AI Demos: Sunny’s Back with Luma Labs, Kling, Claude Sonnet & Getting AI Native | E1976

0:00There is a lot of innovation happening now. and it's faster than ever. And it's coming in the way of new types of models, open source models, agentic reasoning, invoice. And so in the second half of this year, J-Cow, we are going to have some surprises that no one was anticipating. Okay, there you go. So that's inside information. That's the inside line or a prediction. Generally, I'm telling you, we're going to be more surprised in the back half of this year than we were when OpenAI first came out. Oh, it's a big claim. It's a big claim. I don't know how we phrase it as a bet, but what you're saying is everything that happened up to now is the epilogue and that the story is coming.

0:35The real story is coming. The story is coming now. This Week in Startups is brought to you by NetSuite, the number one cloud financial system bringing accounting, financial management, inventory, and HR into one platform, giving you one source of truth. By popular demand, NetSuite has extended its one-of-a-kind flexible financing program for a few more weeks. Head to netsuite.com slash twist. OpenPhone. 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.

1:17And DevSquad. DevSquad helps startups design better products. If you need UI and UX expertise and don't want to hire an entire design team, head to devsquad.com slash startups and book a call. Mention that you are coming from Twist to get 10 % off. All right, everybody. Welcome back to This Week in Startups. Madra Mondays are back. Here is my guy, Sandeep Madra. I don't know if we're releasing this on a Monday. We're taping it on a Monday. Taping it on a Monday. Welcome back to This Week in Startups. Good to be back. Yeah, where you been? Where you been? Everybody's asking. Where's Sunny? Where's Sandeep?

1:52business called fundraising and you know how it is when you're doing that the calendar got prioritized for investors and you you know you've had to do it too i don't know jacob actually i'd like some advice from you like you're able to keep the shows going and you have multiple shows and fundraise but for me you know fundraising you know it's kind of like took over my calendar it's like yeah we're meeting with this and you can't really move them around so how did you manage that. I broke myself is how I managed it. I mean, if I'm being honest, I didn't manage it. It literally broke my brain. We are living in the toughest fundraising environment since probably the dot-com era, possibly right ahead of the great recession, I would say.

2:37And so with an AI company, that's a notable exception, obviously. But even still, because there haven't been a lot of returns, If you look at, you know, IPOs, they've been few and far between and they've been muted, right? Instacart coming out at 8 billion, private valuations being 30 or 40 billion for that company, which means LPs and VCs are less apt to put money into products. So we've had a little bit of indigestion. The gears are a little gunked up. We talked about it on this pod a couple of times. M &A is really anemic. We used to have a very vibrant mid-market for M &A since the Biden administration hired Lena Kahn.

3:19That has destroyed the startup space. And I think putting aside any politics, how you feel about different presidential candidates, this is an area that really matters to America's viability. If there's no mid-market for selling Figma to Adobe or Instacart to DoorDash, whatever it is. Or the little teams, the little acquisitions. And the tuck-ins, like you're referring to,$10 million to$100 million tuck-ins, that mutes investment. So now you've got LPs and VCs either not investing in as many companies, not investing as many dollars in companies, companies not being able to raise funding, which then means less job creation, which means a less competitive America.

4:00You have to have two different concepts for M &A. M &A for Facebook, Meta, Google, Amazon. Microsoft should behave one way. In other words, companies over a trillion dollars. They should have one rulebook for M &A. for the mid-market there should be a different rule book so if uber and airbnb coinbase you know call it the 30 billion to 250 billion crowd if they want to do interesting things i say let them you can review them and then i would say any acquisition under i don't know let's pick a number one billion dollars just you can do whatever you want under a billion dollars you can do everyone and if you've watched we've now had two ai acquisitions in the space where they They were aqua hires with leaving the shell company and somehow money's flowing to the investors.

4:49They're getting some of their money back somehow through like backdoor contracts. It's all a giant scam, a hack to route around Lina Kong. So if you tighten your grip, more deals will slip through your finger. So Lina Kong is a complete disaster and binds a complete disaster when it comes to this M &A situation. It also ties into like incentives drive behaviors, right? Like these big companies can also put offers in front of people which look like acquisition, right? Which, you know. Say more. Explain. Well, look, if you're Microsoft and you want to staff up a new AI division, as they did, or you're Amazon and you want to staff up an AI division like they did with the Adept thing that just happened last week, you offer the founders$10 plus million a year or over two years.

5:44Maybe. If you stay there, let's just say you get 10 million a year and you stay there for five years, right? That'd be probably the equivalent of you selling a startup for$500 million and you owning like 10 % of it after a couple of years. Yeah, you and your co-founder are 10%. Exactly. So now what is all this crazy M &A philosophy of future competition done? They just routed around you, Lunacon. Yeah. They routed around you and you accomplished nothing. And then what happened was the big companies get stronger because now they don't have the competitors in the smaller companies. So you're actually having the opposite effect.

6:19And the investors kind of get weary where the investors are like, hey, I'm not sure I want to do this because what if the team gets scooped away or decides to go away or walk away? Yeah. So there's unintended consequence. Show me an incentive. I'll show you an outcome. And here's what happens. So you've got to be very careful if you want to put your thumb on the scale in a con. You could just tilt the scale and everything goes flying off the scale and you don't catch any of it. You don't do any of the things you intended. So it's just a terrible approach. It's been executed very poorly. But let's get to demos.

6:51Everybody wants to see demos. I've been playing with ChatGPT4.0 and the new Claude Sonnet, and I pay for both of those, obviously, for my companies. And it's getting pretty damn impressive. Well, yeah, Claude Sonnet is where I wanted to start today. As we get into it, I just want to give credit here to this really incredible thread that Min Choi put together. And then I'll show a demo from it, but I will give this credit real quick. He really went across sort of a bunch of different ideas and aggregated them. So here's build an iPhone app prototype from scratch. So really the thing that we're going to talk about when we do Claude is they have this mode now where there's like on the right hand side, You have that enabled where it can do sort of an output for you that's different than the text output.

7:37And so here, you know, someone made an app. I'm going to demo this next, which is make an interactive dashboard from an earnings report. You can make games. You can go through this, right? You can get insights on business, one-click SEO tool and not. So we'll put a link to this. But what I did here was I basically dropped in, you know, Tesla's Q1 2024 earnings report. A PDF. Yeah, a PDF. And I said, come up with a detailed analysis and summary with stock recommendation by carefully reading this report, put together a nice and interactive, but highly detailed report. And so here's sort of the summary, which we were all used to getting.

8:15What I got on the right-hand side is an interactive report. Wow. So this is the presentation layer. So instead of just seeing text that you would copy and paste and start building a deck, it knows that you want an interactive report. And that means it's making something beautiful. Now, I don't know what format that is. It looks like HTML, but well done. Yeah. You have to enable this thing called artifacts. If you turn that on, right, in the features preview, you know, I'll just copy this prompt over and I'll add in a, you know, here's NVIDIA's last 10 queue, right? and uh you know you're sort of limited to the upload side which i think is like 30 megabytes or something like that more than enough for any kind of text yeah and i like how you tell it to be like thoughtful or something or to be thorough like the ai needs to know that the just just you know just in case it doesn't know just in case it doesn't it doesn't want to do its best work you've given an encouragement to do its best work we have to be mindful to our future overlords Absolutely.

9:14And so what you see here, it's obviously doing the standard analysis. And what it's going to start doing once it's done this, it's going to basically open a tab to the right-hand side. Wow. And you see here is where it's starting to create the interactive dashboard. So it's basically writing all the code for it, right? So this is being done in HTML. This looks like JavaScript or something, right? And so that it can be interactive. And so at the end of that, you'll get this. And so now... So it says vehicles delivered, operating margin, the production, and then even a chart. Yes. Their deliverables, revenue, net income.

9:51Exactly. And then a quick summary. And you can download this, you can copy it out. So think about how powerful this is. If you have a bunch of data from, say, an event you just ran, like the Liquidity Summit, if you have all that data about how people interacted and how many people went to different sessions or whatever it was, you throw that in there. ask it to do the work. And basically it comes out with a really, really nice report for you. Whereas before all we were getting were these kinds of text updates and you had to take these and go and copy and paste them into PowerPoint or do something.

10:24Now it's creating the dashboard for us. This is a huge jump forward. The less your business spends on operations, multiple systems, and on delivering your product and service, the more margin you have, the more money you keep, You want to get fit in this new era here in Silicon Valley and in tech broadly. But with higher expenses on materials, employees, distribution, and borrowing, of course, everything is costing more. So to reduce costs and headaches, smart businesses are graduating to NetSuite by Oracle. NetSuite is the number one cloud financial system, bringing accounting, financial management, inventory, and HR into one platform, giving you one source of truth.

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11:39Head to netsuite.com slash twist. That's netsuite.com slash twist. So I don't know if you've tried this with your teams yet, J-Cal, but give me your thought. I haven't. It's absolutely extraordinary. And we have a lot of information that I would like to put through this. So one of the things we've been doing since we're an at-scale venture firm doing 100 investments a year, think like 25 % of what Y Combinator does a year, maybe 20%. They do 500 companies, we do 100. We get a lot of information from those companies back. We put them in a database. We're currently using Notion as our database. And to be able to pull that data from them and then say, hey, make us a report, which of our companies are in group one, two, or three.

12:17And we have a very basic... I like creating simple systems. We put our startups into three buckets. One is high growth, consistent growth. In other words, they're probably series A, series B, they figured something out, they have product market fit. Bucket two, figuring out product market fit. And then number three is they've run out of money. I don't know, the co-founders broke up. In other words, they're still active in some way, but something's in all likelihood going to wind down and they're trying to find a buyer and they're in the middle of M &A. And we have humans figuring that out, analysts and researchers, but eventually AI should be able to figure that out.

12:56And we should be able to then do some analysis over time of companies and say, hey, which companies look like they might be the next to move from group three to group two, from group two to group one. Yeah. And look, this is the one that we just did. So it's slightly different. So you can really tune this and it comes up with incredible. Incredible. I've been using this quite a bit because I think if you ever have any task to do, and even if you just want to brainstorm for yourself just to get this visualization. So So I find, like I said, this type of prompt, which definitely came from one of the threads that Min shared.

13:29So I want to give him kudos for it. But it's a really useful prompt, and it's powerful, and it's a great way to analyze a bunch of things. Yeah, these things are definitely getting smarter. I give this, this is an A plus for me, I'll be honest. I kind of finally feel like these LLMs are not doing random moments of interesting potential. I feel like they're nailing it. And I'll give you one example. Maybe you could just fire up chat GPT 4.0. And since you got the screen there, we're opening up an accelerator and a studio in Austin, Texas. So you heard it here first. And so. All right. And so I'm spending a little more time here.

14:07And imagine you were looking for, I don't know, a personal assistant, right? I don't know how much a personal assistant. I know what that costs in the Bay Area. I don't know what that costs. So here, just write the sentence. Please tell me how much a personal assistant costs on an hourly basis in Austin, Texas. please cite five sources and please put the high low and medium salary in a table and i did this in 4.0 and the result to me was extraordinary okay great oh here it goes okay so when i did this it was unbelievable to me so here you go a personal assistant in austin low salary medium salary high salary and i just said hey can you link to it and it gave me a similar result here And so it's really, and you remember when it used to go out to Bing last year, you know, we do the search and it never worked and it crashed.

14:55And like we'd ask it to put stuff in a table and sometimes it put in the table, right? Sometimes it wouldn't. But here it is. It's now quoted salary.com. And now just give it a follow up and say, give me five different sources of data and average those sources. And so when I did this and I said, give me five different sources, it gave me Glassdoor, Indeed, salary.com. And I was just blown away because when I got, here you go, ZipRecruiter, ZepDia, I don't know that one, Glassdoor, Indeed, Salary. And now you start to see a range of them and you see the sources. This is what a college-educated researcher would have spent in our companies in Silicon Valley.

15:36How many hours? Two, three, four? Half a day. Half a day. This is like, you know, the way I think about it, you'd come in in the morning, you'd tell someone, And maybe in the afternoon, you'd get an email back with this. Right. And so this is wasted work for a human to do now in the age of AI. So when you see that companies aren't adding a lot of positions and you're wondering, why is that happening? How is Uber and Google and Facebook growing, whatever they're growing, 15%, 30 % year over year, adding billions of dollars, but they didn't add any people. This is a perfect example of this. I would normally ask somebody on my team to do this in operation.

16:13The amount of time for me to explain to them and get the result is greater than the amount of time it takes me to ask chat GPT-4. It would take you longer to write the email because you'd have to be a little bit more formal and detailed. Correct. And I'd have to tell them why I'm doing it and all this stuff. So this now is really becoming, as I said, extraordinary. So I just want to say to the team over at OpenAI and chat GPT-4, incredible job on giving citations here, which we're sitting here a year or two ago. we would have been complaining about citations. But this idea that the work is actually good enough to put into actual production is something we saw with developers checking the work.

16:53Now we're seeing it in operations. We're seeing it in data analysis. This is heating up, right? We're trying the same thing just in Claude Sonnet, right? Yeah, and Claude Sonnet did a very good job at this. Yeah. So here you go. I mean, boom. And you could actually create a visualization. Yeah. Now, what you have to worry about here, I think, is this goes back to our discussion about is this stealing or not? And so why would I ever click through to ZipRecruiterSalary or Indeed.com? There is no reason for me to ever go to those websites again. 100 % of my attention and money is going to Claude and to OpenAI.

17:34I'm paying 20 bucks each for these services, maybe 30, I can't remember. yeah and so not only is the human being taken out of this that would have worked for me previously when i say previously last year last year i had humans on my team working on this i do no i no longer have those humans working on our team this is definitely a real life problem for you where you were like hey i need to get an assistant please help me so i know yeah now the next phase of this would be write a job description okay it's going to do that very easy so now just say write me a job description for this job for somebody with five years of experience and give me 10 bullet points to choose from for the skill set.

18:12That would be something, again, I would ask a human being working in Silicon Valley or working remote, let's just call it$50 ,000 to$100 ,000 a year salary, depending on if they were right out of school or if they had five or 10 years. And so here we go, boom, about the role, key responsibilities. to write up a job description would have been a ton of work as well. So now the job description is done. So if you're an HR professional who's been in the field for 10 years and you work with management to tell them in an interactive discussion, how much it costs to hire people in a city and to write a job description, it's done.

18:51Now, the next phase of this would be post this to five services, use my corporate card. And then the next phase of this is sort through the candidates, ask them five questions on email, and then rank them for me and put them in a table and schedule an appointment with them. You want an agent that's designed specifically to work on this for you, both in real time and offline, right? Where it starts and then once it's going, it's like, hey, look, post it, come back, and even set up interviews, maybe even do a screen of these folks. Well, yeah, that's kind of the next part of it. So if you're an HR startup, these kind of things are easy.

19:27The next hard part is, of course, the agent doing stuff. And now when we talked last year about the Maestro concept I had, where I'm in Maestro running a company, if you're a startup, you're not hiring an HR department, obviously. And you might have hired an HR consultant, or you might have hired the proverbial jack of all trades, right? The utility player on your startup. There was a place for the utility player on the startup. I don't think there is anymore, because you can just do this. If you're the sales executive, you can just do that. So I think there's a large group of administrators, operators who are on the cusp of just being 10 to 1.

20:05So if you had 10 of these people who are operators in a 100-person company, which is what I would say, like 10 % of people are in operations, I think they could just go down to 1. Maybe 2 if you want in redundancy and people to answer requests over the weekend on call. Okay, juggling multiple devices and apps to run your business is a mess. We all know that. open phone is here to make that simple. I have an open phone number. I use it to communicate with founders. And it really works for me. I have a desktop app. Boom, I can go in there, I can do voiceover IP in this beautiful, elegant app, right on my phone or on my desktop.

20:35I use it a lot on my desktop. I'm being totally honest, because I have my headset on. And sometimes founders want to do a call, they don't want to pop open a video conference, my sales team loves it. Why? Because they get to keep their private phone number for their private phone number. And then they have all of their business stuff track in one location. So if they need to make a phone call to somebody they talked to last week, they can see their call history, click on it, send a text message and start a phone call with that person. And the ops team uses it. When we have people calling, they have questions about their investments, LPs, etc.

21:03We have a round robin phone number. So it will forward the call to two or three people on our team because we like to have really good customer support. And all this is easy to do with open phone. It's super affordable at just$13 a month. But Twist listeners get an extra 20 % off of any plan for the first six months at open phone.com slash twist. What if you have an existing phone number with another service? No problem. Easy peasy, lemon squeezy. Open Phone is going to port them over at no extra cost. So head over to openphone.com slash twist. Start your free trial. Get 20 % off. You're going to love this product.

21:31It is so affordable and it's so elegant. Just to the product team at Open Phone, great job. I look at products all day long and yours is elegant and simple and powerful. Well done. One really good AI native. You know how we used to say like internet native and then cloud native. Mobile native. Cloud native. Exactly. the mobile natives ai native yeah ai native that just thinks the first thing they do is go here and try to you know get it done i just want to give clothes on it in a plus yeah and i want to give and i want to give 4-0 an a plus officially because we've been we've been off for a month you've been busy fundraising congrats on getting that done hopefully yeah and so i just want to get both these a pluses these are ready for prime time and if you are listening to this and you're wondering why you're not getting a job you were previously considered a very valuable contributor and now you're wondering why you got laid off and why you're not finding a job, it's because the stakes have gone higher.

22:24The stakes have just gotten higher. You have to provide more value. And what is the more value? Well, what can't this do? I described what it can't do. It can't post it to Indeed and it can't sort through the resumes, etc. And so every company right now is just figuring out, you know, I have 10 people in ops, I need four. I have four people in ops, I need two. I have two, I need one, whatever it is. Or twice as much productivity and I may have to switch some people up. Yeah. And so this is just what's happening at startups and big companies. And big companies, I think, are not AI natives, but they will be soon.

22:56And so if you work at a big company and you see me do something like this, and your HR department's the same size, you probably need, and listen, I don't want anybody to lose their jobs, but those people need to, half the people need to be cut loose and reassigned to something more productive in your org. Maybe it's sales, maybe it's marketing. There might be some other place. But I suppose this level of efficiency is coming to everything. And in sales, unlike operations, being more effective just means you increase your sales per person. And can I add one thing, Jacob? Yeah, please. Yeah, I think we both give them A-pluses.

23:25I'm an A-plus on both as well. I think really well done. More and more powerful by the day. You know, the other thing that's happening is the model rollouts are just happening on a continuous basis now, right? And so you just have to start using the tools and maybe use more than one of them. and you'll see the advantages that come from it. The other thing that is related to, so you have to change your behavior, you have to become an AI native. If you just did sort of what JCal was asking for and dropped it in Google, look, and I have generative search enabled, look at how weak this result set is now.

23:57What is going on? In fact, I feel like Google is going backwards here. I mean, it's giving you the lengths that Sonnet and Foro ingested very quickly. I mean, the speed is also the really, you know, a very important Google asset. You know, if you make things faster, consumption goes up and usage goes up. Here we go. Like these things are going really fast. I do think ZipRecruiter and Glassdoor in these places have to block the crawl. Have to block chat. Unless there's a relationship. Unless they pay per citation, per query, per whatever. Because these things are going out to the web. And there is no reason to click through to ZipRecruiter or Indeed or Glassdoor and go to their website and get bombarded with ads, pop-ups, whatever it happens to be, calls to action, etc.

24:50Just since we're here, J.Cow, this wasn't even part of the plan, but I'm going to drop it in Gemini Advanced as well. Okay. Gemini Advanced. Yeah. So Google's Gemini Advanced. Okay. It didn't do the table. Oh, no, it did do the table. It did down here. Yeah. Oh, and let you export to Sheets, which is, I remember that feature. Such a great feature. Okay. I mean, it looks comparable. I mean, they're all comparable. I started also doing this with product searches. So I was looking for a new portable speaker. I was just curious, like, what the highest rated ones. And I asked it specifically, tell me what's on Wirecutter.

25:22Oh, really? Yeah. Oh, okay. So go ahead and do this. What are the best portable speakers? Please cite Wirecutter. Put it in a table with a link to Amazon. give me up to 10 now what's interesting about this is the way wire cut and other people who do the review sites make money is they get an affiliate link and so here it didn't put the links in but if you do if you cut and paste this and you put the same one into chat gpt 4.0 or omni it gave me an amazon link obviously without the wire cutters thing now what you're going to see is like the wire cutters behind a paywall so how does it not always not always sometimes it's not yeah um because i do this all the time oh here you go all right and there's the amazon link okay um and i think you could put in here give me uh when you do the follow-up just say give me the same table with a quote from wire cutter about each one yeah modify the table with a quote from wire cutter for each product i hope somebody from the new york times is watching this because here's the wire cutter quote and by the way this is a much better illusion i don't know but it's really good i mean i don't know i've not done this but i'm gonna start doing it because i'm i always do i whatever i might my go to is this search but like on you know uh on google and then i basically end up on wire cutter right like that's it so i use google as navigation in those cases so you know if you have other rating sites like i also like pc magazine they have a lab or something like that so you know you can start to say put the a quote from pc magazine put a quote from here put a quote from here that's what a personal assistant does so i did this and i'm like well why am i getting a personal assistant again and that it's for real world stuff right so if it does this then we know it's hallucinating though you got to be careful but let's see and they had a quote from pc magic for each product yeah there you go this is i can't do it you go it says restrictions oh so wow whoa that's the first i'm seeing it it seems that i am unable to retrieve the PC mag reviews directly due to restrictions on their website.