Justin Kan & Brian Chesky: The Rejections That Built Twitch and Airbnb | E2344

22:59This is about the Web 2.0 phase. And I think it's an interesting point between that and today. So if we could roll the tape at about the 25-minute mark, we'll take a listen. There was no money in the system.

23:09Lon Harris:So Weblogs Inc., when we built Engadget, or Movable Type, or Dig, or Delicious, or Flickr. These were all passion projects by small teams that just wanted to see those products exist. That's what I loved about Silicon Valley in San Francisco during that time, because people were just doing it, not because they wanted to make money, because it was not a popular thing to do and it was not a good career path. They were doing it because they thought it would be cool. It was like a cool experiment. Yeah. Yeah. Let's see if we can actually get this website to exist in the world. Yeah. And like, will people do it or interact with each other on this weird website?

23:45Lon Harris:Will people dig or read at this story? Yeah. Will people understand what that even means? Exactly. And I love that. I love that sense of exploration. And I feel like, I know this is going to sound like the jaded, like sad guy, old guy, but like, I feel like there's a little bit of that that's missing now here in San Francisco because there's a lot of, the culture has changed. It's matured and people are coming here for their career now. You know, they're like, okay, I want to like be a career. is a good career move. You know what's interesting about that is I think it's cyclical because that actually happened in the dot-com era.

24:14Lon Harris:Yeah. Like towards the end of it, people are like, okay, I'm graduating. I went to Harvard, got my MBA, and I'm going to go into dot-com. Yeah, pets.com, that's a good move. And everybody floated to pets.com in every possible iteration. And the second it got hard when the dot-com boom, they ran back to Goldman Sachs. They ran back to Madison Avenue to get an ad job. And I call it tourist season. We're in the middle of tourist season right now. It's high season. And there's a lot of people here who are building companies. I don't know if their heart's really in it. Lon, what I find really funny about this clip, one, history just repeats itself, apparently.

24:48We're always going through the same cycles. But thinking about the financial sector as similar in terms of value creation as the technology sector, you can go to Goldman Sachs or you can go to Google. Today, the most valuable bank in the world is JPMorgan Chase, and they're worth about$890 billion. The next one is the China Construction Bank,$430 billion, or as we now call it, a Series B. So it's so funny to see how much these paramounts of prestige, these mountains of money, now seem relatively unglamorous and small. Well, what's also interesting there is, remember, I recall that era when the smartest and the best and the brightest graduates from the Ivy League and the top schools were all going into finance.

25:29And there was a lot of like hand wringing, like all of these people who should be our teachers and our scientists and our great thinkers and philosophy. They're all just becoming financiers because that's where the money is. You don't hear that today when we the perception is that our greatest minds are now going into building things and making things again. So perhaps it's a positive correction. It is a positive correction somewhat. But it is not quite as good as taking our best and brightest and maybe putting them out into rural schools to really power the next generation of minds that are going to take us to the stars.

26:03But think about this. In finance, you're doing deals. You're structuring credit instruments, et cetera. You're really just playing Excel. Right? That's what you're doing. Right. And at least in technology, you're often building something that does scale to an enormous number of people. Like there's over a billion people that use ChatGPT, access a huge user base, Google searches, you pay for this. So like Goldman Sachs never gave me a tool. Right. Gave me Morgan Chase, just gives me a fee. It's impossible to argue that these big AI companies are not doing more. I mean, like GrokBot saves me hours of time every day.

26:36And like, there's no new financial instrument that a guy at Goldman could invent, like a new kind of derivative or whatever that would actually make my life better. Like, I'm sure there is a guy out there who is like, oh, man, I wish there was a new kind of derivative today. But like for me, I'm definitely benefiting a lot more from people going into tech and creating amazing tools than I am from people coming up with like a new way to invest in a bet about what the market's going to do regarding banana futures or whatever. Yes, yes. But the first part of that clip, when they're talking about the Web 2.0 era, which is really when I was starting to pay a lot more attention to startups over finance, because I was originally, I wanted to go to get an econ degree and go into banking.

27:19That was the plan. those companies were idealistic but also like silly in a way that modern technology companies are not like i don't know if this is the american dominance theme about defense tech and beat a hurly-burly american but like delicious had a dumb url do you remember how to spell that with all the icio.us i believe yes wow i thought i was the last person who could do that one on command shout out long uh and like dig was spelled with two g's just because whereas instinct started off with instinct.com yeah there was all right there was oh i think it's instinct.co actually that not to not to burst your bubble there but um uh instinct.com oh never mind my my mistake uh but and.co the oh they got they got both they got both folks they got both but the other thing i was say is I think there was this idea that nothing mattered other than users like that when I for like 2007 was when I first started working at uh in tech at Mahalo for a guy named Jason Calacanis it was my very first startup and that was really surprising to me because you you know I got out college and I I took a few econ classes in grad school and the idea to my mind was always like a good company, it's like about margins.

28:39You know, it's about like how every time you sell a widget, how much are you making versus how much you spent to put that widget together? And the higher that margin, the more widgets you sell, like thumbs up, you did a good business. And then I started working in tech and nobody ever talked. I never heard one conversation about that, about like spend versus it was just make number go up how many people used it monthly active users that was the only metric anybody was was checking that's all the investors cared about they'd give you basically unlimited runway if you just kept growing fast enough and adding a bigger footprint cosmo.com is always the one i come back to you remember koz mo and it was yes here was the pitch for Cosmo.com.

29:26It was just, it was like Grubhub or DoorDash before those existed. But the hook was there was no minimum order size. So you could order like a lighter and one muffin and they would send a guy from somewhere like from Pink Dot or Circle K or something. A guy would go pick up your muffin and your lighter and then drive it to you. And I don't even think you had to tip. You would tip like a dollar. Like you didn't even have to tip. It was like the cheapest thing in the world because all they cared about was one more person today used Cosmo and we can go back to the investment team and say, looky, looky, it doesn't matter how much it cost us to go bring this guy this muffin.

30:05He used the app.

30:06Lon Harris:Hey, everybody. I'm here with Heath Paris. He is the founder of Lightfield. They are an AI native CRM and it builds and it updates itself in real time based on whatever's in your email, your calendar, your Slack, your meeting notes, you know, all the most important stuff that keeps getting lost. Great to be here. When people go to try Lightfield, do I need to talk to my CTO or my CEO, or can I just start using it as an individual and, you know, like a bottom-up SaaS kind of solution? You can play single-player mode or multiplayer mode. How does that work? So you can absolutely start in single-player mode as long as your CTO or CIO will let you connect your mail-in calendar.

30:43It's really sort of the backbone So we have some folks who try it out by themselves and then eventually they move their whole company over.

30:52Lon Harris:Lightfield is model agnostic. So if I want to use open source, if I'm super concerned or I have an arm, or if I have an on-prem system and my CTO and my CIO are very militant about that, I can switch models and use whatever I want. It's headless. That is correct. You can use any model you want. All of our providers, the providers, the providers, the providers, the providers, sign a zero data retention clause. They're all in America. But it is truly headless. You can use the model that suits you best. So everybody go check out I'd feel dot app. And so I think that led to a lot of just like incredibly dumb nonsense because it was just purely who's going to use it, not does this make actual sense as a company?

31:36And today, everything's super frothy around AI. But I do still think people pay more attention to that. Like, does this, what's the business model? Is this ever going to make sense as a company? I hear people talking about that with Instinct today, where they're like, it's always going to be free. Like, yeah, they, yeah, that's what the Noah Shin from Instinct did that invest with the best interview, I believe Monday. And he said, it's always going to be free. They're just going to take a cut of transaction. So if you buy book tickets for a plane trip on your instinct agent, they'll take like 2 % or 3 % or something.

32:14And they said they're even boutique hotels that are offering them like a 30 % cut if their agent makes a reservation. But people are already like picking this apart. Like, does this make sense? And the app is like, you can't even use it yet. It's still waitlisted. It used to be years before people had that conversation. Well, you actually outlined some very good examples of why this has changed over time. Go back to Cosmo. Think about what they're doing. That's not a pure software product. That involves real-world purchasing. It involves people on bikes or cars moving things around. There's no way to scale that without charging a lot of money.

32:48Now, contrast that to the Web 2.0 era when you have Dig and Delicious and Weblogs and so forth. You could add a million marginal users at the cost of some bandwidth at some CPU time, right? Now, take that to the AI era. No longer the case. serving customers has real costs. We are in a compute crunch and every CPU or GPU cycle that you consume has a real cost to it. And that's probably why companies are monetizing today faster than they were in the Web 2.0 era because you kind of have to, or you're going to pull a YouTube and probably not find your Google. Yeah, if OpenAI existed during the Web 2.0 era, they would never have ads by now.

33:22They would just purely be about, we want every single human being in the planet to be using OpenAI. It's only because it costs them so much every time I'm like, what's this plant? You know, they have no choice. Whenever I replied thank you to my JGPD codex instance and realized that I'm using asteroid, it goes, thinking. I'm like, oh, man. It goes, you're welcome. That was like half my audition. You boiled a puddle. How dare you? It's okay. I'm going to boil a lot of puddles before I'm dead long. I love it. It's like a shirt a guy would be wearing on like a cruise ship. Like, I'm going to boil a lot of puddles before I die.

33:59All right, we're getting silly. One more clip before we wrap with Justin Kahn. I love this one. It's for about 57 minutes, so towards the end. He's got some great, very practical advice. Founders need to recognize their own strengths is the observation. And boy, howdy, never working for Jason, who's a wonderful manager and founder. But I have at this point now worked for a lot of different founders across a lot of different companies. And this is very applicable advice that I feel like a lot of startup people should take to heart. Let's take a look. What have you learned now through these four companies, five projects, six projects?

34:38Lon Harris:You've incubated stuff. What do you think is at the core of creating startups? Well, I mean, I think that the most important thing, really, the kind of meta level important thing is to know yourself. I think most people do not spend enough time understanding themselves. and understanding what are you good at and what are you not good at and for the things that you're good at how do i like focus on those things and do more of them and for the things you're not good at how do i either improve or how do i delegate those to someone else i think most founders hit a wall because they're doing something it starts working and then they don't get out of their own way you know they are they insist they think because i created the product and it worked which there's a heavy dose of survivorship bias there i am gonna like i all my decisions are right So I want to micromanage kind of all these other parts of my company where I want to make all these decisions.

35:28Or my ego is such that I don't get out of the way of these other people I brought into the company to let them operate. And I feel like that's a very common problem that I see all the time. And that's a problem that I've had in my life, throughout my life, that I've kind of only, you know, in the last maybe five or six years really understood deeply. This really stood out for me so much because I do feel like you get a lot of startups where the founder becomes this kind of not just like we think of bottleneck in terms of workflow, but they become not just a workflow bottleneck, but a creative bottleneck where it's like every decision has to go through this one person.

36:03And maybe they're not great at making every kind of decision. Maybe they're great at making this handful of decisions, but they should let this handful of decisions be made by the people around them who they brought in. And I just as a quick aside, one of other than Jason, of course, one of the other best founders I've ever worked for was Clark Benson over at Ranker, who had a very good sense of this. He was a product guy or he is. I shouldn't say was. He's still alive and running Ranker. He's a product guy. And so we had very good instincts about how the product should work, how the app should work, how it should be designed.

36:35UX, UI. None of us would really question him there. But then when it came to like media, especially, which is what I was doing, the editorial side, he would really let the team experiment and explore, try different things on social media, try different things on YouTube. You guys know that landscape so well. Just go. And then it worked really well. And we ended up being able to grow that media business a lot because Clark kind of got out of our way and understood I'm going to be over here worrying about the app and the product. You guys go worry about that stuff. This interview, in longer than just the clip we just played, I really do recommend that anyone listening to this who's enjoyed it to go listen to the whole thing.

37:10I'm really glad that I did. Justin talks a lot about being aware of himself and understanding what happiness is and creating distance from his emotions. Just comes across as a very, very mature person who's done a lot of experience and a lot of learning from that experience. But in this case, what I found very interesting, Lon, was an implicit rejection of Founder Mode. Now, not really, because Founder Mode actually came out as an idea later on than this interview was taped. But here we have an executive who's, you know, taking a company from zero to a billion dollar exit. So they have done the thing, the most impressive thing you can do in Silicon Valley, talking about shared responsibility and letting, you know, smart people run their own game.

37:49And that was the conventional wisdom that I grew up in, in startup land. And today, very much so, it's now pivoted towards founder mode, you know, one person carrying the torch, providing the direction, setting the North Star and being involved in the details. And that's a change. And so I know all the tech is bundling or unbundling or cycles and recycles. But this did surprise me as tonally different. I think I think it is. It's a it's a different approach. And it's it's a it's a better it's a better approach in a lot of ways that doesn't necessarily assume one person has to be the keeper of the flame for like everything that a startup does.

38:22they can sort of set the larger vision and then let sort of everyone go. Really good flashback coming up today. This one comes to us from May 2023. It's episode 1735 of This Week in Startups. And your guest is Brian Chesky, the co-founder of Airbnb. This episode dropped the same week that Airbnb rolled out Airbnb rooms, a return to the company's original rent out your spare room concept. So that was why co-founder and CEO Brian Chesky had agreed to be on the show. To go back to 2008, seven investors passed on the chance to buy 10 % of Airbnb for$150 ,000. The founders famously kept the lights on by selling novelty, politically-themed cereals.

39:09We're going to talk about that. Also in this conversation, Brian talks about early rejections, obsession with the customer, how Airbnb is organized and where he thought AI was going to take the hospitality industry. We're going to look at some of those projections. So let's just dive in. No need for any further intro. The first thing, Alex, I wanted to talk about right away in the interview. Brian starts telling the story about how investors did not like the idea for Airbnb. Now we accept Airbnb is like, obviously, that's a great business. this. I use Airbnb when I went to Rome earlier this summer.

39:46We stayed at an Airbnb. It was a wonderful experience. But back in the aughts, when Brian was first pitching this around, people were a lot less receptive. Let's take a look at that clip.

39:57Lon Harris:Everybody, when they see you saying, oh, my God, I love Airbnb. How do you reconcile that as an entrepreneur? We came up, you know, obviously, I know Joe told the founding story, but I'll tell a little bit of the there's a founding story. And then there's Jason's a story of all the rejection. The first time we came up with the idea, it was October 2007. It was for a design conference that was coming to San Francisco. There was an after party at the Fermat Hotel. We went to the Fermat Hotel. The first person I told about the idea, he looks at me with a straight face. He said, Brian. I said, yes.

40:29He goes, I hope that's not the only idea you're working on. That's what he said to me. And this is like a design luminary in our industry. And that was kind of the general sentiment. I remember in January, February 2008, Joe and I were living in San Francisco's apartment, and we had a roommate named Phil. And Phil worked for this company called Justin.TV. Justin.TV was a precursor to Twitch, and it was funded by this program called Y Combinator. Now, I didn't know anything about Y Combinator. I didn't know anything about Silicon Valley. I didn't even know what angels were. Somebody once told me they're these people called angels, and I said, oh, my God, this person believes in angels.

41:07So I was really naive. I didn't know anything about Silicon Valley as a designer by training. And Michael said, I can introduce you to these angel investors. And so Michael introduced us to like 10 to 20 angel investors. Now, at the time, Jason, we were trying to raise$150 ,000 at a$1.5 million post-money valuation. So for$150 ,000, you could have owned 10 % of Airbnb. And the majority of them didn't even reply to the email. email. I actually ended up publishing a bunch of the projection emails, but many people said like, this isn't a good idea. Many people said like travel, we're not like excited about travel.

41:44I remember one investor said, we love everything but you and your idea. In other words, we don't... I'm like, well, everything else is good. Unfortunately, I was like... So I thought to myself, wait, what else is there? There's me, there's the idea. Yeah, I guess there's the name, but they don't like the name either. So what they meant by they liked everything, but us and the idea was, it was three founders, one software engineer and two designers. And they thought, well, you have like two, too many designers in your founding team. You know, like people just associated designers as like non-technical and therefore like maybe not adding value.

42:16And I think they, I always felt like Joe and I, our ability as being designers was actually part of the secret sauce of everybody because it was not a pure technology problem. And also people said, this is crazy. Strangers never say they're strangers. I mean, I will admit I had I was already working for Jason when Airbnb was new and he we talked about it probably on a podcast episode very much like this. And that was also my reaction was like, well, that sounds dangerous. Like, how do you I'm going to go walk into some stranger's house? I'm going to leave my keys and some stranger is going to stay in my room while I'm gone.

42:50Like, it just feels crazy when you're not using it. And then when you're using it, like now, I don't even think about, when I go to an Airbnb, I don't even think about this as somebody else's home. It's just my home for the week. No. Yeah, yeah, yeah. But I think there is something to be said for generations growing up in a post-stranger danger world. I mean, think about the PSAs that you were getting when you were a kid. I mean, it was every person's going to try to offer you candy and stuff you into a van and take you off to, you know, Tuscaloosa or Timbuktu. And not really the case. As it turns out, most people are pretty cool.

43:18Most people are fine. And you can get along just okay. But for Funlawn, guess what 10 % of Airbnb is worth today? Oh, my God. I don't want to think about it. It's big. I guess.

43:33Like$500 million. $9.25 billion. Oh, my God. That's insane. How is Airbnb worth that much money? That's crazy. Airbnb is currently worth$92.5 billion. It's because it became a huge business. those investors were not just wrong they were phantasmagorically wrong because it turns out this is popular the world around now what i want to say is that airbnb has over time changed a bit if you think back to the early days uh especially if you knew couch surfing from before airbnb right it was a pretty hostile ish experience if you will it was not five star it was not instagrammable though we didn't have instagram back then um but today i do feel like airbnb is much more upscale you rent a whole cabin etc lovely but i mean back then it was it was great Yeah, it was more variable.

44:20Like in the early days of using Airbnb, sometimes you'd show up at the place and it was amazing. But then other times you'd be like, this one doesn't really look exactly like the photo. It was a little bit more of a shot in the dark. Whereas I think today they've got it basically locked down, you know, from the Airbnb page. If it's got like a 4.8 or up rating and you look at the pictures and it looks nice, like you've been pretty much confident in what kind of place you're going to be getting. For sure. But I will, though, you have to want the quirk. Like, if you want a boring room with, like, a bed and a shower, then just go to a hotel.

44:54If you want anything else with a more personal human touch, then I think Airbnbs are great. No hotel has ever given me free weed gummies in Texas. But an Airbnb has. I actually, I feel like it's when you want, when you're just staying somewhere and you just want convenience and it's just like, like, hotel, obviously, when you're going to be busy or whatever. But if you're going somewhere and you want to get like a feel for the place that you're going, then you want an Airbnb because you're staying in a neighborhood. And there's like a person who's going to leave you a binder that's like, go to this pizza place.

45:26It's really good. You know, like that's what you want when you're like, it's like a great vacation option. I don't know if it was like business travel. I'm just like, put me at a hotel. I'm putting it on the ramp card. But for Rome, it was perfect. I would very much recommend an Airbnb. I'm so startup-pilled. that when you said Rome, I thought R-O-A-M, Howard startup? No. Wow. All right, that's what's going on in my head. I mean, Rome's the eternal city, Alex. Rome's the eternal city. Yes, the place where they had the big circle they used to flood and have ship battles inside the town, yes. Correct.

45:56Gladiator 2 is historically very accurate, I'm sure. So our next clip for Brian, he started, you could, at the tail end of that other clip, he started to tell it, but we want to get the full story in here because it's such a good, iconic startup story is when he talks about it. I tease this a little intro, how they funded the company in part by selling parody political cereals during the 2008 DNC and RNC. Here's Brian. So we go to Y Combinator. We go to the interview. It's exactly what I expected. It's Paul. It's Jessica. It's Trevor Brackwell. And it's, I think, Robert Morris. And they're all like, basically, they all ask us questions at the same time, like all four of them.

46:35And I was like, totally bewildered. And the first question Paul Graham asked me is, people are actually doing this? And I said, yes. His second question was, what's wrong with them? And the interview at that point went downhill from there. Midway through the interview, he basically tried to get us to create Stripe. He's like, you should create this like payments company or like an online bank or something. And we're like, that seems like a really good idea. But like, we have an idea. And we're about to leave the interview. It doesn't seem like it's going well. And Joe takes out a box of Obama owes.

47:08And he hands it to Paul Graham. And Paul Graham's like, looks like he just got a novelty gift. He's like, all right, thank you. And we go, what's the story? He goes, this is how we funded the company. And he goes, what do you mean? He said, well, we told him the story, how we like made the cereal boxes. And then the way we sold the cereal boxes, we mailed them to reporters and they put them in their newsroom desk and everyone buy them. And he said something like, I guess if you can convince people to pay$40 for a$4 box of cereal, then maybe you can convince at least some people to stay in each other's homes.

47:38And he ended up admitting us to Y Combinator. And I guess we've never looked back since. I also want to give credit to Jessica because I think Jessica thought – I remember Paul and Jessica said later they thought we were like cockroaches. And I think they mean it in a good way that it was like an investment in nuclear winter and in a nuclear holocaust, the only thing that survives are cockroaches. And the only thing that would survive an investment in nuclear winter would be the founders of Airbnb. We said, we won't die no matter what happens. And so they basically funded us because we seen Brazilian unkillable.

48:10And like, even if the fundraising market was dried up, we would just go on. So a couple of things. One, I do love hearing about a startup struggling in their Y Combinator interview because it's kind of a famous test of time, a coming of age moment. You become a man when you go through this. But it just goes to show that not everyone's perfect and people still make mistakes, even the vaunted founders of YC. But Lon, I have to say it does track with what I've learned about startups to know that the grit matters more than last week's traction. And if you do know that a founder won't give up, well, that's probably half the battle of backing someone right there.

48:42Yeah. And I mean, I think that, you know, it's just like I was saying a little bit before about the, you know, that you're funding the founder, not the concept or the company that has, oh, that that has always been kind of a truism. And I think this is a real, you know, case where you could see that is like, it's not, it is resiliency, but it's also the creativity and it's the resourcefulness. I think that that Paul Graham was noticing from these guys that like they're just doing business. They're just making observations. They're seeing angles. They're trying things. They're not afraid to, like, do something kind of goofy to try to get attention to make something happen.

49:20And I think that seeing that in a founder has got to be really encouraging as an investor, that it's not some person who's just going to, like, sit at their desk, head down and work on their one project single mindedly. They're a head on a swivel looking for opportunities. Well, there's something about being a founder that is just sheer persistence and not letting anything stop you. And so if you find some people that have managed to somehow hack at the same time the political cycle, the news, media, and their funding crisis in one fell swoop, and to do it in a way that makes them look kind of cool and punk rock, I mean, seems like a pretty obvious thing to fund if you're an early stage venture capitalist.

49:58because you want people, and we've talked about this in the show ad nauseum over the years, who are willing to look from a different angle or perhaps even a little bit outside the rules. Like, I don't think you're actually supposed to use Obama's name and reuse cereal and probably resell it and blah, blah, blah. But no one really cares, so go for it. You know, off you go. There's tremendous value, and this has always been true from the aughts to the present day. A person who has a good sense of, like, how to get something to go viral, like how to communicate an idea that a lot of people are going to be interested in, There is always value in being one of those people.

50:31If you have that, like we were talking about instinct moments ago, the viral assistant app, that that's the same thing. It's like the entire strength of it is how to create something, how to kind of have a comment, how to make a statement that is repeatable and shareable and encourages people to, you know, what they now call like stop the scroll. Like if you are that kind of person, that has been a marketable, useful skill for 25 years plus now in the Internet age. And I think especially as attention gets more and more fragmented across platforms and shorter and shorter form content, being able to stop the scroll is going to become, I think, a core competency of pretty much any founder.

51:09I mean, think about how we've seen launch videos of startups go from being super dorky nerds staring at a camera. Shout out Justin Kahn to now the slickly produced, you know, quasi Marvel's Avengers style films that people are now putting out at the cost of like 50 to 100 K. Yeah. I mean, Airbnb was trying to raise 150 total. Yeah. I mean, we've seen it even extend beyond tech. I mean, like entertainment media now is also about like capturing those viral moments and like like the like backrooms, you know, like backrooms was a viral moment long before it was like a cultural phenomenon. It grew in the telling because it was like originally like a person with a good sense of like this weird liminal hallway video is going to get clicks.

51:51And so I think we're seeing that across the board. That is a marketable skill in every industry in 2026. Yeah. If you can hack attention, pretty much you can work in media, PR, venture, startups, tech, law, business. I mean, like anything but coal mining, you're going to be fine. The back room is one of an interesting analogy. the lawn. Can I just go off script here and just ask you if you liked that film? I did. I do like the background. Okay. Okay. Why? I will, I will tell you this. I think, or to quote Paul Graham, what's wrong with you? I think as a movie, you can tell that it's a first, it's a first time filmmaker.

52:27It's a young guy who's kind of figuring out narrative. Like I think there are, there are some like dead ends narratively in it. And you could maybe make that same story a little cleaner. Having said that, I think the back rooms themselves are extremely compelling. And I have since YouTube, like, the idea of being trapped in this, like, sort of surreal, repeatable, like, quasi-realistic environment. And I think that he invented, like, the original backroom shorts are from before the AI era. But I feel like in the AI era, it feels very like relevant. This like endlessly repeating environment that like degrades in realism over time.

53:11And like the text becomes unreadable and things start bleeding. It's like a glitch burst in some ways that we become more accustomed to in the AI era. And I think that that makes it sort of inherently just very compelling. I think it's a great setting, more than a great movie. But I did enjoy the movie. repeating text, quick release cycle, slowly losing your sanity. Are you talking about Backrooms, the movie, or AI in 2026? I mean, I think that's what's in part so potent about it, is that without it, like the best AI metaphors are not like super on the nose. They're like, this is what interacting with AI sort of feels like.

53:49And I feel like Backrooms really captures that specifically. And so the other one like that is Pluribus, that Apple TV. It's not about AI, but it's like Carol's frustrating conversations with the hive mind are reminiscent in some ways of what it's like to interact with AI. I can't wait until my kids are older and I can catch up on like years of television and movies that I've missed. Late nights. Make time to catch up on Pluribus over your late nights. My wife steals the television and watches HGTV. And no offense, that's not what I want to catch up on. So I just let her have it. But on the point about AI and what's real and what's not, I want to take us all the way to the 59-minute mark of this video because we get into a very interesting conversation about AI and what's going to happen when it becomes harder to tell what's real.

54:37I want to bring up this clip and the one that comes after it not because this is the most technical, practical startup advice ever, but because I think today we spend so much time thinking about AI. It's like the thing. But in 2023, when it's going to be came out, it was a smaller industry. It was not the entire world. And it's good to see how smart, engaged minds consider the technology before it became the only thing we can talk about. Take a listen. And so that's where I think it goes. And I think that we don't have a search problem in the future. We have a matching problem. So we are going to use AI to match you to whatever you want.

55:09And I think that the other thing is I think we're going to be really good at hopefully identity authentication. You know, the problem with AI is what's the first word in AI? Artificial. The biggest risk before machines come after us is they become us. And we can't discern who is a machine and who is not. And I think that we're already seeing that. I mean, when that Pope photo circulated, I thought that was a real photo at first. I did too.

55:33Lon Harris:I was like, that's weird. The Pope is going for it. Yeah. I was like, pretty awesome. He's got Balenciaga. Go for him. But that's today's technology. So we're about to live in a world where someone can sound like me, they can behave like me. And as we spend more and more time online, it's going to be hard to discern what is real and what's not real. So I think in the age of artificial intelligence, the other thing people want is authenticity. And authenticity is whatever's real and whatever's authenticated. So I think our brand is kind of authenticity. Like we're not going to ever be the most digitally immersive company.

56:04That's going to be social media or entertainment. Our value is really the physical world. We get you online, offline with people different from you all over the world. And that comes with starting with knowing who you are, authenticating your identity. Lon, I'm impressed by how prescient that was, although it was only a couple of years in the past. But still, I don't think I would have had that clear of a perspective of what's coming. But his point about AI can sound like you, look like you, we are seeing AI models in the voice category today advance to the point to which you can feed them a very small snippet of audio and ape someone's entire speech patterns.

56:38We're seeing people create, I think we used to call them deep fakes. Now we just call them realistic videos of people. You can actually have avatars kind of like stitched over yourself digitally. And we're seeing people's parents get called by fake callers that sound like their children. So everything he called for is coming true. And I do think that he's correct that we do want more authenticity. I just think it's funny that he was talking about the physical world in a brick and mortar sense. But today when we talk about AI, the physical world, we're mostly talking about robots or embodied AI, if you will.

57:07I mean, I think this prediction in particular, we've been hearing since the early chat GPT era, which is like, this is going to lead to a revival in in-person experiences, authentic experiences, human experiences, like live music is going to make a huge comeback. and we're all going to start hanging out together and going to block parties more. I really like that sort of take in 2021, 2022. Here in 2026, I feel like that's not. So far, that has not really seemed like it happens. A lot of people have become much more hostile to AI outputs where they insist on, I only want to read sub stacks that are 100 % written by humans.

57:52I don't want slop on my timeline. Like there's definitely a thirst for authentic content, but I have not seen like I'm going to go to five extra concerts this summer or I'm going to host more dinner parties. Maybe I'm just not popular, but I don't know. No, no, no. You're like we've seen that as a society yet. You're absolutely right. And here's the problem. I think AI and the general erosion of trustable media would lead to more people being outside more and together. but the problem is we're all working more than ever to keep up with ai so no one has time right like there's in five years maybe we'll all work a little bit less because agents will take on so much of our workload that we have more spare time to take a walk during lunch yeah go see a friend long i could fly down and see you and take you out for barbecue i'd love that but right now you and i are both so far behind at work yeah that there's not the the capability to do it and so i I think that's the real sticking point of AI for me right now.

58:51You and I are both AI users. We're fans. We're not far from haters. But I do think that all it has done for a lot of people like ourselves is ratchet up the intensity and duration of work. And that is not quite what I had in mind when we got this amazing advancement in AI. Yeah, it is one of the rare points of total agreement between myself and Jason's all-in bestie, David Sachs. We don't agree. We don't agree very much. But one of the things we do agree on is that rather than costing people their jobs, at least so far, what it seems like AI has done is made everybody a lot more productive at their job and therefore a lot busier at their job.

59:29So you're getting three times as much done. You're maybe working twice as much, but you're not being replaced. So on the plus side, you still have a job. It's just harder now. Can I challenge that ever so slightly? Please. All right. So I was here at the Good Ship launch a long period of time. Several years in podcasting time, you're doing three shows a week. We did a lot of work together. So I've been through a lot of iterations of the show. And one thing that was a consistent thing during my time was I wrote the show most of the time. And it was a lot of work. Prepare the docket. Jason would have new ideas.

1:00:06We changed the format. It was this evolving living process. And now, Lon, that's no longer the case. and we've done the modern thing and allowed really agents to write a chunk of it for us because it's just collecting information and putting it down on the page. And I don't think you would go hire someone to prepare the show notes in what we did when I was brought on. And I think that is a change in the example of less job. I mean, yes, but there's a guy, his name is Zach. He works for us now. And he is the one who's making the dot. I used to write the docket by hand. It was my job. It took up a big chunk of my day.

1:00:46You would do it for different shows than me. And I spent three hours putting this document together by hand with all the pieces of research or whatever. So Zach does that now. I'm freed up. I'm working on the Substacks or whatever. Check it out. TWistartups.substack.com Best headlines in the game. No one outshines lawn in the pun game. Read everything he writes. Makes me smile every week. You're very kind. But so, you know, Zach is now doing that job. Maybe he's spending an hour or less a day on it. But the job is now not only putting the stories. You still have to pick the stories. Claude's not good at that.

1:01:28Still need a human to curate what we're going to talk about. You give the stories to Claude. There's a Claude skill that turns those stories into the docket. it. Zach had to write and brainstorm that and create that skill. And then every time we have feedback on the docket, he needs to go back and fine tune and improve that skill. And then he's the human in the loop. So whatever the skill comes out with, he's got to go through line by line and be like, they didn't nail this, nailed this, didn't nail this. It is probably like 20 % less work over the course of the week, but it is still a job. And I don't think in two weeks, we're going to iterate our way out of that job.

1:02:09I think that's going to be Zach's job for at least the next few months. And then it'll be on to the next skill and the next skill and the next workflow that he can improve. And maybe there is, here's what I would say in three years, in five years, maybe we'll reach a point where these models have gotten so good that we won't need a Zach anymore to fine tune them. We won't need a Micro One with all their experts to help the Frontier Labs make the models better or a Taste Labs and all their experts to help make the models better designers. Or maybe we'll be done with that. I don't know, maybe. And maybe then we'll be talking about, okay, now that all the architects and accountants and lawyers train the models to do their jobs for them, now nobody has a job.

1:02:54I don't know if that's going to happen. No, I don't buy the... But I don't think that's happening yet. No, no. I'm just seeing little bits of work get automated. Like just to put another example in this, I write a lot and I have created some skills inside by a Codex instance that helped me do what I call pair editing. So I abuse commas and I need someone to go through my drafts and just remove the commas. Like this has been a problem my entire life as a writer. I know it. But I never want to sound like AI because I do all my own writing. So I've made skills that edit my work, leaving the tone, the jokes, the way that I write, but just solving the grammatical issues that pop up here and there.

1:03:35When I was at TechCrunch and I started off, I had to take my writing and bring it to a human and have them do this. And here's the thing that blows my mind. You know what's really good? Codex. We'll just chat to you, I suppose. It's incredible. And so I do think that we will see a slow erosion of previously high-touch labor categories that are in the knowledge work game that will change the employment system structure. It just isn't going to happen in 18 months like a thunderclap like everyone thought. But I wouldn't go all the way the Sox view that only more jobs, no job disruption. I would say more jobs net long-term, medium-term churn.

1:04:09And I think that's probably a great tradeoff for what we're going to get down the road. I'm not worried about this. I'm just chewing on it as we go through it. Yeah, no, I mean, I think there's some wisdom to what you're saying. And we're definitely going to see some movement in general, especially, like I said, in the two, three, four year time range when all of the expertise and fine tuning work that we're doing now on models is baked in and done. And then like, maybe we don't need to keep having accountants look at the output and be like, oh, mess that part up again. The model will just know and benefit from the their expertise and get that get better to that point that we don't need them anymore.

1:04:49I think that is definitely I think that is definitely possible. Now, one more clip before we go. Sticking to the theme of Chesky being a little bit early to things that are now very obvious. We're going to play a clip of him talking about what's going on in the realm of AI software development. Now, of course, here in 2026, we are deep into our Cloud Code era. Everyone uses an agent to write code. Sure, but back in 2023, very much not the case. But here is what Mr. Chesky had to say then.

1:05:15Lon Harris:On the side, a friend, a few told me, hey, you got to try this place in San Francisco, Cafe, Okinawa that I've been going to to get tonkatsu sandwiches. I told like three people about this because I love these when I go to Japan. and they're just, everybody goes there and they're like, oh yeah, you're right, that was great. And now they spread to the next person and that kind of word of mouth, I think like this AI is gonna find little things like that where it didn't know that this was something that you would be delighted by. And this is such an opportunity. I think it's amazing. And by the way, I think I heard another, one of your podcasts, you said something that really resonates that I think it's just worth calling out.

1:05:51The cost to develop software is about to go down. And maybe a good analogy, Jason, would be like the camera. 130 years ago, very few people could operate a camera. And so therefore you had to be a specialist to take a photo and there weren't a lot of photos. Suddenly computer programming is just basically telling a computer to do something in its language. AI means you can now tell a computer to do something in your language. The moment you don't have to learn a different language, you can use your natural language to English, suddenly kind of everyone in a way can be a programmer like everyone's a photographer.

1:06:21You don't have to actually have a skill. Now there will be programming skills, but suddenly anyone can do that. Now, when it's possible, there's going to be so much more software. We're going to live in abundance of software. I think in a podcast, you reference like a ski instructor or a ski company, like a niche business that couldn't have developed, hired great software engineers, but now they can, the cool, the best engineer you've ever had developing their app. And so suddenly the skills started to different. We have to understand skiing, human psychology, taste, design, and how to operate and have a conversation with that tool.

1:06:54But you don't have to necessarily build the infrastructure. Just like we never built servers because we had AWS. But if we launched five years earlier, we would have been really good at like kind of building out servers. Racket stacking servers.

1:07:06Lon Harris:I mean, your first half a million would have went towards a co-location facility. And now it's like, you're just going to talk to this thing and it's going to make your software for you. So I think this is going to create, I think this is going to create millions of startups. I think that like entrepreneurship is going to be a boon. I think there's going to be millions more. I think anyone can essentially do the equivalent of what software engineering only allowed you to do only five years ago. It's going to be awesome for many people. It's going to be wildly disruptive for others. Albert Einstein used to have a saying the best way to keep your balance in a bicycle is to keep moving.

1:07:37And I think the best way to keep your balance in the world of AI is to keep moving forward and just adopt the tools. Don't fight it. To put some context on this lot, I looked it up. In mid-2023, the leading AI models were GPT-4, Claude-2. Yeah. And Llama, too. So this was way before they were good at coding, but he was able to see clearly three years ago where this was going to go. And I think they were dead on. Here's the question, though, for you, because you are deep in the launch ecosystem, accelerators, Foundry U, et cetera. Sure. So Chesky was saying we're going to see millions of new startups.

1:08:12And on one hand, I do think we're seeing a lot of experimentation in the market, but it doesn't feel like we're seeing that many more new companies come up. So I'm just curious what you're seeing and if that prediction from this Airbnb founder has borne out. You know, I'm always a little dubious of this prediction, especially because a lot of tech people tend to use it to advance the argument that like as like a pushback against being anti-AI. Well, like, oh, but it's going to lead to massive job disruption. Like, well, those people are just going to start companies. And it's like, well, everybody can't run their own.

1:08:46Some people need to work for other people's companies. You need users who have their own money from other jobs where they work to buy. I don't know if a capitalist society where literally every single person owns their own company is sort of functional. I don't think that's the way our society functions. So it always seems like it's missing a little gap there in some ways. But I do feel like we are seeing an explosion in entrepreneurship. We are seeing a lot of new companies and we're seeing a lot of people who have started one company are now starting three companies or are now starting five companies.

1:09:27And so we're seeing that grow exponentially, where if you are already entrepreneurially minded and a builder, you are getting great utility out of this and using it to do a ton of projects. I think I think what's missing is the non-entrepreneur people. The prediction I think that Chesky and others are making is that people who have never started a company who maybe had ideas were always like, I don't want to start a Squarespace. That's too complicated. And now they'll be like, oh, but with AI, I could start that bagel shop I've always wanted, or I could open my own dog grooming business like I always wanted.

1:10:05And I'm not sure we're seeing that yet. Maybe it's just that the word hasn't spread to those communities and those people that like AI makes it that much easier to start your own company. but like, I think we're seeing a lot of people who are already in the, I'm going to one day start a company mindset, using these tools to do it faster and easier. I just don't know if that's become universalized yet. Yeah. On your point about not everyone can become a founder. I think it was Yo Gotti who said that everybody wants to be a general, but don't nobody wants to be a soldier. And I think that does apply here that, you know, you can't have an entirely top heavy organization in the economy.

1:10:43People have to have jobs versus CEO titles. um the thing that i've been thinking a lot about though and just pairing off of what what chesky was saying is that now that you can program in your natural language your normal language uh people are building a lot more out of sight like one thing that i that i keep being shocked by is when my non-technical friends people that i've worked for off and on for a decade plus uh say things like oh yeah so i was using claude yesterday and i i made this app and i'm like what you you couldn't even open google docs five years ago what are you doing and they're making their own stuff, things that they need, little things.

1:11:16And so I'm always trying to figure out like, if we're not seeing this explosion of startups that we expected, are we seeing instead people with jobs essentially making micro software companies inside their own role for themselves? And that's maybe where we're seeing more of this impact and rubber hitting the road and so forth. I'll tell you what else I think we're also seeing is people who are already doing things like they're a content creator making sub stack posts or they they are a dog groomer with like a van that they drive around like i think a lot of people who are already doing that are becoming much more effective with the help of ai tools like one thing that i am always shocked by as a person who's been doing this job for 15 close to 20 years now one of the massive headaches and also advantages like 15 years ago that i had was i was pretty good with google analytics like i knew how Google Analytics worked and I could look at the pages and make comparisons and be like, oh, we need to do this or this page is doing really well.

1:12:18So we should make three more pages like that. Like I learned how to do that. And that was a very like, not everybody had that skill who was making blog pages or whatever. And so that could put me at an advantage. And today you could just download your Google Analytics or your YouTube Analytics or your X Analytics. I know because I do this all the time. And you could just give it to Claude or GrokBot or whatever and say, what kind of post should I be making? Or what can you tell me? You don't have to know one thing about how any of it works. You could even go. I did this once, too. You could go to Claude and say, I have a YouTube channel.

1:12:53I want you to tell me what kinds of videos I should be making. What should I do in analytics? and it will tell you exactly what charts to pull for it and what metrics it wants to look at to make you a full report. It takes all the inherited knowledge out. So nobody has to show you how to do that stuff. And I'm sure those kinds of processes are making people much more powerful at the tasks they were maybe already doing. Yes, as long as someone's already done it and it has been ingested and is chewable by AI, then sure. I'm always so excited about progress. And then I think about that and I'm like, well, you know, I could just prompt my whole newsletter and I bet it would be 70%.

1:13:35I will tell you as an aside and then we have to wrap. So I'm doing these sub stacks for launch now. We have a this week in VC one. We have this week in startups and this week in AI. 100 % human written. I write every single word. I don't let AI do any writing for me. But I do have GrokBots helping me out at every step of preparing those newsletters. And I am able to, I'm so much more. I would never have been able to churn out three well-researched, fairly lengthy sub-stack posts in a day five years ago. But I can do it today. Help people out, Lon. What is GrokBot doing for you? Is it clicking the buttons to publish them?

1:14:16Is it doing research for you, pulling facts? It's that one. So I'll give you a great example. in the This Week in AI newsletter, thisweekina.ai, if you want to check it out for yourself, we do a demo or a model comparison or a tutorial every day. Like, what is like a hot piece of content about AI that's hands-on and practical that we can share every day? The old workflow would have been me loading up X and literally scrolling my for you, looking for like, what are people talking about today? Let me spend 15, 20 minutes just getting a good sense or that and then go to YouTube and spend another 10 minutes scrolling over there.

1:14:57What are the, oh, Sonnet 5.5 demos are the thing today. Now I have the XAPI tied into a GrokBot and I just tell the GrokBot. I already have this process figured out because I do it every day. So I just come in in the morning and it doesn't even need to be prompted. It just tells me here are the big trending demos. Here are the big trending model walkthroughs. And it doesn't even just pull the links. It actually summarizes for me. So it's like, Lon's Sonic 5.5 demos are super hot today. I found three times as many of those as everything. It's doing a research report for me. And then I can go through that.

1:15:31I can be like, what part of the transcript of this YouTube video does this come from? And it'll give me the time codes. I can take that. I can give that to my clip bot. And I can say, make a video of this video between this and this time code. And it just makes it. So all the ticky tack stuff is done. and I just get to focus on the actual right. No, I think it's a brilliant example. And I'll leave everyone with one more AI hack while we're sitting here. Have you ever run into a very annoying paywall because you don't subscribe to that particular website? Well, go to your favorite friendly chat GPT or Grok agent and say, hey, can you find me a gift link of this article link?

1:16:09It will go on to X and find you one. Perfectly legal, ethical, and a great way to avoid the paywall. I'll give you one other producing tip with GrokBot. It's really good at surfacing people's contact info. So if you don't want to pay for like a service, you know, there are those services where you pay them 20 bucks a month. And if you're like a salesman, it'll help you find anybody's email address. Or just ask GrokBot and it'll get really good at it. And now I could just if there's somebody we want to book, I can say, find me some contact information. But it won't even just it'll like figure out their assistant's name and look up their contact information.

1:16:50It'll figure out their press contact's name and find them on X or LinkedIn. Like it'll go three levels deep and spend an hour like what would have took taking me an hour of research. And I can zero in on that person. And I'll tell you, we're very excited. she's going to be coming up on one of the shows. Dr. Fei-Fei Lee of World Labs. I've been trying to get her booked on a Jason Calacanis podcast for many, many months. With the help of GrokBot, I was able to find an email address I hadn't found before and got right through. Surely you mean AMD's Fei-Fei. I do. World Labs, a division of AMD, exactly.

1:17:28Yeah, yeah, yeah. She's the World Labs CEO, an AMD company. Chief Scientist of AMD is her new title, actually, I believe. If you don't know what we're talking about, her startup was sold to AMD in an$8.2 billion all-stock deal. I'm sure it was on the show. It was. But that's what we're joking about. All right. I think that does it. I think we've talked more than enough about Brian Chesky. We enjoyed getting together and hanging out, chewing the fat a little bit. So thank you to Alex Wilhub for being here. I am Lon Harris. Check out our Substacks, please. TWISTartups.substack.com. Go take a look.

1:18:00Give it a read. Give us a subscribe. and we will see you next time on This Week in Startups.