Jason’s Tesla Optimus prediction, Anthropic’s latest mega-raise and more | E2172

27:03All right, Jason, next on the docket, Clement from Hugging Face, a company that you and I both know as an online repository of open source AI models, argues that Apple is not, in fact, a complete dud in AI, as we have said on this show, I think about 1 ,400, 1 ,500 times, but instead is actually doing quite well. Now, the argument here is that because Apple's put out a couple of targeted models, usually made for on-device AI inference that they're not falling super far behind. A couple of recent examples are Fast VLM and Mobile Clip 2, the second generation of that. I have notes about these models for us, but I'm just really curious, is it enough for a major technology company to build models for a niche use case and to seed the market for general purpose AI, or is Apple making a strategic error here?

27:53And I'm a little bit torn, so I kind of wanted to get your perspective on what's the best way for Apple to approach this? You know, number one, Hugging Face is a great company. I love that. Such a great company. Yeah, it's so great that they're like, you know, organizing all this. And Colmant has found his voice on the x.com platform, so I highly recommend following him. I'd love to have him on the pod. I've invited him. He's just told me he's very busy. So we need to get that, not producer Claude for this, but producer Oliver, let's get that worked out. Open source is a huge advantage if you're behind.

28:30I believe the stuff Apple's working on is open source. I could be wrong, but I believe these are all open source models that they're doing. And if they are in fact open source, that makes a lot of sense to me because if you think about what's in Apple's wheelhouse, it's creatives. that's their biggest strength so photographers video editors graphic designers that's their wheelhouse right it was originally the creative computer if you were a business person you had microsoft office windows here apple you know creative do that now it's the two platforms do business equally well maybe not video games equally well but they do um you know almost everything equally well but you give the advantage to apple for creatives it is the standard right i just want to back up what you're saying here jason i knew that the open elm model for them a small language model was open source, but I've just confirmed that both mobile VIT and fast VLM are also open source.

29:26So yes, Apple has been using a lot of small targeted open source models, but open source. So Apple makes money through elegant, beautiful hardware devices. If those devices are so sought after and they get more features and more functionality, then people don't switch off of them and they get locked into that ecosystem. There's a duopoly in the United States and the world of Android and iOS. And iOS, I believe iOS is up to, are they up to 60 % market share in the US now? It was like a big moment maybe five years ago when they tipped over to become top market share. And what this showed was price was not the determining factor for a smartphone purchase.

30:15People did not care about price. They cared about features. They cared about design. They cared about the velocity of it, ease of use, the family features, all that kind of stuff. And they've just built a better operating system. So what's their market share up to now? I'm curious. In the eyes now.

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31:50That's right. aws.amazon.com slash startups slash credits. According to StatCounter, July 2025 data, iOS has 59 % market share in the US. So just under 60. And it gyrates month to month, Jason, but call it just under 60%. Well, thanks to Producer Claude for finding us that source. Producer Claude is very, very fast. And thanks to our friends at Anthropic for that. We covered them in the news as well, but they also make great stuff just for us on the show. Fantastic. And we'll give you a discount code later. You can get 50 % off all their stuff. They gave us a nice discount code to share. So this is brilliant on their part.

32:29If the community of open source and startups and other folks start working on mobile VIT and open ELM and those things get an edge like the Chinese ones have, you know, this could put developer momentum and ideas into that project. And then they don't need to make money off of this. They don't need it to be proprietary. they need to know how to integrate it perfectly into their iOS and Mac OS. Ah, okay. I disagree. I think on both counts, Jason. And here's why. One, I think Apple's growth era from hardware is behind it. We've all seen us reach peak smartphone. I don't think people are going to start buying more laptops.

33:20My iMac that I've had for a couple of years is fantastic. Don't need to replace it. So I do think they're hunting for software-based growth. This is why they've been focusing on services. So in the future, I wouldn't be shocked if Apple's subscription consumer offerings had some AI components to them that's useful. And then the other thing is, I really do think you're right. If we're going to keep smartphones the way they are today, then building small models that you can run at the edge to do on-device inference processing are useful. I just think that the row of apps era of smartphones is fading and that companies that have a stronger general AI model they can use to build a more compelling OS from the ground up, kind of like instead of adding, you know, AI to Salesforce, what if you built Salesforce with AI from the ground up?

34:02I think that second class of future smartphones is going to be better. And I think Apple runs the risk of making essentially a better Google search and getting crushed by a perplexity, if that makes sense. Okay. So a bet is emerging here. A bet is emerging. So based on what you're saying, you believe the app interface is going away. Don't disagree that people will spend more time in the chat interface or the voice interface. I think we all agree with that. Apple and Alexa and Siri and all these things were kind of like the false start or the tip of the spear there. That's now being wedged open.

34:35Sure. I think I would have to set odds with you. Okay. So what are the odds that a new entrant takes 10 % of the smartphone market away from Android and iOS? in seven years based upon an AI-first phone. So it's a very specific kind of bet here. So - Repeating this back to you, new entrant, so not Android, takes 10 % of the smartphone market away from the combined iOS and Android share. Right. And this would be predicated on AI-first phone. And this is a seven-year wager. Oh, I'm going to go 100%. Okay, you got 100%. Okay. 100%. Okay. I'm going to take the other side of it. I think it's just really hard to crack this habit in seven years.

35:25So we'll put that in the docket and put it in the calendar. I'll put it under a hundred bucks. And here we go. There's another Hyundai I'm going to win from Alex, man. At this rate, I'm going to go broke. No, my wager here is optimistic because I want this. So I'm kind of betting for the thing that I want. I'm trying to manifest. Thank you, Jason. I needed that Zoomer, that Zoomer phrase. Okay. All right. I, the one thing I'll say is I, I, I agree with you that it's possible that, is it Apple one that I pay a hundred bucks a month for now? $1 ,200 a year for my family. So between the five of us, I guess I'm paying 20 bucks for, you know, music and everything.

36:06I mean, I pay for everything. Yeah. If they added like AI photo editing to that and that was part of it. Sure. I do think that the reason they're investing in this stuff is to get people addicted to making images and videos that you cannot make on the current generation of phones and laptops. So I'll take the opposite. Ah, OK. what they're trying to do is break and to antiquate to antiquate to make to purposely make all of our devices obsolete because they cannot run these ai models efficiently enough to get the value and then the next 20-year cycle of laptops or a 10-year cycle of laptops laptops and phones will be based on having enough power to run these models.

36:56And that to me sounds like a good bet, but there's two ways for them to win. Well, that's why Apple's worth several trillion dollars. They're not playing single lines here, Jason. They're running multiple bets. But I just think that Apple has been too conservative. I mean, even if they made Siri fantastic, even if Siri was every bit as good today as OpenAI's ChatGPT voice mode, I would still be worried about them because I don't think they're going to be able to actually rethink their smartphone designs. We've been talking about folding phones for years from Samsung and Apple is rumored to be working on one for the future.

37:31Well, blow me over, ladies and gentlemen. Excellent. Finally, my iPhone can have a crease in it. That's what I've always wanted from iPhone Cupertino. Well done. They're kind of fun. I have my Pixel 9 fold and I find it fun. It's 10 to 20 % of my mobile phone usage. I'm lucky enough to have the budget to play with, you know, to have two phones. Because I feel like I need to, as an investor, understand the latest and greatest. I always keep an Android phone. I always keep an iOS phone. Hey, speaking of innovation and new models, Grok's coding model I saw was breaking out. So how do we keep up with this, folks?

38:07I mean. Well, you listen to This Week in Startups, ladies and gentlemen, where we keep you informed. All right. So on Friday on the show, we were talking about Grok Code Fast 1. And Jason, I said, look, the data's early, but it does appear to be a hit. People seem to be using it. The gist here, folks, is that it's very, very fast, high tokens per second, and incredibly low cost,$1.50 per million output tokens. Over the weekend, we saw the model absolutely become enormous. For a while, Jason, it became the number one model on open router. And keep in mind, they were talking about over a trillion tokens processed over an open router per week.

38:41So quite a lot of usage volume here. The thing is, I wanted to frame this in a way for folks that it made more sense. Because if I tell you, Jason, 200 billion tokens yesterday, it's a little fuzzy. What does that mean? So I ran the math on how much revenue that is to put into brass tacks for folks. Now, there's a couple of assumptions in here. I tried to figure out for a coding model, what is the average ratio of input to output tokens? Because that matters for the overall profit mix. And basically, we're going to run a 75-25 output to input ratio. So it's three to one. All right. So per every 100 billion processed tokens on Grok Code Fast 1 using that split, it works out to$117 ,500 in revenue.

39:25So if they did 100 billion tokens per day, that would be about$120 ,000 in revenue, which is a lot less than I expected, I think, doing the math. and then I ran the math again, the same usage breakdown, same 100 billion tokens for Claude Sonnet 4 works out to$1.12 million because that model costs about 10 times as much. Now, when I ran the math last night, Claude, sorry, Grok Code Fast 1 had done just under 400 billion tokens. And so that was about a half million dollars in revenue for XAI. A breakout model, massive usage, but it's so cheaply priced, they're kind of undercutting themselves was my takeaway.

40:02way. Yeah, I think when these new technologies come out, one way to get people's attention, and I think I said this on Friday, is to be disruptive in pricing. And, you know, that was Airbnb and Uber's model, disrupt the pricing. And yeah, that's clearly what they're doing. I guess we have a guest today. Do we have a guest? We probably have them waiting here and listening to the show. Maybe we should have our guest on. Yeah. All right. So next up, we're going to talk to Scale Social. Now, this is a company, Jason, that you are actually a little bit familiar with because they went through Founder University back in Cohort 10.

40:37And what they do is they put out QR codes at local businesses that people can scan, and then they upload a video of them saying they enjoyed the place that they're at. Then Scale Social takes that, makes it into an automatic, socially ready clip, and then it runs it as a geo-targeted social advertisement, creating a flywheel to bring in more people, to get more testimonials, to create more advertisements. I love it. Please welcome to the show. It's Runbin Dong. Hello from Iceland. Thank you so much, Jason. From Iceland, where there's nothing to do but work on your startup. You're in Siberia. We're on a 10-day trip.

41:11Yeah. Oh, no, you're on vacation. It's beautiful, beautiful here. Yeah. You know, when I heard the idea for what you're building, and I'm not sure when I heard it, I was like, this is brilliant because doing an advertisement for your product or service, you know, that can work. But in my own lived experience, you see me using that woke language, Alex, my lived experience, okay? I do love it when you go full of woke, because I know it's driving your friends nuts. In my lived experience, I get a lot of information about places I want to visit in Japan or New York or LA in short videos now to the extent to such an extent that I have on my Instagram and TikTok accounts and I've started to make these public things to do with kids in Austin Austin bakeries Austin steaks and barbecue.

42:14But what you're building is trying to find people who authentically went to the business, had a great experience, and start a flywheel going, and then use that as advertising. This is so complicated and nuanced and takes a lot of work that I don't think the sushi restaurant or the barbecue joint or the laser tag, they're not going to have the time to do this. So maybe you could tell us a little bit about how it's worked thus far and then what's in it for the person who writes the reviewer makes the short do they get compensated how do they get compensated walk us through this maybe show us yeah absolutely um this idea actually came out of my experience delivering dumplings door-to-door so you were a dumpling delivery guy yes shanghai dumplings the crab and pork ones those are ones i like um made by my mom so okay very good yeah i spent my career in corporate but um had a chance to build a handmade dumpling business with my mom um she was a retired uh restaurateur and we wanted to keep her busy and we eventually sold the business but one thing that just kept coming back is why is it so ridiculously difficult to market your brand authentically.

43:35Food influencers were a thing, but to your point, they could be paid. And the magical moment was when our customers were actually text and or, you know, send us videos of their own dumpling making experience. And so we're like, why can't we build a solution that does exactly that at scale? And I think it's very nuanced from that perspective. So having the operator mindset helps a lot. And do you wind up paying the reviewer and how do you engage the reviewer? That's, I think, the little nuance. I'm curious about how you tested that or started that process because I might find it a little weird, you know, to get an email from the restaurant or from you, hey, you wrote a review on Yelp or Google, would you make a video or you find their video?

44:25How does all that contact with the individual work? Yeah, so that was actually one of the biggest challenges early on. I think a few things happened, COVID and Toast, and how Toast tabs and ordering through QR codes became a thing in the restaurant industry. And so when we thought of our solution, we said, okay, well, can it be QR code-based? Because people are already very familiar with it. And two, can we make it so lean whereby there's no app download. So it's essentially a web app. And we've designed the entire experience to be just three screens. We've had internal battles about making more features.

45:05And ultimately, we just come back to this, okay, it works. Okay, so remember then, when I'm in a restaurant, I see the little code, it's on the table, I'm eating my dumpling, my pizza, whatever it is. And I go, this is fantastic. And then I scan it. And then do I record a video inside the restaurant? I'm just trying to think through the actual consumer process here. That's exactly it. So you scan the QR code and we'll prompt you to share your experience. You will literally take photos and we'll show the phone videos inside the restaurant and immediately we evaluate your content live using AI and we'll be able to prompt you on whether it's a great quality content.

45:41Maybe you can try again, but ultimately they will get a perk right away from the restaurant. It's instant gratification. You studied BF Skinner, genius. So what is the reward? A cocktail, an extra dessert? What is it? So it could be anything that the restaurant owner wants to give out for that location. It will be a free side, a free drink. Turns out giving away alcohol is illegal in certain states. Okay. Two for one might work, but okay, got it. So that's their compensation. And you tell them, hey, can we use your video in our promotions for our restaurant. And Scale Social owns that copyright.

46:19They effectively give us the data. And one thing that we are super interested in is analyzing all of that contextual data and giving additional insights back to the operator. There's just so much data. How much do you charge and how do you charge the restaurant? What's the sales pitch there? I'm always interested in, we got the consumer side, but now you got the business side. You're creating basically like a marketplace for testimonials. So brilliant, so much work. How do you charge the restaurant? We know how you paid off the user. They got a free dessert, whatever. Fantastic. Worth it for them to do a little testimonial.

46:58They probably enjoy being on video. What is the restaurant? Do they just pay a SAS fee or something or they pay per video? How do they pay? It's a SAS fee. So for quick service restaurants, it's$1 ,000 per location per month. And for full service restaurants, So a proper dining experience is$2 ,000 per month per location. You know what I love about this, Alex, is that this is a founder who knows their worth. Okay. Two out of three people are going to say that's too expensive. But the one out of three are going to say, okay, sounds great. Let's go. $12 ,000 a year,$24 ,000 a year. Yeah, we make$3 million here.

47:33If you can get us 10 % more, you're an idiot for giving us this tool. Okay. So let's beg the question then. If you're going to charge premium, you got to show them the goods. How do you handle analytics and showing ROI to these small business owners? Because I know if you run a small business, you pinch a penny very, very tight. Absolutely. So our ideal customers are franchisor brands in quick service and full service. So there are proper marketing teams in place. And one of the historical challenges for this segment is imagine you're a subway owner. As a franchisee, you're contributing about 3 % of your top line revenue to the franchisor brand that goes into a marketing fund every single year.

48:17And you constantly are wondering, what are you doing for my location? You could run TV ads for all you want, but how does that translate to my specific business in Pittsburgh, Pennsylvania? We helped them bridge that gap because we could take that video and literally land it in that three, five mile radius of that location. Love it. So you use TikTok or you use Instagram stories? What's the most effective for restaurants? So we're all channels across Facebook, Instagram, Google search display. And we also have a fairly proprietary relationship with one of the largest ad exchange networks in the world.

48:56So they serve up billions of ads. That gets us into the long tail of advertising thousands of super local websites. Can you show us some stuff? Give us a little tour of, or maybe show us a couple of videos that performed well. Absolutely. So we have tons of super personalized videos on our website. This is due for a huge upgrade as well. But what you'll notice is this is very TikTok-like. There's not a lot of filters being applied to it. and it showcases a lot of people. And this is where our algorithms are actually teaching us something new. When we first started the business, we're like, oh, we should show burgers and pizzas.

49:36Turns out people don't care. They don't care about burgers and pizzas. They care about seeing other people. But the magical moment that comes back is when one of our clients literally texted me on WhatsApp. It's like, hey, guess what? Like I had a customer who came in the door saying that they saw their neighbor in one of your reels. Wow. That's powerful. What I also noticed here is I'm looking at Mizuki on the top right. It's an Asian restaurant. Good food, great people, an epic hibachi. And then there's like people are having fun. They're smiling. They're writing stuff on fire. My kids would love to come to this.

50:16And when I see that, I'm going to get interested. I'm going to get curious. and um you are doing all of the classic like putting a logo and doing good cuts so there's post-production being done here either by ai or you know maybe tweaked manually but you have that source material to work from yeah that's right and we collect um on average about 100 pieces of content every month so how long does that take to get to that pace because I presume, Runben, that not every restaurant sees such quick uptake from the QR code. It's like, what's the QR code hits the tables to you have enough to do an ad for them?

50:56What's that lag like? Yeah, so we actually baked in a 14-day free onboarding period, right? So again, understanding the operator's mindset. They don't want to pay for something until it's up and running. During those 14 days, this is where we designed the QR code. We literally shipped these cards to their front door. We handle everything. and so all they have to do is to put it up so here i see campaign performance july 2025 this is like a dashboard and you can see the person got 345 000 in reach uh they got 1100 clicks their click-through rate was 0.32 and wow they got 17 orders you do close the loop as alex was saying and restaurants must be over the moon huh they are in fact this is a unique client we started working with them in July.

51:49So we're two months in. Their general manager just got a company-wide shout out because her store performance is up 104 % year over year compared to the same period last year. And it's unique because they don't do any online orders, even though we still got 17. We absolutely optimize for people to visit their physical location. So this is right outside of a college campus and also inside of the food court. in a mall, which is historically very difficult as a business. And look at this amazing pitch from Gamma.app, one of our partners, a beautiful, beautiful deck. Gamma app is amazing. So tell us a little bit about the program.

52:35Which one did you go to? I think you went to Founding University, yes? Absolutely. How did you find out about Founding University? Which cohort did you go to? F10, 11, 9? It was the past, the previous cohort. So 10. Just summarized, yep. So you went to F10. Tell everybody how you found us and what the program was like and why you chose to do it. So my co-founder, Kit, is based in Seattle, ex-Amazon. And she had met Lucas at one of a local event. And so we got the word from the event and we applied right away. great experience overall. We just learned a ton through the programming and it also gave us enough space to just keep building and getting traction from a revenue perspective.

53:25So it was a really nice, healthy balance whereby the programming isn't overwhelming. It's sort of like, hey, here are the guardrails. Here's what you should really listen to and dial into. And by the way, we're not going to take up your time in really building your business and traction, right? And so So that balance was actually critical because we literally accelerated our revenue through that. This is an important note, Alex. When we built the program, as a former founder myself, and I'm a founder now, right, building this venture firm with this early pre-accelerator founding diversity and accelerator launch accelerator, which was like YC or Techstars.

54:00What we learned was we don't want to burden the founders. We want to be wildly efficient. founders, a founder's most precious resource is their time. And after that, it's their money. And so, you know, we try to do something on Monday night, you learn some content, we'll have a partner, a speaker, et cetera. And then on Thursday, we have you get together with a pod and we, you know, have like a round table discussion with 25 other founders. And we kind of go like deep into the granularness of the business and you get to hear other founders and what they're struggling with and also how they're succeeding.

54:35This makes it not lonely. Being a founder is lonely. And going and finding 25 other founders to spend your time with, that would be a full-time job in itself. So we basically pop up a little, what they would call these mastermind groups, and we do it all for the very low price of$500. And if you come all 12 weeks and don't burn the seat, you can request to get your 500 bucks back. We encourage people if they don't want to take it. They can just give it to us and that helps us run the program. But we have 300 people come to this program, 300 teams, and we pick the teams with great track records, product velocity.

55:10We like builder founders. So you had two founders, Rundin, yeah, in your company? Three. I have a technical founder as well. So you have a technical co-founder. How'd you meet them? So Paul, my technical co-founder, he was introduced through a VC friend. Oh, amazing. So you networked into finding them. And then what's your skill set other than being awesome and visionary? Oh, this is actually the crazy story. I built my career in product and healthcare. So I've worked on telemedicine platforms, genetic testing startups. And this is sort of a, I can't get rid of this idea kind of passion. Whereby, you know, the dumpling was just exceptional at all.

55:54See, this is one of the keys, Alex. And for my editorial director, Air Director Lon, we're rewriting, making like a 3.0 of the curriculum. Charlie Cuddy, Jackie, Kelly, we have so many people who've contributed to this giant curriculum. And I'm going to actually teach the next one myself personally. And we're breaking it down into like the 12 most important components. And why do people start startups is one of the initial things I'm going to talk about. And you have the personal experience and vision, itch you need to scratch. This is one of the key things. Sometimes a founder just is so obsessed, a founder obsession with something like dumplings.

56:41And then they want to honor somebody like their mom. This is so powerful as a concept. Now, you would look at this and be like, oh, it's a SaaS tool for small businesses. Who cares? You know what? Runebin cares. And that's all that matters. The fact that you care means when you come to work every day, you don't need the motivation. I love doing the show because I like hanging out with Juan, I like hanging out with Alex. I tolerate producer Oliver. He's getting his act together. I mean, it's tolerable. He's working. He's a work in progress. More work to do. So, okay, now to my team, you met Lucas.

57:19He got you into the program. Fantastic. It's competitive to get in. Like 10 % of people get in, then another 10 % we invest in. So from application to funding, it's 1%. Every week, we ask people to send in what they accomplished that week. Remember Elon saying, Alex, what did you get done last week? Five things, baby. Five things, right? Now the government's not doing it anymore. R.I.P. Doge, I guess. this concept of what did you get done last week was something Elon and I talked about just when we were kids, when we were both 30 years old in the early 2000s, of just startup cadence. Like, can you get something done in a week?

57:57For the love of God, just get something done. And you had to send in those reports, just send them in. And then the fact is we read them. And the fact that there's somebody else reading it and giving you some feedback, even if it's just a attaboy, attagirl, atta they, them, whatever it is, whatever you're into, it's fine with me. I'm really proud of the work you've done. Getsocialscale.com is the URL. And Rune, anything I can be helpful with as we wrap up here? Any question you might have or blocker you have that we could share with the audience to help everybody learn together? Yeah, I do actually.

58:33I've been thinking about that. So as we fast forward this concept, say three years from now, in effect, what we're doing is we're digitizing word of mouth marketing. And so we are building the core infrastructure for that to happen. And the way I like to think in analogies, it's almost as though we're building the stripe for authentic marketing. we're having to really educate our clients because we're trying to create an entirely new category do you have any advice for companies like ours that's really trying to control the narrative and creating that narrative and category in the in the meantime as we build a company absolutely fantastic question some people manifest the market to exist that didn't exist before airbnb would be one of them the idea of couch surfing like unless you were a weirdo on Craigslist, you didn't know what that was.

59:32Getting in another person's car, taking a ride share from Sidecar, Lyft, or Uber was, Alex, as you know, that's a big jump for people to make. There's a bell curve of people adopting technology, which Alex will pull up in a second. And there's a group of people who are called early adopters. Some people will refer to them as the vanguard, tip of the spear. Now, these people, they love new technology because they see it as an advantage because in the past, they've used new technology and they've experimented with it to solve a problem and had a good experience. Then there's a group of people who are laggards.

1:00:08They're not innovators. They're the other side. And then there's the late majority. In some cases, that might be your sibling who buys a Tesla 10 years after yours did. They hear you talking about it. It could be the early majority, the late majority, but the innovators, that 2.5%, those are the ones that will just try your product because they're so enthusiastic. And not only will they try it, they'll give you 50 good ideas, they'll pay for it. I buy everything. I buy the pixel fold. If I use it and I like it, great. If I don't, it goes in a draw, I sell it, I gift it, whatever. I don't care.

1:00:45I consider it a cost of doing business. The laggards in the late majority, they are going to hand ring forever. And so you have to teach your team to sort these people. And the way you've done that is by having a bar pricing. And hey, you've also studied your customers and realized they're savvy. They don't want to pay for it while they're learning. So you gave them that 14 day trial. Very savvy. don't waste your time on people who don't want your product or don't understand it yet focus on and identify where your most innovative people are and what they've used in the past the people who will love your product are people who've used toast what a great thing i heard you say earlier if they use toast that means they knew what a qr code was you don't have to explain it.

1:01:38They know the value of it because now they don't have to have as many waiters, which are hard to find. You just need runners. Runners don't need to speak English. Runners don't need to be charismatic. They need to run the goddamn mozzarella sticks before they get hard to the table. That's why they're called runners. And that toast revolutionized restaurants where you could have three runners and then one manager come over and say, oh, how is everything? Oh, yeah, great. And, you know, you also got rid of this trying to flag down a reader. The people using toast understand efficiency. They understand customers.

1:02:15They're customer obsessed. So is there another equivalent to toast? It might be the person who puts a cold brew tap in their restaurants, right? Some people might put a cold brew tap in their restaurants or a kombucha one, which means they're part of the vanguard. They're the innovators. They want to try new things and delight customers. So it's really that simple. Canva is the perfect example of a market that manifested itself. They manifested Photoshop for people who don't want to learn Photoshop and spend$1 ,000 on Adobe. No offense to Adobe's suite of products, but they're complicated and they're for professionals.

1:02:57So they said, what about the other 95 % of human beings? Let's manifest that. So what I do think you need to think about is the next group. After you perfect this group, you don't want to get the team distracted. But you as the founder should be thinking, what's another big ticket item that a personalized recommendation from somebody in your town would get people to buy? Well, if you did it for a car company, there's new car companies out there. One of them is called Scout. Another one's called the Grenada. If you had the people who own these cars making videos and you convert somebody, this thing's got a$10 ,000,$20 ,000, these costs$100K.

1:03:41Man, if you get them to do this, you could ask them for$24K a year. Plus, you could say, we'll do$100K consulting for you to help you get this going. You could give us your client list. We could email the client list. The clients could get a special backpack or a piece of merch for doing it. And we would like you to give us$1 ,000 in affiliate fee,$3 ,000 in affiliate fee every time one of these go. What if you sell 10 a month? Now you got a$500 ,000 client. So just start thinking big ticket. What about colleges? People want to know about colleges. Oh, I chose to go to UT. I chose to go to this college.

1:04:20And I made some videos about what it's like. Those high paid colleges, they might pay for something like this. and they might give you, like they give a spiff to people who get full fare Chinese students or Singaporean students, they will give them like five or 10K, these brokers, every time they land something. So I just want you to start thinking about that. You just telegraphed a deal that we're working on. It's RV campers. Oh, smart, smart, smart, smart, smart. Well, here's the thing. I've been at this for a while. And if I seem like I'm really smart, you don't need to be smart. You just need to do a lot of meetings and listen and get curious to go full circle from the beginning of this.

1:05:00You don't need to have 160 IQ. You just need to talk to people with 160 IQs or people with 100 IQs who are gritty. It doesn't need to be pretty, but it does need to be gritty. Runben, I'm so proud of you. I'm so excited to be on the cap table. Sky's the limit here. Get back to work, okay? Thank you. You got it. I salute you, sir. It's been another amazing episode of This Week in Startups. Today's Tuesday. We had the day off, but we got the Wednesday show coming. We got a Friday show coming. Incredible stuff coming. God, I love my job. I love doing this because it's never, ever boring to talk to founders.

1:05:41Before the show, you weren't even here yet. Renbin and I were just talking about League of Legends in China. I mean, it's just founders are such dynamic, interesting people. They never fail to be an espresso shot to the brain. Absolutely. And they, you know, the biggest thing for me was, you know, when he when he went through that diligence thing just this weekend, I was writing to my team about the purpose of the diligence to keep it in mind and make sure we communicate it to founders. And then what a great testimonial. I'm joining your syndicate so I could put 5K into startups because that's like the minimum I think we do is like you put like as little as 5K in which you'll never get on the cap table of a startup unless you can write a 50K, 100K check.

1:06:18they just wouldn't take your check but with the syndicate.com we'll have 20 people put in 5k or 100 we'll have you know 200 people put in 4k whatever it is and we'll put 800k into a promising startup again 80 % fail 90 % fail so only bet and invest money you can afford to lose but he was like hey if you diligence us this much and you've helped us this much hey the inventory uh at the syndicate.com um you know it's probably pretty good if you are an accredited investor the syndicate.com You can go sign up. Kelly and Maddie are running that and they do a great job. And we now have a 50 person investment committee.

1:06:56We call it the deal committee, Alex. I haven't disclosed this publicly yet, but 50 of the most engaged members of the 11 ,000 person syndicate, of which I think 4 ,000 have made an investment, now meet every week. They sort through three or four companies a week, I think, two or three, four, depends on the week. And then they will do pre-commits. And then we decide whichever one gets the most pre-commits, we'll send to the rest of the syndicate. And then I asked them to give candid feedback. We put that together and then we give it an aggregate to the founders if they don't make it through the deal committee.

1:07:31And so they get some good feedback and they know when to come back. Right. I love that. Also, I've dropped by a couple of the syndicate hangouts and done some talks with them. Super nice people, Jason, and just the nicest. Producer Oliver just found my internal message. And I don't think I have any spelling errors here because sometimes I write these when I'm like running around the ranch, smoking a cigar and shooting my gun or cutting the grass. But here, pull it up. On a Monday, on Labor Day, when you're supposed to work. That's why they call it Labor Day, folks. Hey, who was here at nine o 'clock last night preparing the docket?

1:08:05That's my guy. It was me because I'm having a third child and I feel poor. Anyways, here's the intern. Sorry, that was not supposed to be a stopper. Jason, explain to what's on the screen here. Okay, this is our Slack. There's me from probably 15 years ago with my hands up. It's a very iconic picture of me taking at, I think, Gnome Decks. Remember Chris Perillo back in the day? Yep. Huge nerd, a nerd ball, as we say, is the technical term. And he, you know, like does Star Wars characters. But he used to do this like nerd conference. I don't know, it was Geek Con or something. And he asked me to speak, and I spoke at it up in Seattle.

1:08:44And that's me going like, what the f**k? so i use that as my uh internal flag which is me so in wtf and it says at here our dd process due diligence at seed is twofold one educational for pink and red flags insurance accounting contracts we are educating folks on what will happen in series a rounds the punk rock successful founders choose speed over being accounting nerd sorry mike savino who is my internal accounting nerd my first boss uh he's a general partner at the firm to identify major red flags for discussion. I am missing found with 35 % vested interest in a major lawsuit so we can advise them how to fix them.

1:09:18That's it. That's why we do the due diligence process, not to slow things down or back out of a deal. We don't want to back out of deals. When we have conviction, I saw this thing. It's a great clip of, um, not Charlie Munger, um, Warren Buffett. Warren Buffett. And he said, you know, you can talk yourself out of deals. If you know, it's a simple business to pull an oil from the ground, you get a 35 % coupon, you know, when you got your thing and it's like, you don't have to be like a genius you know they're like they're like statler and uh lon help me out here statler and from the muppets baldorf they're like statler and waldorf and you know they kind of sit up there and they answer questions once a year and it's kind of a little bit of a shtick i like it and he says listen i don't need to be a genius to know that if you got this shell thing and it's a layer after layer of free money and you drill down and you take it and this is like smart people and the person's an engineer running the company and they give you a 35 % coupon.

1:10:16There's not some diligence. I don't want to block the deal. You just make the investment and the diligence is the diligence is what it is. And I just saw this week and I was like, I got to remind my team. And I just ran to my Slack and just put this in here. Cause I, the job of leadership at the end of the day, Alex is to repeat yourself over and over again. So people really understand why you're doing things. We do this thing here this week in startups three days a week so that we can help founders and find founders and geek out and change the world. We'll see you tomorrow. We'll change it a little more.

1:10:50This week in startups, he's x.com slash Alex, cautious, optimism.news. Throw him a hundy, please, folks. He's got a third kid on the way. We'll see you next time. Bye-bye. Bye.