Google’s AI Design Tool, Salesforce’s $8B Comeback Deal, and M&A Momentum Builds | E2131

0:00I also think Jason, it shows that Google really wants to do everything in AI. Like they're trying to flood the zone here and apparently to some success. So points to Sundar and his team. I got to say they were behind in AI and now we keep talking about him. So that's all. And as you can see here, we've shamed Lon, Alex, because of his prompt and it worked. It worked. He's going to do better. His prompt will be better next time. I think prompt shame is the next big thing. I mean, if you get people to use AI, we should be looking at people's prompt and saying, really, that's the best prompt you can do?

0:33this is what doing extra this is what doing extra gets you on twist you see a thing and you think you know what I need to test this out myself I'm not just going to take I'm not just it's okay Alex you did a completely serviceable job that's that by the way in Jason speak is is is serviceable congratulations on doing the bare minimum

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1:36All right, everybody. Welcome back to This Week in Startups. It's your boy, Jake. I'm here with Lon Harris and Alex Wilhelm. One's in Austin, one's in New York, and one is in Singapore. I think you can guess I'm the one in Singapore. Gentlemen, how are we doing? What time is it there for each of you? It's 9 a.m. here in Austin, Texas. Okay, a little early for you. It's 10 a.m. here, but I kind of enjoyed starting work today at 6.30 a.m. because I feel so productive. I have gotten so much done, Jason, in such a short amount of time. If you want to feel productive, every time I get jet lagged, like I am now, there's this incredible feeling.

2:12You fall asleep at like 6 or 7 p.m. when you get here, wake up at 12 or 1 a.m. and then stay up all night. So at 4 a.m. I decided to go for a walk for, you know, two or three miles around town. This happens to me every time. I'm in the Middle East. I'm in Asia. I'm in Japan. I wind up going for these 3, 4, 5 a.m. walks around the town and it's uh singapore is a beautiful place it's the size of new york city um but somehow they've carved out a niche here that they are like hong kong hong kong was earlier in my life like this incredibly central important district and so i have a list of places i haven't been ah and uh when the speaker bureau is asked hey would you like to speak at this incredible extraordinary event would you like to speak at this incredible extraordinary event here's a briefcase you know it's a pretty amazing life i have to say to be wanted and and to be compensated for flying around the world i'll leave it at that it's it's pretty outrageous but uh you know i saw this thing uh on the twitter i guess it was called clear space and i sent it to you guys yes we have it here what's her name alexa alexia um bonanza is my uh former boss jason i remember meeting her when she was but a cub reporter in la she wrote a story about me back in the day um and uh yeah she i guess like all tech crunch vcs went on all tech crunch went on to become a VC and got married.

3:51And she's Greek, so we have that. And here's Alexia's screen time, if you check this out. And I guess the concept of the screen time network is that you share your screen time so you can be shamed. I think the goal is to lower it. Yes, the goal is definitely to lower it. That's why they're calling it Ozempic for screen time. That was Alexia's joke about it. She said, the world does not need another AI SaaS. What it needs is Ozempic for screen time. And as you can see, Jason, from her chart here that I have up on screen, she's making a lot of progress over a one-week period. From 12 hours in one day to just over two, looks like.

4:34Well, I asked Oliver the intern. I bought him a phone. I logged into it as me. And I'm on here. And I had him use it for 14 hours a day. And then I have him slowly going 30 minutes down so that I can publicly virtue signal that my screen time is. Oh, OK. So I have a burner phone to do that for me. Yeah, I got it. I got to be honest. I get I like the idea, but I don't know if shaming is is the thing that's going to work here. Like, I just I don't feel like you change. You're going to change your habits that way. I feel like you're going to do it for a few weeks and then go right back to your old.

5:08OK, your old. I feel like it's a it's a lifestyle change, not just like, oh, I feel bad. I'm going to lower these numbers so that I don't get embarrassed. Let me let me back into why you're very politely wrong. So one, this is from a company called Clear Space. They're a YC backed company. Winter 23 was their batch team of five, according to their profile over there. This, Jason, as far as I can tell, is a viral marketing stunt by the company. Clear Space, their application for iOS and Android is designed to help you limit your screen time. this is kind of um almost like a joke social network in a polite sense to show off what you're doing now laun the reason why i actually kind of disagree with you is what gets measured gets improved and i feel like right now my screen time information inside of ios is so buried deep down in the menus and the relatively lackluster software that apple has on there so i just don't see it but if i get your weekly i get my weekly report like they they'll ping you once a week with your like here's your weekly screen time and like i look at it and i agree it would be good to limit it like i'm not i'm not debating the overall premise here i just feel like like if i was gonna if i was gonna make a change i would have to like change something about my lifestyle that gets me off my phone like i'm gonna start taking a walk every day like that would get me off my phone successfully just being like oh i don't want jason and alex to see how much i've been on my phone I don't know if that's like a real fix that feels like a band.

6:33No, I think you're underestimating the power of shame. Shame is something we need much more of in our society. I'm, I'm here for it. I think we should be shaming people when they leave the office at four 30. I think we should be shaming people when they gain too much weight. I should have been shamed when I was fat. People should have absolutely tortured me. I should have been bullied and I should have lost the weight sooner. You had, you had me in the first half, Jason, and then you lost me in the back half. but just for the sake of transparency i went ahead and signed up for uh the screen time network here is my here's seven hours a day seven hours a day it's i think it starts tracking from when you join so clearly my thing is here but lauren what i really like about this compared to the ios updates is it gives you a bit more information about like when and how you've done it kind of gamifies it a little bit gives you some encouragement so instead of just being public shame i think this also is kind of like your Strava results you can share with your friends about how your runs are going.

7:29No one really cares if you're running 15 minute miles or 10 minute miles. But if you're going 15, 14, 13, that to me is kind of the thing you want to encourage. So I can see this working. I kind of like it. And Jason, here we are talking about ClearSpace. We haven't done that before. So, you know, shout out to them for doing that. That's the big lesson here is you can create a website that's adjacent to what you're doing in a clever way. Simply design it, vibe code it and they know the dynamics of shame uh they know public competition time to beat you know uh your best time yearly average best weekly average you know putting yourself into a pedometer group which i think fitbit and some other people did early on these things actually work um and then people want to share it so uh and when you sign up you're going to give them your email so this is a great idea you should be thinking about this for every startup you do uh com.com was the master of this alex created a website that said do nothing for 60 seconds reset the 60 second timer uh it was pretty famous he also did the million dollar home page where he sold he made a thousand pixels by a thousand pixels i guess would be a million um and uh he sold each pixel for a dollar and it turned out to be an interesting business so you can link them so these little devices are um just really great at driving folks to understand the problem in your space so always think about like a simpler hookier version of your product there's the million dollar home place i'm just showing this for folks who were too young when this came out but like this was a big deal this was like a viral hit people tried to make copycats of this they didn't really work out but alex chewy uh who later went on to build calm is kind of a hit maker jason he's kind of got that might as touch to him yeah it's a viral thing uh and this is a viral thing it's probably when you do these things it's probably not going to work but if it does work hey you may get people talking about it a whole bunch so good job for them it's a thing we talk about a lot in founder you we have uh or and launch as well there's a company that they sell a billboard space and they created they go on reddit because they've got this billboard that they actually own so they can put whatever they want on it so they go on reddit and put different kind of messages on it to go viral on reddit and use that to like grow interest around the company right so like gimmicky fun things that are going to go viral on the internet can be a great way to like promote your company, even if it's not directly related.

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10:53The AI is grabbing new leads. Think about that while you're asleep. See why over 60 ,000 businesses trust OpenPhone. I am one of those 60 ,000. OpenPhone is offering Twist listeners 20 % off your first six months at openphone.com slash twist. That's O-P-E-N-P-H-O-N-E dot com slash twist. Open phone. No missed calls. No missed customers. Yeah. No, I think that's brilliant. I mean, billboards are a big deal in kind of Silicon Valley culture, Jason. I think we all recall the Twilio Ask Your Developer billboards they ran back in the day that really kind of put them as a developer first company. That worked quite well.

11:28So lots of fun to be at. yeah it's uh the way to do it with the billboard would be to come up with some funny use of it to put up there well that's what they were doing on reddit is they actually asked this reddit community like what do you guys think we should put on the billboard and they would take pictures of the billboard with whatever the messages the community to base it uh the better thing would be to hashtag your tweet or your instagram uh billboard and then put something on there like Like if it hits 100 retweets, then it goes on the billboard. And then say that. If I get 100 retweets, this goes on the billboard.

12:06So now you've created a viral loop, right? So, you know, what should we put on the billboard? Doesn't create any virality. But coming up with a contest to do it, or if I get 100 likes or 100 retweets, then it goes on the billboard. That would create more of a loop, a reason to come back, right? So that's the virality piece of it. I saw some folks talking about this Google Stitch thing and it looked incredibly compelling to me. Maybe you could share that with folks here. Yeah. So Google had its IO developer event just a couple of days ago, and they released, Jason, roughly 55 ,000 things. So I think we're all still digesting each element of what Google put out, new models, new image creation models, new video creation models.

12:52One thing they dropped was a product called Stitch. and this is not something that's entirely brand new it is tell an ai what kind of website you would like and then it'll generate something that's along those lines what's cool about stitch is that it has a button that says edit and figma so if you're a figma person they're really setting this up to be a quick loop between ideation uh ai generation and then human editing which i think is kind of a cool thing now uh niyati soul had a pretty bullish tweet about this that we saw, I'll just show that to give her credit for this, she says that it's absolutely mind-blowing and that now the potential is endless.

13:29There's no excuse left to not build stuff. So, I, this morning, went and gave it a try and let me tell you, it wasn't great. I'm not going to lie. It was kind of a letdown. I think your prompt was pretty bad. A newsy web blog newsletter designed for cautionoptimism.news that is punchy, serious, and calm. Eh, you got to do something a little bit more thoughtful than that. Like, just redoing a blog is like a very base thing when she did it she was looking at her prompt or like the result of hers hers came out really gorgeous um but you know the bigger point here is there's another job ux that i think um everybody's going to be able to do now that doesn't mean everybody's gonna be able to do it perfectly but let's put let's pull up her design because it's it's a little more than just redoing um a newsletter page she did something that was more like let's build an app and i think that's where it really shines and as we saw last week when we did the uh yeah here's hers uh for those of you watching on youtube um and can you see her prompt if you click on it if you click on the image yeah i got it uh mobile friendly home for a marketplace of handmade ceramics and pottery with a minimalist oak theme and then she refined it the home screen for the ceramic and pottery marketplace app features a minimalist taupe theme with a search bar, a featured artist banner, curated collections, and a bottom navigation bar for easy access to different sections.

14:57Yeah. So with a little more robust prompt and then a follow-up, you can see like if a designer getting paid 50 bucks an hour on Fiverr or, you know, one of these marketplaces submitted this, I would say that would be what I would expect. And why is that important? Well, I think probably most startups, that's exactly what they do. They design with a$25 to$50 an hour offshore designer that they find on Fiverr or what are some of those other sites where you can get like freelancers, Dribbble, Behance. Upwork. Upwork would be the big one. Yes. Sorry, that was the one I was thinking of. So you go on Upwork and, you know, you find these designers who I would say are good at copying other common designs and being inspired by other designs.

15:48We talked on All In, I think last week, somebody stopped me who worked at Apple on the airplane and was like, you trashed us last week. I was like, where did you, when did I, I was like, get in line. Who did I trash last week? And he's like, Apple. I'm like, I don't trash Apple. I love Apple. What are you talking about? He's like, our design, Johnny Ive, you said he stole everything. I said, well, no, I said he was inspired by Dieter Braun. So it was Sachs who was arguing that he's a talentless hack who didn't really do anything. You were more in the middle. I think I was in the middle. The other two guys were laughing.

16:22Sachs and I are back with our pick and roll. What happens is when Sachs and I get going on something like that, he's like, isn't it? Was he a media creation? I'm like, interesting. Yeah. Let me get it on this. Yeah. Sax's contention was, Johnny, I've never done anything good. A pure media creation. Jason was more like the moderate position. Like, maybe he never did anything good and just ripped off all his ideas, but maybe not. Maybe there's something to it. Okay. Well, I was like, maybe that's what great artists do, is steal. So I gave it a backhanded comment. But the point is, even the mighty Johnny I copied everything Dieter Braun.

16:59Is that his name, Dieter Braun? No, Dieter Rahm. He worked for - Braun is the brand. I'm sorry. that's why i got it's diter ram yeah i believe diter rom is how you pronounce it and he worked for brawn you know like the shaver but they did many other electronic devices when you see them and yeah yeah transistor so once again we just eliminated a line item from the costs of running your startup that's we're here on this week in startup so i'd like to go back to that angle gentlemen you now have two tips in the first 10 minutes here number one if you create something viral you put these two things together like a make me a gorgeous website that tracks your iphone usage that's in a retro style um and that has short urls and boom you you do that you could have vibe coded this over the weekend in like a day or two or in a day this is a probably five thousand to ten thousand dollars worth of spend of your 125k incubator check.

18:02Just like signing your safe note or convertible note and having an attorney review it, that was$5 ,000 or$10 ,000, making a marketing plan, writing some code on the margin. So we're seeing each line item get abstracted. So if you want to come up with a good startup idea, what are the things that people used to spend money on for their startup? Recruiting somebody, acquiring some customers, creating a community, creating your designs, doing PR, sales development,

18:38raising money itself, that whole money raising process. So look at each of those in terms of the number of hours they take or who you might pay as a consultant. And then I bet you'll be able to start up around every single one of them. Yeah. One last point about this. When I was playing with the Jason refining my initially week prompt, I did discover that it won't make desktop websites. So I was stuck in this mobile world. And I said, I said, Hey, can we actually just swap desktop? And it said, no, you have to start a new thread for that. So I did. And then it said, you can't do that. Start a new thread for that.

19:08So right now a little bit limited, but again, I also think Jason, it shows that Google really wants to do everything in AI. Like they're trying to flood the zone here and apparently to some success. So points to Sundar and his team. I got to say, they were behind in AI and now we keep talking about him. So that's all. And as you can see here, we've shamed Lon, Alex, because of his prompt and it worked. It worked, yeah. He's going to do better. His prompt will be better next time. I think prompt shame is the next big thing. I mean, if you get people to use AI, we should be looking at people's prompt and saying, really, that's the best prompt you can do?

19:43This is what doing extra. Talk about the navigation. This is what doing extra gets you on Twitch. You see a thing and you think, you know what? I need to test this out myself. I'm not just going to take. It's okay, Alex. You did a completely serviceable job. That, by the way, in Jason's speak is thin ice. Congratulations on doing the bare minimum.

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21:29Oh no. If I recall correctly. So I wanted to bring to you the polymarket odds for them making it all the way to become the NBA champion. I'm sorry to say, Jason, it's actually 3%. And last week we brought up a market that was a little bit light. Jason, this one has$1.7 billion in volume. So I think it's nice and deep. Do you think the Thunder are 78 % favorite? That's my question. They're up 3-1 as well, or 3-2? I think they're up. i'll uh yeah it might be three one three one so they're both three one and so oh this is nba champion so by the way this is going all the way so this is not only winning this round this is winning the championship correct wow so the knicks have to win seven more games to win the championship uh yeah this is the right odds i think um indiana pacers need to win five and oklahoma city need to win five right the one game to close out the series in the four to win the next i think um the knicks have squandered their best chance at getting a champ a champion winning a championship since the hakim elijah won series uh when we lost uh because john starks couldn't hit the side of a backboard um but you know there were many reasons uh we could have won that series but yeah we could have been in the finals so it's incredibly frustrating but you know uh this is life uh and i'm excited we got to the conference finals but that's my question win the next game i just want to win the next game that's all nearly every sports team does not win their season right so do you feel like happy as a knicks fan if they make a good deep run in the postseason or is that just more like a like a like a teaser that makes it worse when they lose right now it feels pretty bad um and uh because the coach of our team this is a kind of interesting for startups as well he um something worked like he has a short rotation kind of concept so in basketball you have a 15 member team you can only play five those are called the starters uh at the top of the game and then you can rotate players and typically i would say the average team plays eight, nine, or ten players a game.

23:53He has always played a short rotation, six, seven players, right? He never gets the eighth or ninth unless it's garbage time. Meaningless game, he might put some people in. This has led to his players famously getting injuries because he overworks them. And also this year has resulted in them having incredible stamina. But what it does do is you don't get to see all the possible lineups and you don't give some emerging talent the ability to develop. So when we got down two games in a seven-game series, he hadn't tried out a lot of people on the bench. He hadn't tried out different rotations. And so then he starts experimenting with rotations in game three, and we win.

24:30And we had some really nice moments where we had, to not belabor the point, spread out a little bit of the minutes and try giving different people the opportunity. I do this inside of our venture firm. Everybody wants the starters, the high performers constantly get the same opportunity because they have done really well, being the point guard, the center, the wing, et cetera. What I do is every six months or 12 months, I will change who's in charge of founder university, the accelerator, the syndicate, or working here at launch or working directly with me as a shadow. What that does is it lets emerging talent get the chance to prove themselves.

25:10It gives them their 20 minutes in the game, 15 minutes in the game. And yeah, what's the downside? They fall on their face. They cause chaos. They're not very good. You know what? I kind of want to know that quickly so that I can stop investing in that person or I can invest in that person and get them better because the mistakes they're making are fixable, right? It's one or the other. Here's how you do that. You tell everybody at the start, you're going to work on a project we found at university. Jackie worked on that, for example. a guy named Charlie then took it over from Jackie. He added his own spin on it.

25:44It went to another level. That's no dig to Jackie. And then Kelly worked on it, added some things to it that made it even better than it had been under Charlie and Jackie. And now Lucas and Lon and some other folks at the headquarters are running it. It's doing even better. And what happens when you move people around as well, you should have redundancy. You're not reliant on one person. So if one person's not bringing it, you have this other person who's bringing it. This happened to the Warriors. They had older players who were in the twilight of their career. You had younger players, Klay Thompson and Draymond Green.

26:25As they came off the bench and got minutes, you were able to give them room to perform. What that also did was, if some older person wanted a huge contract, you were like, you know what? Are you worth that amount of money? Or is this younger up-and-comer worth giving the opportunity to? And this sounds incredibly cutthroat, and it is, and as business is. So if you are looking for yet another startup lesson, look at the bench and give the bench an opportunity. Hard to agree with that. Also, it makes more fun games to watch because you get to know more players and you get to see kind of more, I don't know, playing methods.

27:04I've been watching a lot of WNBA lately, so I've gotten to see some of this, Jason. All right, Jason, you wanted to talk about the biggest deal of the week, which is Salesforce is buying a company called Informatica, which is the most enterprise-y sounding name of all time. Before you jump in here, I'll just let everyone know it's an$8 billion transaction. And Salesforce, as we all recall, is a company that pledged back in 2023 that it had disbanded, its M &A committee, and was going to pull back from mega deals. And then about 20 minutes later, Mark Benioff was like, well, that's boring. I'm going to go back to doing deals.

27:37Tried to buy the company last year. Didn't work out. And now it is scooping it up, Jason, for about$3 billion less. But no matter what, we'd love to see some M &A, even if it is a couple of public companies. Okay. So one simple sentence. I always like to know what the company does. So what does this company do and what's the thesis? Do we have a handle on that? We do. Okay. I wrote this down so I knew you were going to ask it. Always start with that. I think it's just important for the audience to understand, especially the founders who are watching, why is somebody buying a company? It is interesting, I think in terms of context, that Salesforce during the wrath of Lena Kahn gave up.

28:23Did that really happen? Did Benioff say, we're disbanding our M &A? That was back in 2023 because he was under pressure by outside investors to stop doing so many big deals. They wanted him to focus more on cost cutting. And then he went back to doing deals. So that was because he was feeling pressure from activist investors, not necessarily Lena Khan. But I bet you the outside investors were like, listen, it's not going to get through anyway. So what's the point of all of this to try to even buy things, spend years doing it, then having like Adobe having the Figma deal canceled. So I bet you that was why the activist investors who wanted him to lay people off and get the earnings to spike, and thus get the stock price to spike.

29:07So tell us, what is Informatica? All right, Informatica. Informatica does corporate data organization. It helps companies find out where their data is. It helps them figure out the governance for it. And also to make sure that they're doing good data observability, Jason, which is making sure that your data sources are accurate and not spitting out complete garbage. Now that's pretty boring, I think, in a pre-AI world. It's a lot of buzzwords. Corporate data organization, observation, and governance. I'm trying to even parse what that means, but okay. You got a lot of data in your organization.

29:43We're going to somehow organize it? Yep. Their goal is to go figure out what you have, help you organize it, figure out who's allowed to look at it and interact with it, governance, and then also make sure that your inbound sources are not polluted and full of crap.

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30:37And now, you know, listen, if you need that CFO level guidance, they're going to give you that. So you can stay focused on what matters, building your team, building your product, and delighting your customers. You should not be stressing over spreadsheets with your P &L and in all this nonsense. You want accurate financials, delivered on time every time and you want to be compliant with your taxes. You don't want any last minute surprises. And when it's time to raise your next round and you're scaling up, Pilot's CFO services team is going to help you plan and grow with confidence. Startups that use Pilot tend to raise a bigger Series B and a bigger Series C round than the average startup.

31:12Why? Because when you're buttoned up from the start, everything gets easy. Focus on your product. Let Pilot handle your bookkeeping. This week in startups, listeners get$1 ,200 off their first year, just go to pilot.com slash twist. That's P-I-L-O-T dot com slash T-W-I-S-T. Interesting. As opposed to using the SaaS specific SaaS products, this would do it across many SaaS products. So they would take your Salesforce data, your HubSpot data, whatever, your Slack data, your Google drive, your email, and be able to look across all of it. Okay. I think I get it. Got it. Now, that was an important bit of work in the pre-AI world, but now I think it's much more important because everyone wants to use their internal data in an AI context to automate tasks, learn more about their business, and so forth.