Is there an AI coding bubble? Plus Meta’s new SlopTok product, Neon’s divisive app shuts down, and more | E2184

25:19Now they're building trenches and overpasses and no stoplights and putting in another six lanes. And so that means more people will move out to Dripping Springs or Wimberley because you'll be able to get there quicker, which then fills it up. So yeah, I think radiologists aren't going to magically go away. what will probably happen is people will go for x-rays more often. And the idea of like sending somebody for an x-ray, I'm sure because of the cost, insurance companies might turn it down or might say it's not necessary. You know, when you get a common cold, they don't send you for an x-ray, but if you get like severe upper respiratory, they do send you for one, right?

25:59But I think that costs 200 bucks. So are you going to send everybody who's got a cough to get an x-ray? Also, x-rays, I think there could be some side effects. You don't want to go for them too often. Yeah, that's why you have to wear the lead vest at the dentist when they're doing the scans of your face. I also want to make the bullish case here. I didn't just bring this up because I wanted to say boo-hoo AI. So I read the article and I read some other studies just to kind of get my arms around it. Quite often, these seem to rest on historical data from 2018, from 2016. So when you read these analyses, I think it's good to keep in mind that we're always looking backwards a little bit in time.

26:33and AI has gotten smarter and better and more capable. So I think that that's important. Also, there are several startups that are working in this space that are doing quite well. So one's called Rad AI. They built what they call powerful radiology AI. They raised$151 million total, Jason, and they ranked number 107 on the Inc. 5000 this year with 3 ,229 % three-year growth. So companies that are startups are doing well. Another one, AI Doc, building a holistic AI system for medical imaging and raised over$400 million. So even though some studies are saying this, the startups are on the case and I am optimistic that they are going to get it right.

27:09And then we can all have free and faster and smarter medical imaging and we don't have to pay radiologists an average of$500 ,000 per year. Yeah, and it'll be cheaper. That's the thing I'm looking forward to. Like just make everything so much cheaper and getting your blood work done. You know, you can use superpower, function. I think Whoop is adding the ability to just go with self-directed healthcare and get your blood work done. People are like NutriSense, we're investors in. You can get one of those glucose monitors directly and start checking that out. So all of this is going to result in consumers buying healthcare like they buy travel services.

27:50You used to have to go through a travel agent to figure out, is there, how do I get to Italy? How do I get to Rome? What are the flight options? And they would type on their computer and then explain it to you and give you some advice. And now it's like, you know, just open up an app and go to Google flights or go to Expedia or whatever it happens to be. And, you know, you disintermediated that entire layer of flight or travel consultants, right? Travel agents was, there were storefronts of travel agents when I was growing up. I don't know when they went away, but sometime in the 90s, travel agencies went away.

28:27But if you were going to plan a vacation, you would walk down the street, walk into a storefront for people who are listening, and you'd sit there and do an hour or two consultation with somebody of, here are different, and they give you brochures. Here's different places you can go on vacation. Here's how you get there. Here's the hotels. Now all that information is online. Moving on. XAI has priced its government AI product at, Jason, I'm very proud to report, not 69 cents. They didn't do that. Instead, they went with 42 cents. And so we all need to give Google points because Google priced its AI product for government at 47 cents.

29:02So XAI had to go lower than that. What's the only meme number under 47? I guess it's 42 if you're a Douglas Adams fan. So we now have four different offerings available to government agencies from now through 2027. OpenAI for$1, Anthropic for$1, Google for$0.47, or XAI for$0.42. So I guess we're going to bring a lot of great AI to the government. My question is, how the hell can these companies afford that? Because they're all losing so much money, and now they're going to support the government for effectively zero. As an investor, Jason, doesn't that make you a little, eh, scared?

29:41If you don't have the right data, your company can't make the right decisions. It's really that simple, folks. But your information, it's spread out all over the place. You got shared drives. You got legacy systems. Maybe you're taking meeting notes, using AI to do that. You need one source of truth where you can find the most reliable, accurate, and real-time information possible. The answer is AlphaSense. They're the AI search and marketing intelligence platform trained on over 500 million business documents. Their gen search platform gives you a blazingly fast start on your research projects, pulling together an analyst level deep dive on any topic, industry, or a company in just minutes.

30:20Plus, you can use GenGrid to keep tabs on multiple different companies or topics right now or over time. They've even got an autonomous AI interviewer, keeping you plugged in to the latest thoughts from industry experts without the need to spend an entire afternoon jumping on Zoom calls. It's time to remove uncertainty from your process and start making better, smarter decisions. We're going to start you off with a free trial. Go to alpha-sense.com slash twist. That's alpha-sense.com slash twist for a free trial. I think they're trying to jumpstart the government's interest in these technologies.

30:55And if they do get value from it long term, they'll want to buy the newer, fresher models that come out in the future. and they'll eventually want to pay for it. They'll eventually want it to have on-prem versions of it. So it's, this is the same. Number one, it's awesome that the technology is doing this as a group. All the technologists, all the technology companies and supporting the government to lower costs. And I think they will wind up benefiting from it if the government becomes dependent on this technology and implements it. Just like, you know, you can start out with Notion. I think Notion has a free plan.

31:35Slack has a free plan. A lot of these products start with free plans. Ah, this is premium for government. Okay. I think this is, I would say this is, I'm not saying that to be cynical. No, no, no, no, no, no. That makes sense to me. I think that's what this is because there'll be other ways to monetize this. Like I said, you know, if you're the CIA, if you're, you know, the Department of Defense, if you, I mean, if you're the IRS and you want to start implementing this technology, at some point you might say, you know what? can I get some on-prem? And one of these companies, XAI, might say, sure, we're going to set up a bunch of H100s at your location, or we're going to cordon off in our data center a bunch of these inference machines.

32:13It'll be your own world. Nobody can get into it. We can't get into it. There's all kinds of ways for this to get monetized later. But the government, healthcare, and education are usually the three last cities to fall when a new technology goes on a, you know, on a global empire building quest. Those are the last three cities. They're the most resistant. So how do you make them not resistant? 42 cents per agency. Or 47 cents or the shocking cost of 100 cents from OpenAI and Anthropic. Can't believe those money grubbers. I know. They're charging a whole dollar. What are they doing? They're charging a dollar.

32:52How dare they? Well, so a couple of things that I think about this. One, I think Google's in a really good place here because they can afford to subsidize any amount of inference for the government. The other companies have to raise either equity or debt capital to pay for this. So we'll see how that works out for their economics. But I do see the freemium option. I had a more cynical take that I wanted to bring up. Do you think that we're seeing private sector companies offer the government low cost, high quality services essentially to curry favor with the White House? Is that something that we should now keep in mind in these moments?

33:20Or am I being too tinfoil hat? Yeah, I mean, you're a lefty. I'm a moderate. Other people are far on the right or MAGA. And you are correct that people will interpret behaviors based upon the lens they're coming from. In fact, that's how people will determine how they feel the economy is going. There's this economic paradox where during the Biden presidency, Republicans felt the economy was doing terrible. During the Trump presidency is 45th and now this one, Democrats over index think it's worse. I think it's like 20 points of difference in terms of approval ratings for these things. And so that phenomenon also will happen when interpreting any business relationship between private companies and the government.

34:14And when you have the president of the United States bring every giant leader to the White House for a dinner, that can cause challenges where you just assume causation, correlation. At least these things are happening in public. That's the one thing I'll say. And we do have a pretty good system for conflicts here. So to the extent people are, you know, doing anything nefarious, that is going to get investigated as we've seen. both of these parties, and I'm not a member of either of them, and I'm just praying there's going to be a third party option. And that's what I'm putting my energy into is the third party option, because I think both of these groups are going to just keep investigating each other.

35:02One of them gets out of the White House or the Congress flips, you know, they're going to just start investigating each other over and over and over again. It's never going to end. It'll be lawfare and investigations forever. And I think people will generally keep their books clean. Okay, good. That's my guess. Because think about the cost of getting dragged into, oh my God, you did something nefarious. You did some quid pro quo. It's just after what happened with like Hunter Biden or the meme coin stuff with the Trump meme coin, all of these things take an enormous amount of energy to then go clean up or defend.

35:44Juice may not be worth the squeeze. It might just be much easier to donate to a campaign, donate to a PAC, like Jeff Yoss donates a lot of money to PACs, I understand, or I read online. Tons of millions in the last election, yeah. Yeah, and he has a seat at the table when it comes to TikTok, right, which is his big breakout investment. He can at least get his message to the White House. Does that mean they're going to do everything he asks? Obviously not. But I think that that's the nature of our country is you can give a large amount of money to PACs. Maybe that's the thing that has to go away.

36:18Two things have to be fixed. One, we have to get some way to prevent people from being able to drop 100 million on an election. Love to your friend Elon, but I do think it allows for - Oh, there's multiple people who've done that, right? Soros, Elon. I know. I just want to point out that I'm not trying to make some sort of subtle dig. and then also gerrymandering has to go because then you end up with people that are only on the extremer sides of their parties. There's no one in the middle like yourself and then we end up with no one making any progress. But Jason, just to back up what you said, I pulled the chart.

36:44This is the one that I was thinking of. This shows how public opinion about the US economy changes by administration. So no Republicans thought the economy was good. Trump got elected, 100 % dead. Biden, and then it flips. It's both parties that are doing this except for COVID. Look at the spread between public opinion on the U.S. economy. Democrats think like 60 percent of them. Wait, this is very good. Yes. So during the Biden presidency, look at the gap. It's so polarized. 60 percent of Democrats at the peak thought the Biden economy was great and Republicans like 10 percent thought it was great.

37:24It's a 50 point swing. Yeah. Insane. And it's so dramatic, too, because you can literally just right here, this is where Biden got elected, right? Or inaugurated. And then immediately, all the revolts - It just flips. It just flips. So that shows a lot about our country. And I think we need to get as far away from that as we can, which is why I really think we need to pass something on gerrymandering. Yeah, that feels like another leak in our system. Our system has leaks. You know, sometimes you got to plug the leaks. You got to iterate on them. Things change over a couple of hundred years or 250 years, you know, since the founding of this experiment.

37:58Like, things have changed. You got to tweak them. Hey, can somebody ask producer Claude what that phenomenon of your opinion tracking your party affiliation according to the economy is? I know there's a specific psychological term for this. So I'll just ask producer Claude to do some deep research on that for us. And we'll break back in when we have it. All right. What else do we have in the news? So Jason, next up, we're talking about a company called Factory. Sequoia backed $300 million valuation,$50 million raise. NEA, JP Morgan, and NVIDIA also in the deal. It's another company that wants to help you write code.

38:33Their product is called Droids, what they call their AI agents. And their idea is that you can have a lot of them working at once, no matter where you code, be it in the web, in your IDE, at the command line, whatever you want. They follow you around. Cool. Fair enough. The company says it's going to reach like maybe like a 20 million run rate into this year, whatever. The thing that I'm really amazed by is how much money is flowing into the space. The FT reports via pitch book data that$5 billion has been invested into AI software development startups in the third quarter. Or$7.5 billion if you want to count in the windsurf exit to Google.

39:08So what do you do if you're a founder? Because on one hand, it is clear that people think the TAM here is enormous. Sean McGuire from Sequoia said that the market for coding assisting startups is going to be$10 trillion. But at the same time, the competition is so rapid because the TAM is so large. So how should founders kind of balance going after markets where the TAM is very attractive and also balancing out how many more competitors are going to have by going after those larger TAM environments? I was just curious what you thought about that. Yeah. So this is going to be a huge base. I've heard there's 30 million developers.

39:41I've heard there's 50 million developers globally. And I think the reason this is such a huge TAM is because of that fact, right? 50 million developers. Um, so if the average value of a developer is$200 ,000, you know, 50 million times 200 ,000, that's a big number. I'll have you pull that up in a second. Um, but then you can then say, well, if you may, if you can make, if you can double the number of developers with the software, so people who are bad developers who aren't in that 50 million group, if you can just, but double it to a hundred million, you've now doubled the TAM. You've doubled the number of developers.

40:23I think that's what's happening here. We talked about induced traffic earlier. You make more roads, you make more lanes, you get more cars because people will decide to live further and further from their job or the city center. That's what's going to happen here. These things are going to take the number of developers. And I would say very easily in a decade, if we had to make a bet here, a polymarket of how many developers there were from now until 10 years from now, which is people who, as their primary job function, primary job function, not like some of the time, but primary job function, push code and develop software, just develop software.

41:01Because that's obviously going to change what that means to develop software. I would say we'll go from 50 to 250 in a decade, 5X in a decade. That's an absurdly fast growth rate. Absurdly fast. It also begins to become an actual large chunk of the human population. If you extrapolate out how many people are going to have at that point in time, 250 million, no matter how you cut it up, is going to be a single digit percentage of the total amount of humans. Jason, you wanted 50 million, sorry, 50 million developers times$200 ,000 a year. That turns out it's 10 trillion. I wonder if that's where Sean McGuire got the number he was talking about.

41:40Kind of a very simple bit of calculation. um but that's okay it's a big tam we all agree big tam but when founders see a big tam and competition this rabid should that push them away from building that space or should it draw them towards building to that space you should be drawn to going into that space if a lot of people find a great beach to surf um you probably want to surf that beach right because it could get better and better and people could be underestimating the TAM. So if I told you when Sidecar and Lyft were battling it out for ride sharing, should Uber join the race? Yeah, they should.

42:18If I told you before XI had released an LLM and ChatGPT and Claude and Gemini had run away with it, should XAI jump into the race? You might say, no, it's too late. It's never too late. Somebody could start an LLM right now. I know that sounds crazy, but if all of a sudden Apple decided this is strategic for us. Let's put a hundred billion dollars into it and let's double the offers everybody else have. And let's find a way to put this on every iPhone and we'll design the entire iPhone around the idea of it being an H100. Like, and the idea of building an H100 competitor and competing with NVIDIA.

42:52Okay. It sounds crazy, but if there's a big market, there's always going to be room for innovation. And even if you lose in a big market, the, the bronze or the honorable mention could be huge. It could be huge. I mean, Lyft investors were super bummed that they got their asses handed to them, you know, by Uber. And they got the silver, well, the bronze, depending on the market. Silver or bronze, still pretty good. It's like a$15 billion company. If you invested under$5 billion, you at least tripled your money or something, to matter of So still a good win. I think this is a space where there's also going to be things that emerge that you didn't expect.

43:35So for Uber or for Airbnb, I don't think in their initial business plans, premium dedicated locations for staying somewhere like entire apartments or houses or complexes being built to be dedicated Airbnb inventory, I don't think was ever in the business plan. And I can tell you, like, as amazing as Travis was of pointing out where this would go, I don't think ride sharing was in the original business plan. It was always going to be Lincoln Town Cars. Ride sharing came after that, like, as a concept. And so here we are, folks. Yeah. Partisan bias, by the way. If we asked, we asked producer Claude, partisan perceptual bias or partisan motivated reasoning is the cognitive biases.

44:25You know, you have these cognitive biases that everybody likes to talk about when you're an investor. You like to study cognitive systems, how people think. So people like to think about thinking. That phenomenon is partisan perceptual bias. So you're partisan and your perception is biased. Makes total sense. I have stock market bias. My view of the economy is where the stock market is, because then I either have more money or less. So right now, economy is great. And if you are not in the market, like 50 % of the country is not, then their view of the market is their hourly wage, which is why we have a bifurcated, you know, when you look at the moderates, that's where you can kind of start to get a really good idea of what the country actually thinks when you could take out the partisan bias of the moderates with moderates and wages not moving is how people perceive the state of the economy so you're like well the stock market's at an all-time high bitcoin's at an all-time high housing all-time high how could people feel bad about this economy it's like they're still making you know 12 an hour 14 an hour and it's just not a living wage and they're the primary breadwinner in their family or they're, you know, a duo of primary, you have two primary breadwinners both making under$20 an hour.

45:47It's kind of tough to live a sub$20 an hour. You have to make$30,$40 an hour in this country to sustain yourself. So really, if, major cities aside, New York, not everybody is entitled to live in Manhattan, Beverly Hills, and San Francisco. You take those three cities out and you start looking at every other city in the country. Yeah, you can live off 50K, 60K. If you have two people making that, you can live off of that. Going to public school and, you know, it's not easy. I'm not saying that. But man, under 20 bucks an hour, you really need to figure out how to get above 20. And, you know, do it fast because you're not raising a family on 20 bucks an hour, 40 bucks a year.

46:29So Meta's AI team, the much vaunted TBH, Alexander Wang from Scale AI, the smartest folks in the world, Jason. Nine figure salaries. they've announced a new product and it is called vibes and i'm gonna play it for everybody sounds promising what is it here it is coming to you live i know what it is i i know here we go folks all right this is the promo video and this is part of meta ai so there's a meta ai app by the way folks that lets you use your meta glasses and so here we're seeing a bunch of ai videos that you can create with tools and you can make your own AI slop. And then it's a feed of really increasingly better looking AI slop.

47:17So this is TikTok slop. This is tick slop. Slop talk. It's slop talk. Tick slop. I think you won. I think slop talk. It's slop talk. Yeah. But it's not even good. So we're watching a guy kayak and there's whales flying overhead or an astronaut on a bike or a bear fighting another animal or it's just to me this is just the absolute nadir of imagination it's like what if x was y and i i don't know why they built this they got a lot of criticism for just i'm gonna go ahead and cut off the um whatever the hell that is uh everyone dunked on them immediately uh nikita beer who now runs a A good chunk of X made fun of it.

47:58Alexia Bonazos, formerly AIC of TechCrunch, mocked it. Even Sean, the CTO of Palantir, said, read the wall of quote teats that categorically reject this AI slop. We are so back. So everyone just despises it, right? Thinks it's terrible. I'm going to steel man this for everybody. Okay. Because I think Alexander Wang is getting unfair hate. This is not for us. Everyone who's on X does not want this, does not need this. but the core Facebook audience, right, which is probably where they want to eventually bring this is full of older users who famously and historically love AI slop. You heard about the shrimp Jesus phenomena over on the big blue app?

48:39Go ahead and explain that. For some reason, for a period of time, there was a ton of people of the boomer generation sharing images and memes of essentially Jesus that looked partially like a shrimp. It was all AI and I never really understood it, but it was a huge phenomena. So I think because older folks love AI slop, what Meta has created is a slop trough that costs them little to put together and might dramatically increase their advertising inventory with a critical and lucrative demographic of users. So it's all - So they got rid of paying content providers for content like Disney has to.

49:14And they got consumers to make content. And some platforms like YouTube share that revenue. uh x.com sharing revenue and now they've decided consumers creating the content we're just going to have ai created and not have to pay anyone no this is users actually making the slop um i'm with you i think this is going to become uh i think if people use it creatively they're going to come up with interesting ideas like they could make little mini stories or memes so i saw somebody raised $3 million startup for meme lord.com. Did you see that? They kept at mentioning me. I did not see the someone meme lord.com.

49:56I, if you, if you go on to, um, X, um, they made a video of me. Um, and so the keyboard is the new battlefield meme lord.com. I'll pull this up for everybody. It's got like a 80, it's got like a nineties windows interface and you can sign up and then, yeah, you go make memes. You make memes. This new phenomena, by the way, of having the website look like a fake computer. Do you see the new PostHog website? They did the same thing. I have not. Oh, there it is. Yeah. Yeah. Yeah, making the desktop. Yeah. Yeah, this is a new trend. Jason, this is just a meme maker? Yeah. Yeah, it's because there's like other meme makers on the web, but I guess the idea here is this is to make movies.

50:49And yeah. Oh, man. I don't I don't know if I love this new hype train. Actually, this is a good topic for founders. I've seen a lot of people talking about launch videos, building viral hype and really trying to leverage and hack social media in a way to draw outsized attention to your startup. And of course, attention is good, Jason. But yes, attention is everything. Well, I mean, famously, according to the Google paper. But do you think that becoming a meme advanced user, I'm not going to say master, is actually a skill that most founders should have? Or is this a younger slice of the founder demographic that should get really good at this stuff?

51:27Hmm. Um, the memes are a way to make people feel an emotion, uh, in a way that a logo used to do it. So I look at them as something between a joke and a logo, um, or a quip, um, or a clever title from a magazine. They kind of fill that space. It used to be like magazine titles. We sit in a room and we tried to come up with a really good one. And when they were at their best, you know, and people always did the same one. I am pitching a story about Microsoft and their new product. And it's called the empire strikes back because isn't that clever? And I'm like, this is literally every third pitch session, the empire strikes back as a, you know, concept for a meme comes up.

52:17Uh, and then we're going to like make a montage or what do they call it? Yeah, like a montage of like, you know, Bill Gates as Darth Vader or something. And Luke Skywalker is, you know, Steve Jobs or something. It's just all ridiculous. So that's where I think this sits is where memes sit. And I do think there are opportunities here to build a decent sized business. And I think there'll be a new art form that comes out of things like Meme Lord or this vibes. I think there'll be a new art form that might not be as sloppy as it appears today. Okay. The slop might turn into art. People said rap was like slop.

53:00They said electronic music was slop when it first came out. And then people were like, rock and roll. It's just noise, right? And so over time, people have learned to appreciate or people have elevated things that started as slop. I'll just leave it at that. So we should all essentially invest in Shrimp Jesus and put down our fine art and invest in boomer memes. Okay. There you go. You're here first, folks. One more, Jason? We have time for one more? Yeah, what do you got? All right. Let's talk about ads coming to OpenAI. Now, we have a clip here from an older twist episode that I'm going to play because we have talked about ads coming to OpenAI before.

53:37Let's take a listen to these fine folks named Jason Calacanis and Alex Wilhelm. Oh, those guys are smart. Yeah, here they go. It could be cost per click. It could be cost per acquisition. it could be cost per lead cost per click or it could be cost per transaction all of those are on the table let's do a long bet advertising and chat gpt within 18 months they launch an advertising test in 18 months you take the over the under oh the under by by by okay 12 months over under under okay 12 months it is i say i take the over okay you take the under hundred dollar bet one year from now. So I was taking notes on my physical notepad.

54:15What date was that? How far are we out from the bet here? That's the other piece of information we need to know because I'm going to have to ship you a hundy. Oh, Jason, that was a month ago. Okay. So you got 11 months for ads to show up. Now it's looking good. Your bet's looking like you're in the money because of these factors, these clues, these breadcrumbs. So a couple of things. First of all, if you go back in time to April of this year, OpenAI did some reporting on revised OpenAI revenue growth. And if you take a look at this chart right here, Jason, which I pulled from their reporting, check out theinformation.com.

54:51Love those guys. They expanded their revenue projections here on the right, and they added this little bit called new products, including free user monetization. Essentially, they were telling their - They can't just say ads. Free user monetization, Jason, does not necessarily mean ads. It could be - Selling their data. Selling their data, stealing their blood, you know, who knows. Yeah, any of those. But they're expecting quite a lot of revenue to come out of this. So that was clue number one. Then most recently - They expect$25 billion, it looks like. Is that right? In 2029, they expect to have$25 billion in ad revenue.

55:24Yes. Actually, while I talk about OpenAI, producer Claude, can you get me the latest on Amazon's advertising business from let's say Q2 of this year? I just want that number for reference in a couple seconds. The other thing to know is that according to basically everyone online, the moment that OpenAI announced a new product called Pulse, which is currently only available to people on their pro tier, the$200 a month tier, it's essentially like a morning app for you. It takes in all the stuff you've talked about, tries to find stuff for you to give you a like a morning shot of information i guess something like that and people are like wait he wants to know about you and show you things ad platform and then finally alex heath on his sources newsletter uh published like alex he's i respect alex because you know all these writers are just not good at writing he's a good writer i like to read his stuff and now he's gone solo dolo he's so independent he's let's go ahead and i'm gonna drop a screenshot here of his article just to give him some love sources.news i pay for this i pay for sources.news i'm i'm going to start uh actually i had missed that he got off on his own i knew he had a uh it was only a week ago so or two weeks ago you didn't miss it by much i didn't i feel i feel better than anyways the headline here from sources is open ai is looking for an ads chief fiji simo of course previously the ceo of instacart through the ipo is now ceo of applications over at OpenAI.

56:49She's going to hire someone underneath her to sell advertisements and also work on monetization. So if you take the plans to grow revenue from ads, the new product that's good for ads and the fact that they're hiring an ads person, Jason, it may be that ads are coming to ChatGPT. Ads are coming to ChatGPT. And, you know, the reason I took the over on 12 months is not that I didn't think they were going to do it. Just how quickly would they do it if it's growing really fast, you know, Sam Altman is, uh, lived through web 2.0, participated in it, and he watched, uh, people just grow user bases and get them addicted to products before turning on monetization.

57:29And so, and you know, the Zuckerberg's, you know, uh, Zuckerberg and Google would be two really good examples of that. Gmail has marketing in it today. I understand. I don't really use Gmail anymore. I use super human, but I understand that when you go to your promotions tab, they insert promotions from people you didn't subscribe to. Have you seen that? I wound up on my Gmail account and in the promotions tab, I saw, you know, like if it was putting J. Crew or Tom Ford in there, it would go put Amber Crombie and Fitch in between them as a promotional email being served to me that I didn't sign up for in my promotions tab.

58:10And, you know, they didn't do that until whatever, year 10 or something, maybe. be. But that to me is literally how big companies fail because they had to find someplace to stick a new ad and they didn't think you'd care. And you know what? The first seven times they sweep the knee, I don't fall down. But eventually I'm like, you know what? F off. You and I are weirdos at the tip of the spear. That's not how anybody else thinks. Nobody cares about advertising. It's only like 10 % of us care. That's depressing. But we do have the information from our dear friends on the production team, Amazon's advertising services revenue was, wow, okay, I was off by a couple billion, about 15.7 billion in the second quarter of this year, up about 23%.

58:55So thinking about OpenAI's user base, Jason, 700 million weekly actives on ChatGPT, I think is the last number we saw. How much money do you think they could pull out of that per quarter? If we presume that let's say 90 % of them are free, so call it 630 million. Let's just say they're all they all have ads just for, so 700 a week. And so I think you would just look at how much you could make from them yearly, which you could then look at how much does Facebook or Google make from them. It's a big difference when you have boots on the ground in India, Japan, Australia, and you have ad teams, they are getting ads online.

59:34So the international ad network is going to take a long time to build. You know, Google took decades to build it. Facebook took decades to build it. But if we just said US users, I could see them easily monetizing with light advertising at$20 in American. $20, if there's 100 million Americans using it a year, you know, that would be 2 billion right there. And that would be very low monetization. You're talking about making a dollar a month,$1.50 a month per user, which means they clicked on but two ads a month, that's 75 cents a click or, you know, 1.5 ads if it's a dollar a click. Let's say you get people to click five times a month.

1:00:15Now you're going to make at$1.50 a click,$7.50. Let's say these are really high quality clicks. So we're just making a dollar, make it easy. So let's just say the average user, some users might click on 20 ads, some might click on zero, but let's say the average user clicks on four ads per month,$4 a month, 12 months a year,$50,$48 a year in ads per user. Now you compare that to the people paying 15 or 20 bucks a month. Free users are making$50 a year. And then the paid users are making two, getting a 250 a year. However, over time, they could make very aggressive ads. I think the way they should do this is an interstitial on the free product.

1:00:57You type in what you want to do while it's thinking, it's showing you the ads. Oh, so it doesn't slow your work down, but it monetizes your wait time. That would encourage slower AI models and slower inference, which actually would save them on compute because they'd have more time. That's a perverse inverse incentive. Yeah. Let me ask my team to make me a version of that. Show me a version of that. Somebody design Lucas or Marcus, like make a little mock-up of that. Lucas is going to make in mock-ups of it's doing deep research. And while it's doing deep research, I say, Hey, what's the best.

1:01:30Um, I ask it a question like, what's the best vacation I could go on with a family of five and I want it to be warm and it's in December. And while it's doing that, I just see the ads for that. Right. While it's doing its research. Um, and it, it shows me three different options for cruises, whatever, man, that could be so powerful. And what if it was an ad? What if it was a video ad in the interstitial page? So it's deep thinking about your answer and it just plays you the ad while it's waiting and it counts down in 10 seconds. You'll see your answer. I think anybody's, nobody's going to complain about 10 seconds or five second interstitial.

1:02:06I know that I'm a freak, but I'm still mad that they put ads in my paid prime videos. Anyways, I'm trying to get to say that the question about monetization for open AI in the realm of advertising is actually going to be very variable based on where their users are. So Jason, if you look at this, this is from Snap's latest earnings report, and it shows their global average revenue per user, basically flat year over year, about$2.87. However, in North America, $8.33, and then in the rest of the world,$0.96. Now, why do we care about this? Because I think I saw recently that OpenAI launched a$5 a month service in India, probably a large market for AI, given a lot of people that are online, a little harder to monetize than the US market because of different income levels.

1:02:53So they're probably going to maybe lean more towards pushing certain markets to pay subscriptions. Maybe other markets are a bit more monetizable on the ad side. I'm just really curious where the 700 million weekly actives of TagGPT are, because that will determine quite a lot about how the calculations work out for the ad business. Yeah. You'll make much less per user in certain markets, but it is what it is. You know, just getting to billions of users is, you know, means you're going to print money eventually. And that eventually is coming soon. And you won't have to print money if you go and buy Claude Pro at my URL, which is claude.ai slash twist.

1:03:36To get started over there, you get the first three months free. Twist listeners get 50 % off their first three months of Clawed Pro. Clawed Pro is what I use. Alex uses the whole team, clawed.ai slash twist to get started.

1:03:53All right, next up on the program, we have a special treat for you. This is our Twist Pitch Deck Competition. It's brought to you by our friends at Gamma. And in this little competition we're doing, we're going to try to teach people how to make great decks, how to pitch really well. So we got the founders from 10 great startups, all of which have made their beautiful, elegant, effective pitch decks using Gamma.app. And after we hear all the pitches, one of these companies is going to receive 25 large. That's right. $25 ,000 from launch. And what is Gamma? This is your AI design partner helping you generate presentations, websites, social media posts, all that great stuff.

1:04:33They do it in a lightning fast way, all without any coding. So check it out for yourself at gamma.app. All right, first up on our competition is Brittany from Where to Wheel. This is a marketplace for off-roaders and landowners. They went through our founder university in our accelerator class. Brittany, are you ready to go? Are you ready to do your pitch? I am ready. Hi, I'm Brittany, founder of Where to Wheel, a marketplace that connects off-roaders with private landowners. Meet Caitlin. She's an off-road enthusiast, and she wants to take her Jeep off-roading. But like most off-roaders, she has nowhere nearby to do so, as current locations are extremely secluded and unwelcoming.

1:05:14And Caitlin is part of the global community of over 160 million off-roaders, with over 70 million of them here in the U.S. While searching for places to go off-roading, Caitlin comes across Wear-to-Wheel. On the Wear-to-Wheel map, she is surprised to find new off-road spots in her area called W2W Parks, which is our marketplace inventory. On here, she can view descriptions, buy tickets, sign waivers, and go wheeling. So the off-roaders buy tickets to our marketplace inventory, and we take 50 % of those bookings. And the market is much larger than most would imagine, with off-roading being the second largest sector in outdoor recreation, right behind camping with a TAM of almost$18 billion.

1:05:53And in 2023, 50 million Americans went off-roading. But our product is so convenient that we're already more than doubling this behavior. We found early traction and crossed 100K GMB this year, as well as strong product market fit backed by these metrics. It's also worth mentioning that we have no competing disruptors. For go-to-market, we have a really, really large brand and megaphone in this space. So the minute we post about a new location to go off-roading, it spreads like wildfire. And on the landowner side, we've lined up strategic partnerships to give us access to over 30 ,000 landowners in the U.S., as well as a real estate collaboration that guarantees us penetration into our beachhead markets.

1:06:30And we're going to use those beachhead markets on a tipping point growth strategy to reach mass market adoption. And we're targeting the Northeast Corridor here because this is the most populated area of off-roaders with the most severe lack of off-road access. The team at Wear2Will, we're all former founders, and we have over 35 years of off-road experience. And the ultimate vision for Wear to Wheel actually has three silos, a media marketing silo, a marketplace of locations, as well as insurance, as no auto carrier in the U.S. offers on-road and off-road insurance. And the time is now for this market, there's booming demand.

1:07:04It's more than doubled in under eight years, supplies stagnant and outdated, and we can also leverage agritourism for quick expansion. Thanks for listening. Again, I'm Brittany, founder of Wear to Wheel, a marketplace that connects off-roaders with private landowners. Wow. As close to a perfect pitch as you could do. Incredibly well done, Brittany. You know, what makes a great pitch like this is being super efficient and understanding what's important. And your audience, the audience of people who are off-roaders, they know all these problems, right? You wouldn't have to explain to them that it's hard to find a place.

1:07:36But if you were raising money from venture capitalists or you're pitching people to come work at your company, you know, they may not understand how big this market is. So what you did really well is you integrated education into the deck and into your presentation. I also love on the bottom, you have those nice hash marks for each slide. So I knew where I was going and this is where pacing matters. And up front, you did a great job of showing a real person with a real problem in the world and a real solution. Also, you explained the business model very well towards the end. We said, you know, hey, there's a marketplace and then there's the events and then there's insurance.

1:08:19What that did was it built credibility that as an entrepreneur, you're very forward looking. You have a big vision here and you come away from this kind of intrigued. It's almost like you're bringing me into a world I've never experienced. I see people off-roading on social media once in a while, but I don't know how it works exactly. And I didn't know how big the community is. I don't know who these people are, but you did a great job of explaining that. Then what was amazing was you talked about your go-to market strategy. And that also built massive credibility with me. So for people who are wondering, I mean, you know, anybody can come up with an idea.

1:09:06This idea, I'm sure 10 ,000 people have had it. Why isn't there a marketplace? Why isn't there an Airbnb for this? There's got to be a better way. But a small number of people actually go build it. And so there might have been a dozen people who attempted to build this and just nobody succeeded or they didn't have a good go-to market strategy. You really studied the space and you said, hey, the Northeast Corridor has the most density. It's got the largest amount of people and it's the lowest serviced. So I would have guessed, hmm, maybe they'll go with Texas or, you know, I know in California, there are beaches people go to.

1:09:45I know in Florida, people go to beaches. But, you know, I was just thinking Appalachia. I don't know. Where's the best place to do this? Where there already are locations, there aren't locations. And I think Airbnb went through something similar. They were in California trying to get this sleep on your couch, rent a place. But in California, there's plenty of places to say. It's a huge, giant state with many options. Then you look at New York, and New York was expensive. There weren't a lot of options, and they typically were overbooked. Whereas in California, you can always get a hotel room. It's just a matter of if it's the one you like and how far it is from whatever event you're going to.

1:10:22It's almost never the case. Maybe during Coachella and the hour drive around it, that things become so booked up that you can't find a place. So at some point, Paul Graham did the really smart thing and told him, hey, why aren't you guys in New York doing this in New York? So I love that as well. Just across the board. Check, check, check, check, check. And it feels super credible. Now, what could you add to it? But that's a question I have for you. When you've pitched it, this deck specifically, what are the questions you typically get? Because you don't want to in a short three-minute presentation or less like this, you don't want to answer everything.

1:11:02But what are the first questions you've gotten from investors after a quick presentation like this? That's a great question. So usually the top two questions we get are, how are you defining the market size? So we go into that really quickly with 160 million internationals, 70 in the U.S. So then I go into when they ask that question, we have statistics and data points, different research that I can share with them on how they're actually qualifying that. But we used to just say, you know, 160 million off roaders. So then we kind of broke it into the different buckets so they could actually see, you know, more of a U.S.

1:11:38market versus an international market. And then obviously go to market is always one like how do you reach them? Where are you hitting first? So we actually added the beachhead market slide in there instead of me having to answer that all the time. The questions we built that out and added that in. So I was it's nice to see that that helped. Well, you know, every time you pitch somebody, it's an opportunity to learn something about that investor, where they're coming from. And, you know, 95 percent of investors are not interested in any particular startup. And the high art of pitching is finding the five who are into it.

1:12:13I know this because I introduced Uber to 21 people and three of us invested. So in that case, you know, it was literally 95 % were not interested, which is crazy when you think about it. And I love the fact that you got granular on the market size in the Northeast, even down to the state level. If I were going to say, you know, something to consider adding when you do the longer one, I'm very curious about who these people are. And that falls under a persona. Now you did a persona, a woman at the start. She has a Jeep Wrangler, I noticed. But I didn't know too much more about her. This is where I wonder if you were to bucket, say, if I said, give me the three top personas of people, tell me about those three top personas.

1:13:06so in our market it's it's a range you got men and women right and so if you're going to go three top personas you have women off-roaders where our customers are more um geared towards women that are newer to the sport right they're looking for a safe space to go they don't know a lot of information they don't want to get lost out in the middle of the woods on their own so we have that bucket uh you know they're usually around the range mid-20s you know into like their 50s sixties, the off-road sport goes all the way up. I have people coming out and they're 76 years old. I mean, it was awesome.

1:13:40I mean, he just did amazing, but I was like, good for you. Um, so usually it's about 25 to like 60 is usually the range. Um, so females into outdoor sports, looking for a community, something outside of technology, you know, to get into. So that's one bucket. Okay. So you'd call those touch nature. Um, and they're a wide age group and that's women specifically as one group. And you've identified that women are adopting the sport in some major way. Is that correct? Yeah. We thought it would be mainly men. What's driving that? Is it a specific group of women? Is it single women? Is it women with kids who want to bring their kids out to nature?

1:14:22Are they looking to meet people or are they bringing for their girlfriends. Unpack it a little bit if you can. Yeah. So this one actually really surprised us, right? Because we were under the assumption this is a more male-dominated field or sport, which it still is. But the off-roading industry is just absolutely exploding, right? You see every vehicle manufacturer is bringing back or adding an off-road market. They're targeting women now as a sport. You know, you can learn how to do this. It doesn't take a lot. You know, you have a Bronco. They want to drive with their, you know, the top down, the hair blowing in the wind.

1:14:57There's a Jeep hair don't care. That's like one of the things they say. That's wonderful that you've identified that persona. Let's go to the male persona, the classic persona that makes up the majority. So that's like an emerging group, I think. Who's the majority? Who's the majority? Is it, you know, I was thinking like it's a redneck, you know, somebody from down south. But then I was also thinking, you know, my friends who do this, who I know are rich venture capitalists and CEOs who are spending like they buy some cheap for 30, 40, 50 K used or slightly used. And then they spend another 30, 40, 50 K on it.

1:15:35So I wonder if you could unpack, let's just say the elite part of the audience and then we'll get to the big major middle. But who's that like, you know, dream customer with a lot of money? Or is there one? Yeah, I'm curious. On our side, you know, it's one of those where if you're willing to pay to do your sport, you know, there's kind of a certain connotation that goes there, right? Like you're not the redneck rodeo out in the middle of nowhere, you know, with a rust bucket. You know, you're going to go on your friend's farm for free. Like you're not our customer and we're not really interested in that.

1:16:11That makes sense. So we kind of price it based on the certain region and what that clientele looks like. So like our Northern Virginia markets, DC, Loudoun County, the richest region in the United States has a different price and kind of offerings to cater to those people. So on the more elite side, I mean, it can range from any kind of occupation, lawyers, dentists, doctors, vets, up to venture capitalists. We have a lot of CEOs and executives that come out and they're usually driving, like you're saying, you know, those hundred K vehicles, you know, that three 92, or we had a, um, a brand new Bronco Raptor.

1:16:48It was like 120 K from the dealership with no plates came out. And it's like, oh my gosh. Um, so they're just, you know, they're looking for a way they can bring their kids with them. A lot of, um, dads bring their kids, you know, the moms like get out of the house and this is what they go do. They can come do it for a couple of quick hours and then get back, you know, get out to nature. I'd love to do that with my kids. So let's talk about that group. I'm wondering if there is a premium service that you're charging typically 50 bucks, a hundred bucks to go run around on somebody's land. Is that the average ticket price?

1:17:25Yeah, the average is 55. It can range up to 150. Our more expensive markets, you're low and you're going to have to get 65 or more per vehicle to get in the door. So me as like an elite customer of this service or somebody with the$100 ,000,$200 ,000 car, et cetera. They're a dentist. They're going to look at that and say, that's too cheap. I want to have a place with great bathrooms. I want to meet other people with this similar type of car. I want an instructor there. I want waiter service or a beverage counter or a latte. Is there an equivalent of the Uber Black, if you will, or the One Fine Stay?

1:18:02If you know that company, One Fine Stay does like elite Airbnbs, I believe, and then Airbnb has Select. But is there a one fine stay Uber Black version of this? Currently, no. So what we're doing to try to combat that is we actually partnered with Constellus, which is, it used to be Blackwater. It's a massive facility out here. So they have 5 ,000 acres. They have cafeterias, hotels, bathrooms, medical on site, all these things that create more of a premium experience. And that ticket is a more premium ticket. 500, 1 ,000? Right now, the one down here, it's if you buy early bird, it's 150 up to a certain amount of people.

1:18:42And then it kicks up to 200. And that's about three to four hours of off-roading. So you get a little quick snippet. And that's worked really well. And so we've looked at partnering because there's other facilities like this across the US and at making those more of like, if you want a black level, experience that's kind of where you go. I would like to see you push the envelope on this. And so I think taking a shot at a$1 ,000 experience that included some merch that you get, included waiter service, premium bathrooms, and an instructor. And it was targeted towards people with certain vehicle types and maybe some instruction.

1:19:27I think there's just so much opportunity here to capture some of the high end and learn about that. People greatly underestimate what people are willing to spend on experiences. I know this because over time, as I was able to move my station life up, I would go to Disneyland on a Tuesday because I didn't want to hit the lines. Then I was able to afford a fast pass. Then I was able to afford like the VIP tour, which by the way, I think is like, I don't know,$600 an hour. And we do it for 10 hours or eight hours. And then I have a friend who took his thing up to another level with Club 33, their private club membership.

1:20:10And that's like a quarter million dollars or a half million dollars to do it. And then maybe 30 ,000 a year or something, you know, not insignificant. And there always is another level, another level. So I think sometimes exploring those. Now, the one thing we didn't talk about, we'll end on this, is the manufacturers and all the gear people. You don't have a sponsorship partnership anywhere in the deck. But I think understanding in the persona of the top two personas that you're targeting, I think understanding their salaries on average and who they are, what car they drive, the amount of money in it.

1:20:53I think understanding that would propel this into more of a golf or a skiing type persona. And if you ever notice the car companies market to golfers and skiers, right. Especially in your category, actually. So they're always, I'm, I get more Defender and, um, I have, um, like the suburban fancy one. I don't know. It's Grand Wagoneer or something. It's got some fancy name, uh, you know, with the bigger engine and, you know, whatever, better leather. So I think that group to me could be absolutely magical and change this from feeling like it's, you know, poor to middle-class folks to, hey, maybe people need to understand from the presentation, this is high-end folks.

1:21:39So anyway, I just think so much to noodle on there. I think education, you can really hit a home run where you just sell people, you know, a$2 ,000 weekend where they learn and there must be people out there who have those businesses already. I think either including them or acquiring one or making one could be a total unlock because now you, you know, all those people who don't do this yet, but who have the car, my Lord, like what percentage of people who own a Land Rover Defender or a Suburban have taken it on one of these courses, would you say? We actually just had Defender last weekend. So we just launched classes to help with this.

1:22:19So because we get a lot of beginners. Back to my question. Of the, if there's 100 ,000 Land Rover Defender, like the new fancy one that have been sold, let's say. Yeah, the pretty one. Yeah, too pretty. That's why I didn't buy it. Of those, there's like a Grenada or something. That's like the old school one. I don't know if you've seen that. It's a Grenada, I think. That's the one I want to buy. So of that group of 100 ,000, let's say Land Rover Defenders, fancy new one, how many of those have been off-road, do you think, and done a course? With us or just across the board? Just ever. Have ever - Probably 20%.

1:22:56You think 20 ,000 would have one in five? I thought it would be like one in 20, but okay. So that means those other 80 % might like this experience. So back to Tam, if you can show, I think one of the things people will want to see is you're growing 10 to 20 % a month, month over month, that makes us a fundable startup. So that's one. At a certain point, people are going to say, okay, you're going to reach the market saturation. What does that look like, et cetera? And so if you can answer that question with, and this is growing and we are helping onboard people as part of this revolution, I think you will cut the series B investors off at the pass, so to speak.

1:23:35So great job. What's the growth like month over month? What have you been hitting? 10, 20 percent, 5 percent? Yeah, somewhere anywhere between about 15 and 40 depends on like what we've onboarded that month. Yeah. So this is what I would say. The most important thing is you show you can grow your marketplace in terms of, you know, the actual GMV 10 to 20 % a month consistently. Once you've done that for 10 months, for 20 months, all of a sudden the funding discussions, all the questions go away. So there's two ways for founders sometimes to figure this out. One is they figure it out by, you know, not getting funding because they're not growing.

1:24:25And then the other way they figure it out is they have, they put a couple of months of growth together and then people are like, they throw money at them. So what the chart, sometimes a chart will get an investor to take a meeting. Sometimes a chart will get an investor to write a check. Okay. So just keep that in mind. If you have the chart, how many months have you had double digit in a row? Um, about five. Perfect. So you're You're right on the cusp of greatness. When you show, and you don't have to go for 50 a month, 100 a month, just to show you understand how to maintain the quality experience and do it at 20 % a month, 15 % a month, something in that average, man, the investors will start taking meetings at two to three times the rate.

1:25:14So just keep that in mind. And that's something that's very important with you as the leader of the company to just absolutely create as a North Star for your company. Marketplaces, if they prove they can't grow, they got a problem. Because now the investor community is like, oh, thank you for going down that rabbit hole and eliminating this as a category for a great next marketplace. So amazing job. Great job. And I guess if anybody wants to go off-roading, where the number two wheel.com, where to wheel.com. And you're Brittany at where to wheel.com, B-R-I-T-T-N-Y. If you're an investor and you want to meet her or a partner, great job.

1:25:56Thank you. Really excited for your company. Everybody, if you're feeling inspired and you want to come on the program and pitch me, go to gamma.app and start working on your own presentation. Brittany's got a pretty great one here. You can just take hers and deconstruct it. thanks again to our partners at Gamma. Cannot wait to give somebody a cranberry. 25 dime skis coming at you. All right, everybody. See you next time.

1:26:24All right, everybody. Another amazing, another amazing episode of This Week in Startups. Have a great weekend. We'll see you on Monday. Make sure you go to youtube.com and go to youtube.com and search for This Week in Startups. hit subscribe, hit the bell, and you'll get an alert when we go live. And we'll take questions from the live audience like we always do. All right, Alex, have a great weekend. We'll see you Monday. Bye. Bye-bye.

1:27:10Thank you.