2024 TWISTY Awards | E2066

0:00And Bench, oh my God, that just happened last week and that's a big blowout. And they did it in spectacular fashion by screwing over all of their customers, apparently, allegedly, according to reports. I got to put all these caveats in here so I don't create another Palmer Luckey situation. But if that's true, I got to give it to Bench because, my God, what a flame out. And Envision, what a great product that was. Everybody loved it. They were up against Figma. They were up against Adobe. Really hard to make it work. I'm not sure exactly how that one went out. But I got to give it to Bench, man.

0:33And then they just blew up in spectacular fashion this past week. So at the end of the year, people doing their taxes. Taxes. God, end of the year. Bookkeeping company went up in flames. And then the founder went on like a tweet storm about his ousting. And now people are trying to figure out which VC took him for the death walk. Somebody took him for a Fredo walk. This Week in Startups is brought to you by Squarespace. Turn your idea into a new website. Go to squarespace.com slash twist for a free trial. When you're ready to launch, use offer code twist to save 10 % off your first purchase of a website or domain.

1:12OpenPhone. Create business phone numbers for you and your team that work through an app on your smartphone or desktop. Twist listeners can get an extra 20 % off any plan for your first six months at openphone.com slash twist. And Notion. Notion combines your notes, docs, and projects into one beautifully designed space with AI built right in. Try it for free today at notion.com slash twist. All right, everybody. Welcome back to This Week in Startups. I'm Jason Calacanis. He's Alex Wilhelm. And it is the end of the year. So we're doing our annual Twisty Award.

1:54these are the twisty awards for 2024 uh we've done this in the past and we're doing it again let's get started breakout startup of the year is our first category who are our nominations Alex all right so in the nominations for breakout startup of the year first on the list is perplexity this is an ai search engine that we have all heard of we have all used it raised tons of money it grew quickly it got embroiled in controversies about plagiarism and publishing and rights uh it has been on everyone's lips it has been i think a company that's been impossible to ignore so perplexity is the first one for our breakout startup of the year uh next up is blue sky now jason i know you're a big fan of x i know a lot of people love it i know some other people in my life who are on the other side of that coin blue sky i think did a reasonable job of capitalizing on some people's disagreement with x's owner and has grown very rapidly especially since the election so i think they really have broken out this year they did break out yeah uh who else we got codium recently had them on the show i picked codium amongst all of the companies in the market that are doing AI programming assistant work because I think their new IDE called Windsurf, which is the place you actually do the programming on your computer in, is so awesome that they have really pushed the state of the art forward and they grew a lot this year.

3:15So I think it kind of fits all those buckets at once. And then finally, Harvey. It's the only vertical AI company on the list, but I was going back through a list of them and Harvey said that it had tripled ARR in like the first couple quarters of this year. So to me, that is indicative of a company that has managed to take a new technology to an old vertical and crack the ARR code. All right. And who do you have as your winner, Alex? My winner is Perplexity. I think that's a great choice. They did break out. I'm going to go with Codium. I think these code helping stuff is, you know, these co-pilots are going to change the world.

3:57many downstream effects. I do like perplexity. It reminds me a lot of what I tried to do with Mahalo before AI was really available in doing these more rich search results. And I kind of got a lot of my ideas from a company called Naver, which is the search engine in Korea that was really the innovator in what we called, at the time, is this dynamic search results. So I think perplexity, I'm not a long-term fan of it because I think that a lot of the UI interface stuff that they're creating is going to be easily coppable. And I don't think that they have like a lot of proprietary data there. So I do think they did break out, but I don't think they're going to have a lasting effect, but I could be wrong.

4:39So I'm willing to hold it. And there's another one I want to add to this space, which is Kalshi and Polymarket, I want to add here as pencils, as nominations. And so then for me, it would be Kodium and Polymarket or Kalshi. If I edit those two, would that change your thing? No. So I thought a lot about the prediction markets because, I mean, we've all been watching them, especially the last six months. The problem that I have with them is that people, I think, misread the data. They look at a polymarket chart and they say, oh, 77 % chance that Jason has more than 19 sips of coffee on Twist today.

5:15And that's actually not true. It's the current market consensus is that there is a 77 % chance. That does not mean that it is actually reality. And so I think people - That's true. People don't understand. Yeah, people don't understand it. I agree 100%, but it's serving a different purpose. It's just another data point. So I'm going to stick with Codium, but I just want to put as my second nomination, those two prediction markets. Okay. Look, other names that I didn't put on the list because they're too small, I think Tolbit and Human Native, the AI media copyright marketplaces are going to be huge.

5:50Yeah, they'll be huge too. So maybe next year. Yeah, maybe, exactly. Maybe next year. Maybe next year. All right. Here we go. The next category is pre-IPO startup of the year. So this is a startup that's been around for a while, but it's before its IPO. So these are private market companies. Oh, and look at this, a little graphic. Pre-IPO startup of the year. Who do we got, Alex? Beautiful. Well, coming up in this list are names that everyone knows and loves. Core Weave, Wiz, Scale AI, Databricks, Andrel, and Space X. Wow, wow, wow. This is like everyone's favorite list of companies. Oh my Lord.

6:24yeah just looking at these um core weave if people don't know that's like what they call a neo cloud right a new cloud made of gpus they have been bought they really got lucky to have bought a bunch of these h100s early there's a bunch of financing you know uniqueness to this company i'll just put it that way um yeah and then you have databricks which just raised the largest private round ever round ever and SpaceX obviously crushing it so this one could go anywhere you know it's obvious to me that SpaceX is the biggest winner here because they're the largest they're doing the most important work so for me this is an easy one I'm going to just call it SpaceX but I'm going to give my honorable mention to Andrel now I know that's a little spicy because Palmer Luckey and I have had some differences in the past Yeah, you guys get along about as well as two rats in the same sack.

7:23Well, I'll just put it out here right now. The disagreement I had with Palmer Luckey was because we had a podcast. There was a bunch of journalists reporting that he had been fired from Facebook to because he had funded a bunch of trolls to do anti-Hillary stuff. He denies that ever happened. He did get fired from Facebook. We know that because there's been a bunch of information since that actually the people at Facebook regret doing it. Yeah. They regret bowing to the pressure and firing him. He told me he doesn't believe that these reports in the press were accurate. I said to him, well, why don't you sue them?

8:04He says, well, it won't make a difference. I actually think it would, but I'm going to put it out here right now. Consider this a formal apology to Palmer Luckey. People can clip it. They can dunk on me. if those stories are wrong and there's a significant chance they were. My hot take on it was you should never covertly fund these political trolling things because it'll blow back on you, your family, your employees, et cetera. And as a leader, just own it. And if you want to host a Trump fundraiser like Sachs did and Chamoff did, they took the bullets. In this case, the idea was he was doing it covertly.

8:39But that may not be true. And if it's not true, then I made a mistake for which I apologize unequivocally for my hot take. And my hot take would be the opposite, which is if you didn't do it, my hot take's wrong. And since that time, I am always very careful now because we know we do have some bias in the press at times. It's just the nature of the press today. They pick sides, whether it's Fox News picking a side or Rachel Maddow picking a side. Pirate wires versus think progress. Sure. This is a different journalistic world than it was when I made those comments. people do pick sides and at that time they pick a side well i'll just put it out there i now am super cautious to caveat my heart hot takes with if it's true if it's true that he did this allegedly like i really lean into that you you can look at my early stories where i might just take a press story and say oh my god palmer's an idiot for doing this i regret saying it that way i should have said if this is true yes it's idiotic to do that and make it a little less personal because he obviously took it very personal and I said it in a very personal way.

9:46So I apologize for saying it in a personal way. If it's not true, obviously my take is 100 % wrong. I do wish he would dunk and sue those publications to force a correction. Those publications still are holding their position that he was fired for doing that. He says he didn't. I don't know where to learn about it. And then I think no one wants to go to Discovery and have... But even if he wrote a legal letter, I mean, he's a billionaire. He could write a couple of letters, put a lot of pressure on them, and then they would have to put up or shut up. Squarespace is the place to build a beautiful website.

10:21You know we're huge fans of Squarespace here at This Week in Startups because every startup means a gorgeous website. People will judge a book based on its cover, but you don't have a ton of time. You don't want to waste cycles on doing something repetitive like creating a website. Oh my Lord, your team is busy building your product or service, why not use the best and most powerful website builder ever created, and that's Squarespace. And they have a new AI-powered design intelligence tool that's going to help you build something great, unique, and fast. And they've, of course, got an e-commerce engine built in.

10:55It's so simple to use with built-in payment technology. So if you're selling something online, you can start racking up that revenue right away. Squarespace will also give you all the tools you need, like an email campaign, donation capabilities, and of course, domains, analytics, SEO, all built in from day one. Squarespace has what your startup needs, and we can save you a few bucks. Squarespace.com slash twist for a free trial. And when you're ready to launch, go to squarespace.com slash twist and get 10 % off your first website or domain purchase. Again, squarespace.com slash twist, an amazing product that I personally use and endorse and the longest running supporter of this week in startups.

11:37Go ahead and tell them that you found out about Squarespace from this week at startups. Depending on anti-slap lawsuits. But anyways, Andrill is on the list. So I put the Andrill there. I mean, I know this is going to get clipped and some people are going to dunk on me. Some people are going to say I'm not apologizing. I'm explaining a nuanced situation. I have over the years realized that some of the stuff in the press, I don't trust as much as I did back in the day. And the press has taken sides. It's just the nature of the press today. It's more opinionated. It's more taking sides. So that's that.

12:09SpaceX is my obvious winner and Andro is my number two. All right. So I want to add a little bit on these companies just to provide people context why we thought they were - Oh yes. And then you're, who do you do? Yeah. But I'm going to work my way there. So Corweave, the reason why of the GPU clouds, Jason, this one was, I think, the pre-IPO one to put in. It's because the latest reporting, oops, after that spiel, was that it could target up to a$35 billion valuation next year, which is such a large number for an IPO even now in the unicorn era that, to me, it's a sit-up-and-take-notes kind of moment.

12:43So shout-out to CoreWeave if they pull it off. Wiz, don't forget, is the company that turned down that buyout offer from Google. And they have cybersecurity, I think, with some Israeli roots. And it is growing so fast. And if they're targeting a billion dollars in ARR next year, then they just they have to be on an IPO cadence. And they're just so impressive. Love them. Scale AI, I read that they I think it was tripled or quadrupled their revenue in the first half of this year. Just a super impressive company was early in the AI thing. Clearly an IPO candidate. And I didn't pick Databricks because I am convinced that Aligazi is going to die as the CEO of a private company.

13:23He's never going to take it out. Really? And I'm saying this to jinx it. I'm saying this to deliberately anti-knock on wood to get the company to eventually go out. I picked Corweave. And then I changed my notes to Andrel because we talked before the show. Oh, so Andrel's your number one. Okay. And Corweave's number two. No, I meant Corweave. I changed it because I thought we were doing one for the two of us. I'm picking Corweave. I think it's going to be such a hot IPO and I can't wait to see the gross margins. Who's your number two, if I were to give you a number two. Uh, so space X is probably it, but to me, I guess the bias I had in this list was who, who might go public next year, right?

14:01Who is there a chance that we'll see them list in 2025. And to me, I don't see space X doing that. I haven't heard rumblings. Imagine if Andrew did with Palmer's, uh, profile and the cool videos, they're putting out. I mean, Andrel would be like the IPO of all meme stocks. That would be the meme IPO of all time because it's just like people, you say like new military technology, you just think Andrel. It's kind of like Uber or Stripe or SpaceX in that regard. You say space, you say finance, you say transportation, like one name comes to mind. So I mean, I don't know if you like of, yeah, they are the Xerox.

14:39They are the Uber. They are the verb. Also, they're part of a consortium, Jason. SpaceX and Andro and some other companies are working. Well, a reported consortium. A reported. It hasn't been. Nobody has. Allegedly. If it's true. Allegedly. If it's true. The lack of pushback, I think, indicates that there is enough fire. There's definitely conversations occurring, probably. I don't know who's driving it, but I love competition. We love competition. Main character of the year. This is something we've talked about as the main character every week on This Week in Service. we try to think who's the main character this week and get him on the program uh could be a minor character or whatever but we love the main character this is the person who takes up a lot of the energy in the room look at the beautiful graphic who do we got so first of all the paypal mafia this is several names in one a little bit of a cheat but let's be honest it's the same crew we've been talking about for a while all in one bucket then just because i know jason is her number one fan we made sure to nominate lina khan as the main character of the year then also the CEO of TikTok, Xiao Chu, I think that he has flown more under the radar this year than he should have.

15:46There's so much else going on. We forgot that TikTok has been on this countdown to destruction for so long. And now Trump's weighed in, the Supreme Court's involved, an easy candidate for a main character of the year, even if we didn't talk about him quite as much as our last candidate, Sam Altman, who has been, I don't know, Jason, ubiquitous for... Crazy, yeah. I mean, well, I mean, he's the dealmaker of all dealmakers. maybe a strength, maybe even like in terms of superpower, maybe even sometimes your superpower can work against you too much deal making to create a bit of chaos, right? So this is a hard one because main character of the year is not necessarily correlated with like success or whatever.

16:26It's just kind of like you're talked about. It could be infamy. It could be praise. It could be any of those. Who did you pick? Ladies first, give it a shot, Alex. Go ahead. I picked PayPal Mafia because I think that, yeah, I felt a little bad. Going back to the broadcasters takes being spicy, I now understand exactly why award shows will take a big category and give it to someone random because then it gets people talking. I could have picked Lena Khan here and pushed your buttons and made you do a reaction. But I really do think that the PayPal kids have been so inescapable that nothing else makes sense.

17:02on all sides. I mean, even, you know, Keith Raboy, Reid Hoffman on the other side of the aisle politically. I mean, they're just everywhere. And so it's pretty obvious that the main character of the year was the PayPal Mafia. Obviously, Elon, Teal, Sax, Musk. Exactly. Keith Raboy. It's obvious that they're the main characters for 2024. But I'm going to give a shout out to Lena Kahn as my runner up and my favorite because my lord, the wrath of terror and suffering and pain and anti-capitalism that she put into our industry has caused complete chaos. I am so glad that she is going to be a partner at Y Combinator.

17:44Congratulations on her securing the bag at YC. We need to have buttons on the show. One button that I can push that says, Alex does not entirely endorse this view. And then one for you entitled, I'm currently joking. She's not yet been hired by Y Combinator She will be. Guaranteed. Yep. You know how I know? She spoke there like three or four times. Like, what is she doing going there pandering to startups? The only way she can justify her anti-capitalistic, anti-free markets, you know, approach is to say, I'm doing it on behalf of the tiny startups. When in fact, she has damaged tiny startups by not allowing there to be exits, which then would allow VCs and LPs to recirculate capital and allow founders to secure mini to modest bags that would then let them create a diaspora of people who were part of the Figma purchase or this purchase or that purchase.

18:42So I will give her zero credit. She did not help tiny startups. Her reign of terror is over, but I guarantee you she will be, Gary Tan will offer her a position. I'm guaranteeing it right here. I'm just laughing because every time we bring this up, I'm like, Jason, you do know that I have a blog post from early 2023 all about this exact topic. Well, everybody can look that up on Cautious Optimism. Here we go. I'll throw a link to it. All right, let's move on to our next category. This is fun. Okay, Bag Secure of the Year. Let's see who got nominated. Okay, Bag Secure of the Year. The snow effect is great.

19:20I love the snow. Yeah, it's pretty great. Yeah, here we go. All right, so Tabular, HashiCorp, EsteraLots, and XAI. Now, I'm going to explain these categories because not everyone's going to know what I'm talking about. Tabular sold to Databricks for reported, allegedly, we've heard,$2 billion. But the reason why I think they are a candidate for bag secure of the year is that there was a bidding war. I think it was Snowflake and Databricks. And I think they got a exit valuation that was insane. But Databricks is rich. So I think Tabular made off with the bag and they are absolutely laughing on their pile of gold.

19:59Also, people behind them, Andreessen Horowitz, Altimeter, and Zeta Vitcher partners probably did very, very, very well. founders know that every missed call is a missed opportunity. Customers don't want to wait. They will call someone else if you don't pick up. But if you use open phone, you're never going to miss another customer call. And guess what? It's super affordable and easy to use. People used to spend tens of thousands, hundreds of thousands of dollars putting in a corporate phone system. And now for just$15 a month, open phone will give you a business phone line and complete control of your destiny.

20:35Want to know who's answering customer calls and how they were handled? OpenPhone can do incredible things like sync with HubSpot and give you AI-powered call summaries, automated responses to ensure you don't miss a single ring. Well, that's all built into OpenPhone. And if you've got an existing phone number, they will let you port it over at no extra charge. Get 20 % off your first six months. What an amazing offer at openphone.com slash twist. that's o-p-e-n-p-h-o-n-e dot com slash twist for 20 off for six months hashi corp i picked this one because it exited 42 premium 6.4 billion exit to ibm great ipo great technology company and then estera labs from the very small ipo classic 2024 went public at about 36 a share now it's at 140 150 riding that wave and then jason one company that we talked about at the liquidity summit and recently xai which raised like 12 billion in one year wow i'm going with xai i'm just gonna put my winner out there because this is a massive amount of money to raise and they built colossus in like under 60 days it was like unbelievable it's so clear but who did you have who did you have i picked tabula because everyone's complained about exits everyone has said we there's not the money we're circling and here's an example of a multi-billion dollar exit of an early stage company that still had growth potential ahead of it.

21:58And it was turned into Databricks stock, I presume, which is liquid because they have secondaries. So there you go, VCs. You're welcome. Okay. Our next category. I always like to call this one CEO of the Year, who is not Elon Musk, because every year Elon does such amazing things across so many companies that he kind of runs the table. So we'll update the graphic to say CEO of the Year. and then in parentheses, that's not named Elon Musk. Elon Musk kind of gets it as a default because of all this crazy stuff he's doing. Yeah. Busy man. But, you know, here, look at this list. I mean. So Jensen and NVIDIA has been talked about ad nauseum, an amazing CEO.

22:39There's a great book that just came out called The NVIDIA Way that I'm going to get a copy of. People are raving about. I can't wait to learn more about how he runs the company. Let's do like an acquired episode where we just do like that book. We'll both read it to a book club. Maybe Elon will come on and do a book club with us. That'd be great. I can get the author to come on probably. We're Twitter friends. Oh, fantastic. Yes. I like having authors on only because as an author myself, it's kind of a nice thing to do, to have read the book, have meditated on it, and really talk about it. I'll see if I can get us some copies, and we'll do that in January.

23:09No, no. I'll just buy it. I never take free copies. Always pay. Oh, no. Yes. I was going to buy us some copies. Oh, okay. I'll buy it on Audible. Just send me the link. I'll listen to it when I'm speaking. And by the way, if you have a writer book, I'll buy it. Jensen, of course. Alex Karpalantir. Jason, you had on the show just a couple of days ago. We went through Palantir's amazing appreciation this year. And talk about being right and being early. Palantir has been beating the same drum for a long time, and now they're ripping the rewards. Yeah. Steve Hoffman over at Reddit. Reddit, we talked about it on the show.

23:38An insane run in the stock market this year. And we talked about Reddit Answers recently, how they're going to bring back that search market share. Love that. Fiji Simo from Instacart. Instacart is not growing as fast as these other companies, but I think she's been very impressive. because the company has found a new, better footing as a public company, not as a startup. So she's done the thing that people say you struggle to do with your public, which is go through layoffs, retool some stuff, build out a secondary business. And I've known her since the IPO, and I'm very impressed with her. Let's get her on the pod.

24:11Invite her to come on the pod, yeah. Consider it done. And then Lisa Su, she was the Time CEO of the year, and that made me look more into AMD. and what she's done with that company. I think Lisa probably deserves CEO of the last five years because she's really saved that company. But that's the list of CEOs of the year. Jason, apart from Mr. Elon, who is your winner? I mean, listen, you could say so many nice things about each of these candidates. They've all had an incredible, they've done an incredible job. And obviously, as public CEOs, you can just see how amazing they've done. But as much as I respect what Steve and Alex Karp did at Palantir and Reddit, man, and then Instacart, yeah, you know, that's like an AMD.

24:58We're kind of like comeback stories. You got to go, Jensen, because we've just never seen somebody dump this amount of revenue quarter after quarter, year over year. I mean, it just doesn't exist as a precedent to see a company doubling and tripling revenue. You know, that's kind of scale. So it's got to be Jensen. It's got to be Jensen. It's got to be Jensen. Was that your pick as well? Yeah. I mean, once again, I could pick someone who is, you know, a silly pick that isn't true just to gin up some controversy. But Jensen has so earned it. And again, it's a success story that is decades in the making that looks like an overnight success.

25:41but certainly wasn't. Twist interview of the year. This is a great category. My lord, look at all these great folks on the list. So, what we're going to do here is we're going to run through the list and then play a short montage of little clips from each of these interviews because we like to get fancy here at Twist. So, we have Alexis Ohanian from episode 1893. We have Mr. McKay from Intercom, episode 1962. A very recent one, Shashira Mahotra from Coda and Grammarly, episode 2063. That was last week. but we loved it. And then Josh Silverman, Etsy, episode 1985. Wow. I mean, these all brought the thunder.

26:19Let's play our little montage. The power of community was able to sustain Reddit after the sale to Kanda Nast. In those four or five years when it was just a part of Kanda, they didn't know what to do with it. It kind of just languished, but the community kept it alive. The community kept growing and engaging, and there aren't many products that should get away with basically doing nothing for five years and still succeed year after year after year. And Reddit managed to, and I think it's a testament to the community of those users. Say if you think about the customer world, it's like, hey, it's all one customer.

26:51Let's provide one seamless, beautiful flow and one incredible platform to do all the above. And that's actually not wrong thinking if all you're doing is having a fun academic tech strategy conversation. And this was definitely a case of us saying, we're going to build this together. We have these two vision memos that are quite similar. And we came up with what we felt was a reasonable split between them that I think is appropriately fair for everybody. But I think it's much more looking to the future than it is looking to the past. There's about 30 ,000 sellers in Ukraine selling about$200 million worth of goods to the Etsy community.

27:30That's a lot of hard currency going into Ukraine. When the war broke out, we had all these people come to Etsy and just start searching for Ukrainian sellers because they wanted a way to connect and they wanted a way to support people. It's those kinds of stories that are happening every day on Etsy that would never happen anywhere else. Jason. I mean, tough one for me because I enjoyed all of those conversations. And thank you for creating the clip because, God, it brought me back to those great discussions. I find it very funny how good money looks on Alexis. Did you see how stylish that guy is?