now, granted, more people became photographers because of it. But what it did is it created new behaviors in which people started taking pictures of their food and pictures of their, you know, in addition to their kids. Right. And that sometimes a bit hard to forecast. And so I think if you give people the tools to creation, they will do things that are not necessarily an extrapolation of what we do today. And thus, you can think about, it's kind of like having a kitchen at home. You're not a professional chef. You probably cook for yourself or for your family. And so it's interesting to think if you give people the means of creating Hollywood-level content, will they do so?
5:49And will they do so not necessarily with the intent to distribute but to consume themselves? So that was kind of what had this seed in my mind. Okay. And so you said, great. One day this is going to happen. How did you end up with kid stories? So I have, well, actually, interesting enough, now two sons. I had my second child literally a month ago. But with my first son, my wife and I, one of us, read to him every night, right? And as I was reading to him every night, I realized that there was a disparity between the content that he was reading and the things I remembered from childhood. I was a big fan of Tintin.
6:32I wanted to be an adventurer, explore the world. I literally have in my office at home, a big poster of Tintin goes to the moon with a rocket ship. And that was kind of my dream. And so obviously, that's also the dream I have for my child. I want him to be this adventurous person. And when I looked at the content that he was consuming, and granted he's a bit younger, I found it, to be honest, a bit more mundane. And there's content, I think it has high production value, but it feels sort of like, for lack of a better expression, lowest common denominator. It's kind of like something that's very agreeable.
7:10you know the the dad in the family is a bumbling kind of funny character you know that's like i don't really want my i want my kid to see me as a fun person but not necessarily as a clown you know kind of like as he was and um it's a bit you know to be honest like you know i was like i think this this content sucks and so and so i was like okay i want him to i want him to be tintin right and so it's interesting that even erge who wrote tintin said you know tintin was modeled in himself, right? It was also a materialization of his dreams. And so in a way, I decided, okay, now I can actually do this for my son, right?
7:48I can create a book that actually makes him the hero, right, makes him Tintin, right? And so that's kind of how I started, right? I wanted to do that essentially for myself, for my family, right? And so did you go and create it yourself? I remember when I first saw ChatGPT write stories, I said, this is going to be really interesting for me to create a story for one of my kids. I'll just tell it what to do and put my kid in the story. Is that what you did? It's a little bit more complex than that, you know, because the challenge with the AI, well, there's different challenges, but particularly if you want to, in this case, if you want to make a picture book, it's actually the consistency of images is actually kind of a complex problem.
8:29Actually, let's pause on that. I've heard you say this before. I think that it deserves much more attention than other interviewers have given it. essentially what you're saying is if I go into ChatGPT or if I go to Nano Banana or any one of these things and I say, give me this photo, it'll eventually get me the thing that I want. Then I say, put this character doing something else, and it'll be almost a different character that's like a warped version of the original. That's what you're saying. It always warps it a little bit, right? Yeah, it's a little bit. It's quite interesting, actually. And to be honest, with different models, in certain ways it gets better at the end, but you also uncover new problems with different models.
9:10But generally it's a problem, right? And it's impartial. And the other thing I also like to say is that it's not that difficult for you, you know. Now, Nano Banana in particular made things sort of better for the average person to do it. but let's say two years ago, if you wanted to create dream stories, it's not that difficult for you to do if you're a technical advanced person to do it for yourself. It's an entirely different thing to build a product for other people to use it with some sort of semblance of quality and consistency, right? So again, you actually mentioned this, right? You go in, you do it, and eventually you get it, right?
9:46It takes many tries. And the average consumer is not looking for many tries. They're looking for something that kind of works. Right. And, you know, it's similar to, you know, I could have told you, you know, well, there was piracy before Spotify and it kind of worked, right? But Spotify made it, well, just works. You just search it and you play and it starts playing immediately. And I think that's actually, that polish is actually, I think, what actually makes it quite substantially difficult to do. Okay, so the first thing that you did was make it for yourself, for your son. You had that. What did you use to make it for your son?
10:21Chat GPT? We just a number of things. At the time, we used Chatwipity. We used Stable Diffusion. I forget the first model we used. We used to do it. We used LORAS, which we still do in some regards, but LORAS is something that you literally use to train models on likeness or consistency to actually get images to kind of stay consistent over time. But then, again, it's a complex thing. I mean, if you look at the, you know, the 70 ,000 characters I told you and you asked me like, okay, how many of those really were, you know, problematic this way? There's a large part of them that were in part because if the customer is tech savvy, it's very easy.
11:07But customers in the real world, you know, you ask them for a picture of, you know, show me a picture of the character you would like, you know, single picture. and people upload like a wedding photo with like, you know, 25 people or the picture is like potato quality. And then, you know, it's garbage in, garbage out, essentially. So, again, there's a lot of it comes from this minutiae of like making something work at scale is actually dealing with these types of things. The first one that you did yourself, you made for your son by yourself. You did. And that what did you use? Stable Fusion? Did you use ChatGPT?
11:41Stable Diffusion. SublyFusion, yeah. SublyFusion, actually the story, the original story was written by me. I used SublyFusion as kind of a co-writer to kind of help me with things, but it generally was written by me. And again, SublyFusion, there was some stuff on the orchestration of it. There's like more technical stuff and then just frankly code, right? Okay. So you did it. You had it. You had the result. You said, now I want to do this at scale. I read an article about your co-founder, Phil. Essentially, at that point, you said, I think I've got an idea. I think you and Phil worked together on something in the past.
12:20And you said, will you work together with me to build this? And that's when the two of you started cranking. And he was taking it from this one to many idea. Yeah, I should correct something that Phil was playing with simple diffusion, right? And I was doing these experiments as well. And then he was the one that kind of helped me put together the sort of the thing we could literally print, right? The physical book, which I'll talk about in a minute, how it became a physical thing. What happened, though, is that Phil was a data scientist at a company I founded called Kinko, which is a prior company I worked on.
13:00And he, you know, at some point, I decided to step down from my day-to-day at Kinko. he later he left as well and he went to uber you know the the record is foggy i i you know my recollection of it is that he went to uber uh to quote learn to be an entrepreneur uh and i i thought it was bullshit because you know you don't you don't that's that you know you at that scale you don't learn to be an entrepreneur there he thinks i'm wrong and that i'm misremembering so you know so you'll have to talk to him to see who's right um but but anyways but lo and behold he was he was you know he learned a lot at uber but he was also quite bored and he was playing with with these things right and so he so he helped put together the the orchestration of these things he was playing with with again with ai quite a lot and he helped put together the orchestration and then yes and then i told him that i think we could build a product around this right and i think that this this is the there's a path between where we are and the materialization of that idea I had many years ago of this generative media platform, if you will, where content is created just for one individual, which I should say, I can talk more throughout this, but it's a bit of sometimes difficult for people to understand because, again, most people at this point think AI is going to be a big thing, of course, or some of them already is, but most people tend to extrapolate.
14:23And so they see that, hey, it's going to make Hollywood better because production costs are going to go, oh, you're going to have more content. And again, I'm more of a believer that there's going to be sort of new behaviors that you can't see just yet. And this is one of them, right? Which is if cost near zero, then literally everyone can do it. But if everyone can do it, then of course, you know, who's going to watch it? And the question is yourself or the answer is yourself. Meaning you make it for yourself. That's correct. Yeah. Which doesn't mean, by the way, that I should say it doesn't mean that, you know, that it's the end of broadcast media or anything like that you know that that's another misconception i think people have sometimes which is that that you know one thing will clear cut you know replace the other when in general like you know what happens is that new behaviors unlock right granted some become a bigger slice of the pie um so i do think there will continue to be movies i do think there's going to continue to be a new tube but also think that there's going to be this emergent behavior of creating content just for your own consumption such as taking photos for your yourself, which is not, it's not so foreign when I tell you in that way, right?
15:29Yeah, yeah. I guess what you're saying is, look, the, when the iPhone came out, it didn't stop professional photographers from taking those professional photos. It just added more. And most of the photos that we take aren't even shared with anyone. It's just for ourselves. You're saying the same thing's going to happen with AI. I might just make a story for myself to fall asleep that is customized to me and one to motivate me in the morning to wake up that is customized to me. And all of those things are additive, they're not replacing. I think that makes a ton of sense. I think that makes a ton of sense.
15:58And I could see that happening in a lot of different media. I have these songs that I've made in Suno that are just for me. They're customized to my little personal experiences, the things that make me happy, the things that make me like fired up or sentimental. You're saying, look, that's gonna happen for videos. It's gonna happen for movies. It's gonna happen for books. And the reason that you picked children's books from what I understand is you said, what are people willing to pay for? What are they so sentimental about that they want customized right now? It doesn't have to be super long.
16:28Kids books. So that's what you started out with, but your vision is much broader than that. You would like to get into making video stories for a kid so a parent can go and create a cartoon for their kid, right? Yeah, there's also an interesting dynamic that I've witnessed before, which is I find fascinating products where the best way I can describe it is that where the buyer is not necessarily the consumer. There's a few products that are like this. Like the one I usually tell is like Gillette, where usually the woman in the relationship is the one that buys the Gillette. It's like I think about 70 % of the purchases of Gillette are by women.
17:03The number may not be accurate, something to that degree. And the reason I know this, by the way, is because Kenko is a direct-to-consumer company and we studied Dollar Shave Club and so on and so forth. And we were thinking and talking with other brands and thinking that it's interesting because then if you make that assumption that someone else buys, then you think that the marketing is, for instance, the marketing for Gillette is not for men to feel, I want to be this guy. It's more the women saying, I want my men to be like this guy. So there's a bit of second degree aspirational, you know, in a way.
17:39And I think there's a big problem in media that everyone acknowledges. It's this desire for dopamine, right? In particular, social media where it's very addictive. But if you make it one step removed, you know, if you go on the street and ask, like, everyone, you know, do you think you should spend the last time on your phone? You know, everyone's going to say yes. But they still keep doing it, right? Because it's a bit like a drug. It's difficult to get through. But, you know, but again, when you're sort of one step removed and you're thinking about a child or so on and so forth, your judgment is a little bit less, you know, a bit more calculated or a bit higher level thinking, right?
18:15You're thinking about their wellness beyond what they do. that's literally what i do for a child right the child can take for themselves so you do it for them and does that means that you can that parents have this more rational i think interpretation about this where where you can think that hey look i'm going to give you the tools you have a big problem right which is like you know you you either you know i told you mine you know where where you know there's content that i don't particularly like that my kids consume said i would like to get him like other content that aligns more with my belief system if you will maybe if that's the right word but second i i you know addiction is the one thing i forbid him for watching completely is like coco melon you know uh that one you know throwing them under the bus but you know it's like if you i don't know if you ever had the pleasure of listening to it but literally drives me insane the the the songs i just think it's playing glad we don't yeah it's yeah it's it's it's mind-numbing the bigger takeaway you're saying is look i'm actually if i'm understanding you right you do have a broad and broad vision for getting a lot of different media you did start with books because parents are picking it for their kids and it's important and they're willing to spend money yeah what's this point that you're making about like who buys for whom why does that matter oh okay i'm sorry uh because because again because uh okay so we're saying it's taken within kids right i'm i was actually answering why kids in particular right why why um why that the family family products as opposed to you know for instance you have you have open ai doing soda you know which is a essentially a beyond the model is a you know a social network you know essentially if you will or a content network on on top of an ai model right so they're trying to get to the actual consumer that's going to use it they're trying to make a social product in the way whereas i'm trying to make something that is for the family right so something that is focused on on getting someone giving someone the tools you know So in a sense, there's two users, right?
20:07There's the consumer that is actually going to consume the content. And there's the person that kind of alters or curates the content, right? And buys it, of course. So that's why families, right? Why books specifically? It's because, you know, there was a, you know, when you're doing consumer, particularly in entertainment, you know, you're starting in the attention economy. And the one time, which is brutal, you know, like I probably don't have to tell you that. But the one thing, the one time of the day I think is kind of sacred for families. It tends to be a bad time where literally you don't, you know, parents tend to be very restrictive about what they give their kids and particularly and even anti-screens in many cases.
20:49And so I saw that, but there's kind of something I found very fascinating, which is there was a repeatable behavior in it, which was like literally every night. When you think about something every night, you can start like opening your mind to okay i can actually build something that is not a product something that's actually a service right something that's not a one-time consumption it has a sort of a ritual to it right and that's also why dream stories was were written i told you that we we sell multiple books you know to the same person yeah you know essentially because they're episodic right it's a it's a sequence and i don't know if yeah and and one other thing that was actually first pioneered probably by Blue's Clues, a TV show, which is that they figured out that kids quite like repetition.
21:34I'm sure they didn't figure this out, but they exploited this, where they show the same episode every day of the week, and then the next week they show a new one. And what kids have with that is that they like this level of repetition because they get excited when they know what's going to happen. Yeah. But there's a threshold where at some point they want the next one, right? So anyway, so I saw all these properties to it where it's like, oh, shit, we can actually build, we can build a service, right? We can build something that is episodic, that has recurrence, right? Okay, let me take a break, and then we'll come back, and I want to talk about the big thing that you've got for the future.
22:05The break is to just let everyone know, my new sponsor, it's Zapier. It's the AI automation company. Now, I've got examples of how I've used it, but you have one. Let's go back to one of your earlier uses of Zapier. What was it? I've used it quite a lot for a lot of both big and small things. But one that I can mention is that when trying to secure press, there's all this mailing list, like help a reporter out where you get emails from journalists or bloggers requesting things. And it's usually this massive list of things. You can pay some services to filter it down. But what I realized is that I could essentially create an email inbox in Zapier.
22:44So subscribe with that email inbox and essentially have, you know, filter down, filter down like things that were, you know, at the, you know, when I first did this was based on keywords, it was very dumb. Now it can be built with AI as well. So you have AI filter, like, listen, out of all these requests, which ones are interesting? And of course with AI, now we can even automate essentially, you know, pitching back to them. Right. And so essentially you have basically a sort of a PR agency, you know, built on Zapier, you know, with AI and Zapier essentially. So that's one. That's pretty cool.
23:16That's killer. Actually, you're right. Today, with AI, you don't need a keyword. It will just analyze it. If you tell the Zapier AI option what you're looking for, what kind of company you have, it will screen it and then only forward you the ones that matter. And then, yes, you can take it to the next step. All right. I do really love Zapier, and I'm glad to hear your example of it. All right. Let's talk big vision here. You don't want to just be in the book business, which, honestly, for many people, that would be a killer business to be and customize books. But you have a bigger vision. Where do you see this company going long term?
23:48Yeah, I mean, you're right. You can go very far with books more than I would say people would give it credit. Also, I love books, you know, that I have a large collection, you know, that's actually my sort of only indulgence, you know, is my big physical book collection at home. But yeah, but we want to go into other media, right? But the thing is that But we're kind of in this sort of Moore's Law sort of phase where the cost per token is going down severely. And so things like what we're doing now are essentially becoming or are actually possible now. Video is still quite expensive. Again, it's one thing if you're doing video in the old model in which you're...
24:32It's very affordable now for all the wood studios to use it, right? Because they make one time, you know, and going from, you know,$200 million to, you know, a few thousand dollars is, of course, very good for them. If you want to make it for one-on-one person and let people, like, edit, let people do, you know, try different ideas and so on and so forth, it's very expensive. This is why it's kind of known that, you know, Soda, OpenAI Soda is literally burning, it's been said to be burning$15 million per day, right, on the app, essentially, with people, like, playing with the video. So people ask me this, like, why didn't you start with video?
25:08It's like one of the answers is that video is actually still expensive enough that it's hard to actually come up with, if you're not a hyperscaler, to come up with a viable business model. Arguably, it's not a business model even for them. Whereas images is becoming, even though, you know, like all businesses, we make money on some and we lose money on some, right? If people add it a lot and particularly add it in the wrong way, we might lose some money on some of them. And so getting that balance right is important before you actually skip. So the big vision is at some point you would like to create cartoons for kids with not just the kid's photo being in it, but also the beliefs that the parents would like to impose on their kids.
25:55So for me, I might say, I want my kid to understand how to be an entrepreneur because that's going to serve him well. You're saying, all right, maybe Andrew gets to create a story where his son is an entrepreneur or the character is an entrepreneur. Someone else might have a religious belief that they want to impose or bring into their kids. Same thing there. That's correct. That's the vision that you have, right? Yeah, exactly. And by the way, I should say that's already happened today, right? The thing that people will create, the stories they create have multiple characters. We actually spent a lot of time on this.
26:26This is surprising is one of the hardest things we did or that we had to solve. It's interesting that if you look at most, not everything, but if you look at most comparable products out there, usually they have one character. Just because the whole thing about having, if it's already hard to keep consistent with one character, it becomes exponentially harder with multiple. Not because there's more variables, but literally because AI will mix faces and so on and so forth. So it's actually kind of difficult to do things with multiple characters, but we are doing it nonetheless. And that's actually a massive unlock because it means people can create content with the entire family, right?
27:05Which is not just one person. So as such, you know, there's a lot of parents that put, you know, cousins, siblings, you know, grandparents. We see a lot of, you know, diseased relatives as well. you know sometimes grandparents sometimes it breaks my heart you know when when the customer tells us that you know it's a you know a child a child that died you know it happens quite a lot surprisingly um you know it's it's quite again i think the beauty in it is literally that each story is different right and that enabling these things is kind of a beautiful thing in itself but you know we've had customers that are one one child that that passed and then they're like oh I would like my daughter the sibling to have a book with the older brother that they kind of never met and you know as a parent of a young child of course that makes me quite emotional to hear but you know it also elevates what we do right okay I told you before we got started that I'm a little concerned that people are going to hear this story and they're not going to be able to do this it's not like they can go out and build the next Dream Stories company DreamStore is a tough business to create.
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28:11Let's talk about where the difficulties are if someone wants to create something like this. And then let's riff for a little bit about how someone can create a different version of this, something that's a little more attainable. What's the difficulty that I don't see on the outside? Particularly most consumer products, right, or most products, you know, the problem that you really have to solve is distribution, right? is that we, particularly in a time where you have all these tools like, you know, Vibe Coding, Lovable, so on and so forth, where everyone can create the product, you can, you know, it's a great time in the sense that, you know, if you ever, you know, if you were ever the person at a party saying that have, you know, the idea for the next Uber, well, congrats, now you can do it, right?
28:49You can actually go out and build your next Uber. So I think the problem is actually not so much in, there's some things that are still difficult, but the problem is not so much execution as much as the distribution part. It's like getting people to actually use it, right? And that you can think in different ways, right? And no one can give you kind of a formula. But what I can tell is the way I go about it is essentially, you know, is to figure out the model in which you, a model in which essentially you retain, they retain customers. Again, sounds a bit vague as well in itself, But let's say, for instance, one thing I do quite a lot, which is paid acquisition, right?
29:32It's sort of a level playing field in the sense that everyone can do it, right? You can give your credit card to Facebook or Google and ask them to run your ads or TikTok or something like that. You know, so it's not difficult to get started, right? What's difficult is to actually get the economics to work for you, right? Particularly because it's an auction model, right? And so you're going to have people bidding against you. So how do you win them? you need to outbid them. To outbid them, essentially you need to have a better economic model than they do, right? And so essentially what I would say is that part is that figuring out, for me specifically, it depends on what you're doing, but figuring out economics is probably the hardest, most difficult part.
30:13Like what? What's missing about it? Here's what I heard you say on Nathan Latka's podcast. You said, first of all, you're an experienced ad buyer. This is one of the things that you brought to Spotify growth. Second thing you said is you like Facebook for your product. Dream Stories does well there. Third thing you said was that you try to get your cost per acquisition to be the same as your average order volume. Those are the basics. What else is there? Let's go deeper than that clip that I saw. But even that, by the way, I should say, if I could get my CAC to be lower than my OV, that's bad, right?
30:47You're essentially making more money. But what I also said is that there's this interesting thing in advertising that a lot of agencies tend to optimize for this row of one, meaning that you basically spend$60 to earn$60, right? But when I say earn, it's like literally revenue. But out of that revenue, you need to, if you're selling a physical product or you have cogs, you need to take them off. And so essentially, you're losing money on every sale, right? If you do that, right? So your only hope to recoup is to essentially turn that into a repeat purchase. but the cool thing about what we do in in our case and again this is different for every market right for instance spotify was different as well right we at spotify the model was we have a great free product right we're going to acquire people to the to the you know it's at the time there was not as much competition for attention either so both cpms were lower so it was cheaper to acquire to acquire people to the front door get them to listen to a few music and then out of them you know i i'll say a random number because i actually don't remember top of my mind but let's say 40 percent of them convert to premium right something like that and so then you just make the math and you see if the thing the if if the maths works particularly you know assuming that subscription you're going to have revenue over time um in in in our case you know i should say that the market is far more competitive now than it was when you know in in in online media than it was when i was doing that at spotify but the cool thing i think we have is that we're we we you know we we didn't try to come up with something that is very exotic that doesn't exist in the market right you know In fact, some people out of that podcast criticized that, oh, but haven't you seen this other product that also exists?
32:28Yeah, exactly. That was partial intention. The category exists. And because the category exists, that means the customer is educated about what they're about to buy, which is a personalized book. But what you then need to do is to convert that novelty purchase into a repeat customer that buys many things. And that's where I set the focus on bedtime, the focus on being episodic. You know, that's why we're not doing ABC books. You know, people ask me things. Well, can I get a book about ABC? I was like, no, I'm not interested in that. Right. There's no there's no repeatability to that. I see. You know what?
33:05You mentioned earlier your previous company, Kenco. What you did there was smoothies that don't need a blender. It was like little pouches that you add into water, mix it up. And that was also repeat business. So it seems like that's what you're in the headspace of. You're saying, what can I create that people need to buy multiple times? Something like coffee, but it's got to be new. It's got to be innovative. And that's what you're thinking about with books too. Exactly. Finding a repeatable pattern, right? You hit the nail on the head. You know, I've been doing subscription most of my life, right?
33:38And the usually thing I tell people is that, you know, subscription is not this. I tend to be very against this. I have done it as well, I should confess. But every time you go to this website and you see this subscribe and save 30 % or something like that, I tend to be quite against that in principle. I've advised other founders on this and so far I've been correct that it improved their funnels in which that when you do that, you're actually confusing your customer because what you're telling them is that, listen, I can either buy this one time or I can subscribe. And so people are not dumb, right?
34:12They'll be like, there must be a catch, right? They're going to get my credit card. They're going to bill me. I'm not going to be able to cancel this, you know, so on and so forth, right? So you're kind of dangling this 30 % discount or whatever if you subscribe. And that's not what you want to do. What you want to do is you want to build like a service, something that actually is a service in which subscription is just a feature of that service. And the example I can tell is that if I came to your, you know, if I basically, if let's say AT &T or something, cut your internet every month, right?
34:40And this sucks, man. And it's like, can you please keep this on? You don't want to go to the AT &T store to buy internet again. So it's a service that you've now grown accustomed to and that you're willing to pay because you're just using it. So you're happy to have a subscription billing. And so I think the challenge is creating that. And so with Kenco, we were trying to solve breakfast, which is highly episodic every day. Most people, it's the meal of the day that seems to be more boring in a way in the sense that there's less change. Boring and mindless. You do the same thing every day. Exactly.
35:13You know, if I tell you, you know, you're going to eat Thai curry every night, you're going to call me crazy, right? But it's kind of easy to say, well, you're going to have this propracus every single day. Use yourself, right? And so essentially, that's been my goal, right, to turn. I actually remember at Spotify, we always quoted this David Bowie quote, which was, you know, music is going to become like running water or electricity. So it's the same thing, right? It's a service, right? You want to have that tap where you open music, close music, right? But Ricardo, what I'm trying to understand is if you're not immediately getting people to subscribe, instead you're selling one-offs.
35:49In fact, actually, I think what I see is the user can buy one book or there's a discount if they buy two. But you're not doing it as a subscription and that's intentional. You're saying to the user, look, just buy one or two. And then if you want, you come back, right? Or am I missing the subscription option? No, that's correct. That's correct. There's a few reasons for that. I think we will probably add the subscription in the future. There's a few things I want to get in place before we get that. But there was essentially, I can maybe go into detail in a minute about it. But the way you described it is correct.
36:26That's exactly what it is, right? So what's the difference between that and the subscribe and save, which you tell people not to create? No, I mean, but right now it's not subscribe and save, right? You pay the exact same thing, like if you buy another book. So we don't have a subscribe and save plan. What I'm trying to say is that you mix when you have the option, buy one time or subscribe and save, then that's when you're confusing the user, right? Because you're saying... I see, you're saying pick for them. Let them pick one to buy or a subscription. Tell them how you work and don't try to confuse them and make them think that you're tricking them into a lifetime purchase.
36:58Yeah, exactly. I mean, by the way, it's fine for you to have a subscription and tell people you can cancel any time, all these other things, right? But when you mix the two things, you're just adding confusion. And I told you that I've advised people on this, that there's someone I know that's actually a very prominent influencer that has a supplement product where she had these two options. And what I told her is that, listen, you're telling people that they should consume this every day, but then you give them the option to buy one time. You're actually confusing them. And I said, and if you don't trust me, just test it.
37:29Do an A-B test. Have a funnel with subscription only and a funnel where you give both choices and then see what the conversion does. And lo and behold, the one with subscription actually increased conversion because it reduced that. Because again, you're introducing this point of where there are people wondering, wait, what's the catch here? Why is it cheaper to do it? There must be a catch. People are not dumb. They will think there's a catch, right? And so I think that that's what I'm against, right? In my case, so I think your question is sharp, right? But I think that in this case would apply if I would have both options, right?
38:05And so objectively, I don't have subscriptions just yet. But I can tell you why. The reason I don't have it is because for one of the things that we're working on is, and I should probably say this earlier, but right now, you know, the books that you can read, like I said, were essentially my stories, right? The stories I created for my child and that you can go and put your family in it. And over time, we added, you know, the ability to customize it and people heavily customize it. but it still follows roughly the plot I set you know myself you know because that was my aspiration for my child you know you're going to have a different one and like you said you're going to have other people have a religious one a moral one different things right and I think that the the essentially we you will only I think we can only earn the right to become a service once we give you essentially full agency in a way.
38:59I see. Because then that becomes sort of the infinite content machine, right? As in that you essentially can sell, you can say, listen, you pay this much and you get like three, four stories or maybe your bill based on how much usage. But essentially create the service as opposed to a fixed set of products you can buy, right? I see. Actually, that seems counterintuitive. I would have thought that it would be the opposite, that you would have to find a way to write the stories for them if it's an infinite number of stories that are coming at them because if they have to every month log in and figure out what next month's story is, you're giving them a lot of work.
39:31But if you're picking it for them and they discover it with their kids, that's more interesting. Yeah, but they don't have to, right? I mean, actually, I'm glad you asked that question, right? That you went there. Essentially, at the beginning, when you come in, the product is what I'll describe a pull product, right? You come in and you pull the story out of the system, right? and and by the way a lot of people would say well but will reference people have the agency to do so they don't have to i mean when you come in and if you if you tell me you have a three-year-old right and or let's say that i ask i as in the agent ask you like you know what uh you know what do you want to do um how old is your well as your kid you know do you have a sibling so on so forth you know you can probably make an assumption of what you know is it a boy is it a girl you can make an assumption that if it's a boy, it probably likes fire trucks.
40:20If it's a girl, it probably likes these things. And then they just have to ask you like yes or no questions. Right. And then very quickly, you kind of build sort of a memory of who this family is and what their values are and so on and so forth that then you can basically build on. Right. And you can, so it's very quickly becomes a push thing as opposed to a pull thing. So you're right, you know, I don't expect people to come in to alter every single thing. What I expect them is to do that the first time and then it essentially becomes a push thing. You know, as in the episode two and three, I don't need you to necessarily come in, right?
40:54And particularly with, sorry, just to say this, you know, it's the same thing as, you know, how people have this thing that, you know, Facebook's listening to them because, you know, they thought about the kitchen knife and now there's a kitchen knife, an ad for a kitchen knife or something like that. Yeah. So with kids, that's even more predictable, right? I mean, the kids go through sort of, you know, sort of stages of growth. You know, for instance, my child just got a sibling, right? His first weeks were, you know, were very emotional. He dealt very well with his new sibling, but he also had these moments of tantrums, you know, for lack of attention and so on and so forth.
41:28I mean, if you ask ShadGPT this, ShadGPT will tell, well, it's very normal. It happens to every single kid. Well, no shit, right? So your family will have some sort of different flavors, different from mine, but they're not that different. They're a bit predictable in that manner. So you can essentially combine the predictability with the data that you provide. Okay. I get now where you're going. Let's take it away from you and go a little broader. What are some ideas that you might have for creating this customized using AI product to sell people? right you're an investor you give advice to a lot of other entrepreneurs you've created companies yourself if you wanted to come up with a simpler version of what you're doing now customized ai products service book something what would it be it's a very it's actually i really like the question you know i usually tell tell friends that if i would have a a fund would literally be that personalized bc or something like that you know like yeah essentially uh chase you know chase personalization opportunities i you know i can think of there's broad categories right you know for instance i i think vibe coding in a way is that a vibe coding is literally you know your own personal software developer building something personalized for you you know for internal tools or you know if you have a cafe you can have software for your own your own uh your own stuff for uh let me think for consumers so it's actually a hard question in the sense that, you know, in part, I'm exploring the best idea I have in this space, right?
43:03So what would be the second best idea, I guess, that we can think? You know, the thing that comes to mind for me is, you're thinking consumer. I wonder if there's any kind of guidance that could happen in the business space. For example, we talked about Zapier being the sponsor, Wade, the founder, likes the, what is it, the five dysfunctions of an organization, of a team, I forget the name of the book. Anyway, he likes it so much that that, at the end of each internal meeting, everyone's individual contribution to the meeting gets analyzed based on that book using a zap and then DM to them as a coach.
43:37He's doing that manually for people using Zapier. I know that a lot of leaders have their own philosophies and books that they study that I think that they would want to somehow impart to their team. This is our approach. I want to, I want to guide you this way. I want to support you that way. And that kind of customization is not a hard thing to create, right? And so right now it might be something like a zap that you sell individual team members that says, look, I'm going to spend some time with the CEO. I'm going to spend some time, right? Assembling all this. And everyone in the company is going to be, we're going to find a way to give you coaching based on your meeting transcripts, which are shared within an organization and can be zapped in, based on maybe your email, based on also the founder's vision or the leader's vision, right?
44:22There's some kind of coaching that's possible that way. So we spoke about the Zapper tool, right? Another tool that I hadn't contemplated but I do use is that are you familiar with Notebook LM from Google? Yes. So I kind of do a similar thing to what you're describing in that, you know, like I said, I have a large collection of books and one thing I do with every book is I take highlights manually. I like to read physical books but then I actually copy the highlights. It's my way of like of, you know, memorizing them to kind of copy the notes to my computer. So I have a big repository of them.
44:56And I do dump them into notebook LM to do exactly what you described, which is like, you know, I have this problem, you know, base notebook LM is great in that, you know, the base of truth is literally what the stuff you put inside, right, the documents. And thus you can, the query essentially can talk to your books in a way, right? It's a way of thinking about it. So I think you're right. I mean, another thing that people are doing is, you know, they create sort of boards of people they know, let's say you admire Charlie Munger, you know, you can have a bot emulate Charlie Munger and give you advice or GPTs and so forth.
45:27So for sure, I think that could be a thing one could productize for sure, right? I think any one of these things that you can kind of hack together, you know, with high intent is probably something that you could make as a product for a broader audience and essentially take it to 11, right? So essentially make it far better than what you do as a hack. So yes, I will probably be a user of that and an investor as well. Yeah, and you could do it as a service at first right now. The tools are all available to connect together and customize it for companies. And then eventually the APIs are available.
46:05The cost of doing it is not that much and businesses would pay for coaching that helps bring people, so to speak, into the cult of the company, right? That's correct. And there's a few tools that are trying to do this publicly, namely, I forget, Delphi, I think was one, right, where it's trying to... Create a chatbot, basically, based on your approach. Yeah, and you know what's, I think, interesting about that, particularly if we think about what you described, which is like data that's maybe not publicly available, is that these models are becoming commodities, right? I actually just did this because I changed from using GPT to Gemini, and I was actually asked an exercise to see how much I would miss it.
46:45And, you know, not much, frankly, like it's kind of felt like a commodity, right? I used to put gas in one station, I'd do another one. But what's actually valuable is the sort of the ground data, right, that you actually have, right? So, again, the things I put into Notebook LM, for instance, are more valuable, right? And so managing context is actually a very valuable thing in this context, right? So in my case, you know, the context is the family graph, right? That's what I'm curating. and those models will come and go. And as they come, actually, our product tends to get better. But the context is actually figuring out the context management.
47:22So in that way, you can think that all these companies are sort of memory companies in a way, like a waste-organized memory that then gets... There was actually a time where people said that every company is a database company. And I think it's not so different right now in that sense. What's the thing? I heard that from Jim on your team that you talk to customers every single day. Do you talk to one today? I do, yeah. I do talk to them every day, yes. Why? What are you trying to understand by talking with them? Yeah, it's something that, you know, I can't say it's always advisable to do, but it's something I've always liked to do to kind of feel, you know, essentially get a feel for the product.
48:07It's a good way to think about how they are approaching it and so on and so forth. It's also like it's also helps me be a better leader for for the customer support team, you know, in that function. So at Kenko was the same was the exact same thing. And I had a fairly larger team than I than I do now. And I would do the same thing, you know, for at least like an hour of the day or something like that. What did you learn today or what did you learn recently that you didn't know? It feels like this business is pretty straightforward at this point. I primarily I built this product for myself. Right.
48:38So I think it's straightforward. Right. but and you know i'm also somewhat experienced so i trust my judgment that i'm not disillusioned about it but you know when you're doing a product for for families and you know there's always going to be people that that encounter issues that are not as as easy as as as things are to you right and so i i constantly get ideas from you know from i can i can tell i for sure i had ideas that Literally, I would say that customers gave it to me. And I don't mean it in the way that they intentionally suggested, made the suggestion objective that we implemented the suggestion.
49:15It's more than once than that, right? They just noticed a behavior that they were doing. But listen, everyone's doing this and sometimes it even feels like a hack, right? They're trying to hack something together. It's like, oh, wait a minute, is this like something we should actually productize, right? And there's been a bunch of them, you know, that I've noticed people, you know, from doing that. And I think that ideally you would find yourself, like, have the customer support or something that has that sensibility, but it can be difficult, right? And this is why, you know, even it's known that, you know, even Jeff Bezos is the same thing, right?
49:47He would, I'm not saying you would sit and answer emails every day, but notoriously, you would respond to customer emails and that would prompt, like, changes within Amazon when you saw fit, right? So - You can't think of something specific that you had learned recently that changed the way you think about the business, can you? No, so I can tell you that the idea of, I started noticing more. So when I started this, a lot of people told me that a lot of people wouldn't want to create their own content, right? And actually, I got this pull from customers quite a lot, right? I have a lot of emails to show you that the opposite.
50:24People giving me, from all sorts of agency, people that write the entire thing, from people to have just small ideas, right? And so that's a very obvious one, right? You know, people that literally send me an entire script and even drawings of things they want to do. But, you know, but other things are more minutiae within the product, right? I've noticed that, you know, people doing one thing. For instance, if people really like one picture in one image, sometimes they would basically upload that picture as a source image. Instead of uploading a picture of the child, they would upload the AI-generated picture of the child, right?
50:58And initially I thought this is a bit dumb, you know, why are they doing this? But then I realized that, you know what, the problem I told you about the potato photos, like people putting pictures. And I realized that, okay, it turns out that the AI generated photos are actually high resolution and sort of clean of the things around. So I realized this is what people in AI would call synthetic data, right? So essentially they want to use synthetic data to train the models, right? And then we decided to try this and it turns out it actually works really well to increase the quality. So essentially use the AI generated image to generate other images, right?
51:31You know what? To my taste, I understand it. Why? Your co-founder has a photo of him, Phil does, on some article somewhere that I saw. And I go, this looks really good. I could see how he would want this to be his avatar, you know? And I get that that's how people feel. Like you just made the best version of them, the person that they are when they're on the moon. The hair looks right. I don't know what you've done, but you add some kind of light to them, you know, like to make them radiate a little bit. And so I could see that they say, this is the best picture of my kid. I want you to just use that.
52:03That's what I'm seeing. You're saying it's also helping you train your model better? How? When I say synthetic data, it's actually more used in the concept of LLMs, right? But it's like there's this idea that LLMs get better by essentially by having more data. And so, of course, we have the internet data. But at some point, if you believe that that's a constraint to make a model better, you need more data. How do you find more data? And so it sounds kind of bizarre, but there is this idea of synthetic data, which is what if we get AI to generate data that then models use to study? Exactly. So that's what we call synthetic data.
52:37So data that was already created by an AI that is being fed to a training and AI model. So in this case, you know, what I'm saying is that, you know, the way DreamStars works is that you upload a picture. Or back in the day, we'd let you upload multiple pictures. Now we only require one. And then basically we actually, in fact, this was why we stopped. We only we started being able to only upload one was because we we noticed people uploaded multiple pictures. And then we generated like a preview of what this could be like. Right. And then sometimes people like the results, sometimes they don't.
53:09But oftentimes we saw people not liking the, not oftentimes, but when they didn't like the result, we asked them, can you upload a new picture? And that's when you notice that a lot of the times people, the picture they uploaded was an AI-generated photo that we did, that we generated, right? And then we're like, okay, that's a bit strange, but why would they like to? And then we realized that what they were trying to do is that in their mind, they thought that that meant this picture is going to be the picture used. because you have to understand that customers probably think, you know, they don't understand what AI is.
53:38So they probably think that you have someone sitting there cutting the photos, right, and pasting the photo on the book, right? And so, you know, that's how they communicate. Can you use this photo on this page, right? So they think you're literally cutting. They don't think that you're recreating. So that's why they do it, right? They upload the AI-generated photo and say, I want you to use this one. So that's not how we implemented it in the end, but we noticed that, holy shit, people do this and actually the resulting pictures tend to be very good. And that's what I mean, right? That's one phenomenon that I only noticed by virtue of watching customers behave with the product, which ultimately meant that we were able to reduce the number of pictures required to literally just one.
54:23Because then we're like, holy shit, we can essentially just ask for one picture, generate the synthetic version of it, and then say, do you like this? Great. So we generate a few more synthetic versions based on the same thing. So essentially you create four photos that are essentially very, very similar. We just like the different lighting and that tends to be enough to train the model to get consistent results. Okay. All right. And then the other thing that I heard that you do is you've got some kind of agent for customer service. Can you tell me what that is then? I mean, it's quite public, right?
54:50We use, we use Finn. There's a few Finn from intercom. There's a few out there. Yeah. Finn, I think interesting that intercom kind of pivoted the company into, into, into AI agents, as opposed to a tool for customer support. Talk to people about that. Apparently, Intercom had a problem where people didn't see them as an AI company. They saw them as like a human chat company and they needed a way to say, we are this new thing. Don't think of us as an old company, like live person. And so they came up with Fin and that did change the way that people perceive them, right? Yeah, I think they did right.
55:23I mean, changing the name. Yeah, I think you can see the product that they're remnants. I've actually used Intercom before the full AI pivot. You can see remnants of the old product in it, right? But I think they did a good job. It's hard to do this as a company, right? Notoriously or famously, Netflix did this two times, moving their business model entirely to a complete new reality. I think Intercom is navigating the same. I think they've done a good job. Now, it's not amazing, but it's good, but it requires a lot of customization, right? And I would say that I would still recommend it but I think the value, you know, if you go out and try Finn, I think what you're going to be very disappointed is that it takes a lot of tailoring to get it to where you want it to be.
56:09And that's actually one of the reasons why I like to do some level of customer support literally because it gives me a sense also of what, you know, of essentially where Finn is also not doing such a great job and how I can, you know, where is it hallucinating or why is it giving wrong answers or why is it not able to perform something that it should be able to perform, so on and so forth, right? So my point being that when I spend time doing customer support is also a bit with that lens, right? Is with the lens of like, what can I automate, right? Rather than essentially hiring a lot more people to just cover the, you know, increasing sales, how can we just essentially automate this problem away?
56:49Right. Okay. And you've got something that you're using, you were telling me you have an artifact, some document that you use to guide FIN to guide your customer support agent? Yeah. I mean, I think most people have that, right? But it's like, it's a combination of escalation guides. It's a, it's a, it's sort of documentation. We it's yeah, you know, of course, it's quite elaborate, right? That we spend, but I think that beyond the documentation, I think what's most valuable to me is the sort of the, the, yeah, the guides, you know, which inform how you know oftentimes i will you know even when i'm doing myself you know customer support i ask chat gpt or something or gemini to help me answer things and oftentimes i don't like the answers that it gives me as in that you know i found you know i i think throughout all the companies i i worked in basically i usually you know customer support reported to me and so i always crafted like a specific persona in that i want my agents to to impersonate you know agents or human agents, whether humans or AI, I want them to have this persona.
57:50You know, that is not me. It's not me at all. So I'm not responding to customer support, right? I'm enacting like a customer support agent, right? Yeah. And so I spent quite a lot of time. And, you know, again, initially I tried to tell that to my team and I have documents and saying how it is, but they kind of learned a bit more by osmosis, right? And now I'm basically more trying to, how can I get AI to believe like this character, you know? Can I see the doc that you give AI to guide it for how to answer your questions? Unfortunately, I don't have it at hand to show you because it's actually, particularly in the context of Fin, it's kind of broken down in many different things.
58:24Into lots of different things, okay. Yeah, I can probably send it to you. I would have to spend time. So not polishing the document itself, but compiling it for you. Okay. All right. I'd love to be able to show that if that's available. And then the Zap, I'm assuming you don't have that anymore because that was an old Zap that you did for Help a Reporter Out, or is it? Yeah, it was. But actually, when we mentioned this thing, I actually thought I should do it. Actually, there's no reason why that. So it should give me shit for not doing it. Because I think it's particularly with AI, because what I did was exactly how we described it, right?
58:55But the thing you can do with AI now, for sure, is that you can actually get it to pitch out, essentially, right? So it's not just based on keywords, right? You can analyze the content and then essentially can compose even the... So I can basically be in Bali or taking a nap and you could essentially... It'll pitch on your behalf. Yeah, that's usually my running joke in the team is like, can we finally book the trip to Bali, right? The point being that once it's fully... That day never comes, right? But once it's fully automated, we can finally chill because everything is well-oiled. The cool thing about Zapier now is that you can just describe what you said to me.
59:31like you can talk to it you say i'm going to get you uh when when an email comes in from this service i want you to look for this type of company and if it's right i want you to take this action and just just talk to it give it a few minutes it will create the whole automation for you and then just run with it all right i'd love to see it so you're saying i could give you shit if you don't do it yeah you should so you should we should talk again in a week and if i didn't do it you know then uh then i then i i'm out of excuses right all right hell yeah thank you for doing this interview with me.
59:59I'm looking forward to that. And we'll publish it and we'll have other people use the same Zap. Share it, share it, right? The nice thing about Zapier is that you can share your thing. Other people obviously are looking for different types of businesses, but it'll be nice for them to see it. All right, thank you. Thanks, everyone.
From the publisher
Ricardo is the founder of DreamStories, a company creating AI-powered, personalized children’s books tailored to individual families. Previously, he worked in consumer media and was an early team member at Spotify, where he developed a deep understanding of long-tail content and personalization. Drawing on that experience, Ricardo is now building toward a future where books, videos, and even movies are generated uniquely for each person.
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