Medium: Reaching Profitability while The Internet is Broken + CorePod | E2003

29:04And they were just so offended by how it had gone down that they said no to that amount of money, which was like a double digit increase and double digit percentage increase in the payments they would have gotten. The real number, by the way, from OpenAI was about 1 million. That was the opener. But by that time, I knew that our community was just too angry. It's like, what am I going to do? Negotiate a million up to 2 million? I don't care. We just walked away. If you use multiple devices and apps to run your business, you need OpenPhone. OpenPhone simplifies your communications with one simple app.

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30:13We do a little round robin where different people can pick up the one phone number. So customers have one number, but we can have that phone call go to multiple people on the team. So we can just have somebody pick up the phone quicker. It's that simple. Answering the phone quickly is a best practice and it makes people love your product or service. Open Phone is already super affordable at just$13 a month. My Lord, that's affordable. But Twist listeners can get an extra 20 % off for any plan. The first six months, that's incredibly generous. Just head over to openphone.com slash twist. And what if you have an existing number with another service that you hate?

30:48Well, Open Phone will port them over at no extra cost. Easy peasy lemon squeezy. So head over to openphone.com slash twist and get a free trial and get 20 % off. So Tony, I just want to make sure that I'm tracking this correctly. So currently Medium has more than a million subscribers and we'll get to that in a second. Very basic math, about five bucks a month to be a Medium subscriber. I think I got four bucks because there's a discount going on. Thank you. That's five million a month. So OpenAI was offering 20 % of one month's recurring revenue for access to all of your data per year to ingest it and use it to make more money.

31:27What were they thinking? Did they think you were stupid? I mean, from Reddit's perspective, it's free money, right? They got 60 million. They got less, let's be honest. They got money and services. So the headline of that announcement was wrong. The headline was they got$60 million, probably let's say$30 million on a company that's making $700 million. But it's just free money. At that point, that's all profit, right? I think if we were pocketing it, like, look, if I had an extra million dollars in my budget, like I know what to do with it. Right. Like I wouldn't say no to it. It just because of how we're set up, I needed the community needs to go along with it.

32:06And I agree with them. It's like it was offensive. And so if just if we're talking about the industry, this is what I predicted when we blocked open AI. I predicted that they were creating a competitive situation where the platforms would end up locking them out from future training data. And that's exactly what happened. Because if you look at how Google has approached this, Gemini does give credit. Huh? Right? Yeah. Right? But for us, we want serious readers. Actually, like the people that just want the answer that Gemini got, that's not a future subscriber for Medium. Right? The person that wants to read the whole thing, I'd actually probably save us server costs if Google could filter out the search traffic to just people that wanted to read to the end.

32:51But they launched with that. They launched with a consent and they have been willing to pay. They haven't paid us, but I think that's on the table. And so from our perspective, knowing how our community feels, knowing how open AI behaved out of the gate, I think it's incredibly likely that we would do an exclusive deal with Google. And I've seen other people start doing that. And so the future of AI training, essentially, open AI just ends up getting locked out because they behaved so poorly in the beginning. do you think that was i know we're doing kind of corporate psychoanalysis here but just does that just was it arrogance or was it just them not valuing the written word as much as you and i do i'm trying to figure out there's bad intent here or not uh it's cultural uh cultural arrogance i mean it's blitz scaling right it's like you see the playbook and and they're running they were running a blitz scaling playbook right it's the you know they're kind of the real damage is being done to the creators of the internet meanwhile they're at congress saying hey you got to regulate us because our stuff is so powerful it could become be careful but that was like i'll just say i thought that was the naked marketing stunt right like what if i went in congress and said listen you guys need to take a hard look at medium because if you don't we're going to help people get so smart you know i don't know like what it's just please right um pipe down with your digital Jesus.

34:23We're doing fine. Yeah. So open AI doesn't offer you much. Google seems to be an attractive possibility. Have you guys actually picked or signed an AI deal? And then if so, is it going to be exclusive or is that still a negotiating point? I expect that we'll at least get into that conversation, but I'm not far enough along to know how it'll go. I'm just saying like, as I watch this develop and as I talk to my peers, that's where it looks like it's heading to me. Yeah. And then doesn't that create a world though, in which like the, okay, going back, we've seen a lot of AI models improving quality lately putting aside the whole ai training data issue it seems that there's four or five models today that are gpt4 equivalent or better that's because i think they've mostly had access to the same data but it seems that in the future you're describing we are going to see certain models have access to different underlying data sets that will then yield different levels of quality so to me if you picked one let's just say you picked anthropic to throw a name out and not google and not open ai and so forth doesn't that eventually make you more valuable on the market because they want to have similar access.

35:26So then exclusivity seems to be very expensive from medium because then it precludes other agreements, at least as long as that term is in place. I just think, I mean, we have to make a business decision in partnership with the community, but I just think it's bad for the internet, right? And like the dominoes were put in place by other people and that's, you know, here's how it's falling right now. What I had tried to do was get a cohort together of peers. And what happened instead is basically everyone else preferred to negotiate on their own. And I think you're starting to see people that I talked to make their announcements.

36:03Like it tried to get it, you know, read it in. No. And you saw that it's because they thought if they could do this, what looked like me, if they could do their own exclusive deal, it would help their IPO. Right. And it did. That's true, but it's short-sighted in my view. Right. I think bad for the internet. And Stack Overflow has their own AI model, right? So they are opting out for their own business reason there. Wikipedia has different concerns than me. They, I think, probably feel like they have to participate. Otherwise, AIs will be less smart. And they have not a financial goal driving their story.

36:39A humanitarian goal, if you will. Right. You know, we couldn't get a cohort together and say, we just need to make an industry standard here and we need to um you know negotiate as a group there might i think there's probably some legal logistical fears about antitrust in there too about us uh working as a one cohort but i just like i think we could have solved them i think that would have been better for the internet you know i do like i think in these training datas medium is like the 40th biggest training set so we don't have any leverage all we had is sort of like quitspa and like early desire to speak on it.

37:17I think as you grow and as the medium model that we discussed at the top of the show continues to turn and drives value and grows and so forth, then I think you'll become increasingly valuable and you should have more leverage down the road, which will allow you to do the thing that I care about the most, which is drive more monetary value to both art and the written word in more particular. Cause I think that's, that's such a critical and important thing. Now business, we have a couple of things and I, I'm very excited about this. So first of all, you crossed the million subscriber milestone a couple months back.

37:47This is a rude question, but we're here. So let's do it. You haven't slipped back underneath the million subscriber above. Okay. And how has growth been since then? The economy has been a little iffy. Media has been a little wonky, but it's also an election year. So I'm kind of curious how that all adjusts out for mediums. Yeah. I mean, we're good. I think we probably won't make an, another announcement. So we hit, a milestone that feels like announcing, you know? And so we're like right now, I guess at some level, we care where we rank in the media subscriptions of the world. And New York times is tops above 10 million and, and probably in the top five, top seven there.

38:30And yeah, so I'm dodging your question. That's what I said, what I'm getting at. You're, you're, you're dodging it gently. So I'm going to, I'm going to push on it and then you can dodge one more time in your post announcing the million subscriber milestone. and you talked about how like, should we even make a fuss about it? It's just a number, blah, blah, blah. But then you said people internally were tracking it and it was a good, I think it's good to have goals. I don't think goals have to be anything other than arbitrary. But I mean, like, so when you hit, is it 2 million that you'll talk about it again?

38:57Or is it like 1.5? This is debatable. But I want to say that about the goals is actually interesting. You know, having worked in startups for a long time, there's this pendulum swing between people that are mission driven and people that are pretty mercenary. And it was just this great moment for this team, which tends to be fairly mission-driven. Yeah. To be given a mercenary goal. I mean, it was essentially like I had two mandates when I took over as CEO of Medium two years ago. Make it profitable and make the quality something that's not embarrassing to the founder. Those two things. So first mandate is incredibly practical.

39:32And we did both now. Also, the quality has changed drastically. But it's like every day we're talking about how do we make money? a bunch of mission driven people and so i think um maybe we were like resisting celebrating a financial milestone that's not in our our nature but then when it actually hit everyone just felt in their bodies how hard it had been to get there right yeah like i was on a plane coming out uh for meetings and from flying from new york to san francisco and i'm like so grateful that the person next to me was napping because I was like getting all emotional when it hit and I you know I thought I was going to be working on something completely different and that post that announcement post is literally written on a whim on that plane as a reaction to how I felt and to how the whole company felt like like this is what I like about startups is they might not pay as much as a corporate job but it gives you a job that you can care about right and uh there was it was like legit a good moment for us.

40:39Well, it made me very encouraged. So I know that I'm not a medium employee shareholder. I'm a user now subscriber. But when you guys hit that milestone, to me, it was a signal from the market that even in today's digital era, there are a million people who are willing to pay five bucks a month, or you have a higher paid tier as well for people who want to be more involved. Spotify, take note. Thank you. And that meant that my team, my people, The people that I would love to be friends with and sit down with and have coffee with were myriad. And it wasn't just me and six other people who are big writing and reading tweets.

41:15There's a lot of us. And to me, it was also an emotional moment in a different way and different level. But I absolutely hear you on that. But you did mention the P. Oh, Tony, please. Well, it's a proof point. I think that's a different P than you were about to say. But it's a proof point. If I come on here saying the internet's broken because of ads, well, who cares unless there's an alternative, right? And so we want to demonstrate like other business models are feasible. And we don't think Medium is limited to a million subscribers because as you say, if it works in English, it'll work in other languages too.

41:49That's an easy way to explain that there are multiples of a million subscribers out in the world. That's a venture scale business. That's not just a healthy lifestyle business. That's possible to do a venture scale business that's not based on ads. And so, yeah, I think it's really important to put that proof point out for other entrepreneurs that are thinking, I don't want to participate in a broken system. On the venture scale point, I'll just pull in some data for folks who are curious. According to Crunchbase, Medium has raised date$163 million. Notable investors include Greylock, Andreessen Horowitz, Spark Capital, and Obvious Ventures, which, of course, is affiliated with the lovely Ed Williams.

42:27So if you're curious what we're talking about here, this is not just between two bald nerds instead of firms. um this is a very i can't see how bald we are oh no this is going on people are watching on youtube like this is going to be on yeah so it's i took my hat off so we could match our hairlines yeah uh but the profit point i want to get back to that because this is to me the the follow-up the corollary to reaching a million subscribers and the fact that you said back in may on threads that quote medium was month over month cash balance positive but now you're saying that the company is actually profitable.

43:02So is that the same milestone or is there a distinction between the two accomplishments? This ended up being a funny milestone to get the company to celebrate because in order to celebrate it, you have to understand accounting. Are we doing cash flow accounting or are we doing accrual? And if you've run a business, you know that it makes more cents to do accrual, which means like if I sell an annual subscription, I don't book, I don't say, oh, I made$50 this month. I say I made, because I have to do a service, you know, for the next 12 months. So I made, you know, one 12th of it and then one 12th the next month and one 12th next month.

43:41And same with a lot of the bills, you just end up kind of spreading them over the year ends up being a more rational way to look at a business, but it's not how any of us handle our checking account we do cash flow like do i have money to pay the bill or not right it's just two different views two um very valid ways to do accounting and and like we do both because we don't want to run out of money which is a cash flow question and yeah we literally did have that month in may first time ever in the history of medium where the bank account went up without investor money coming in right and it probably like without literally a check from ev who participated in every round who's our founder and founder of twitter and founder blogger who participated in every round right that's a i mean that is a milestone but the more the more standard milestone is the accrual accounting that's a standard way of doing accounting and so we are in august projecting and this is not a controversial projection like we're on track to be in our first ever profitable month i feel good about it yes thank you for the you should feel good about it Also, it's funny because we were talking earlier about being counter-narrative, focusing on subscriptions, not ads, and quality overreach and kind of contra-AI in some ways.

44:58But I think getting profitable as a venture-backed tech company in 2024 actually isn't super controversial. It's actually relatively popular as a way just to kind of defend the existence of your company. So here, in a nice way, you're actually kind of on track with some themes we're seeing in the market. But I'm curious what it does to your mindset as the CEO. because in my notes here, I literally wrote a question that just says, is medium eternal now? Because to me, once you're cashflow positive, and then once you're profitable on an accrual basis, do you use your birth? The business has reached a level of stability that almost unlocks freedom to experiment.

45:33And so I'm just curious, you know, like now when you're sitting back having a scotch or a soda or whatever it is, and you're thinking about what the next six, 12, 18 months are like, do you have more? I don't know, like, like chutzpah pizzazz, because the company is now like stable yeah it's it's um i wish i could talk about this more actually it's like we did you know my job is essentially two turnarounds and i did the first turnaround so i could do the second one right the first turnaround is like what you picture a mercenary ceo like come in find the cost to cut find a way to grow etc etc but i was given this extra rope to do it with some bigger future in mind.

46:17So like if private equity had taken medium over, they would have cut the team in half. They would have clustered ads everywhere and it would have been profitable sooner, but it would have had no future. Right. And so I tried to do this turnaround, which I guess I think we can say now that we're profitable, bid, check, done to set medium up to be much bigger. So like my North Star is not a million subscribers or even 10 million subscribers. That's the business goal. My North Star is the impact that collecting every person's story on the planet. What's the impact of that on knowledge, right? To me, that was the original promise of blogging is to pull out people's stories.

46:58And because that's where knowledge and wisdom is hiding and you normally never have access to it. So if we can collect that into call it like one great library of of human stories you can have the same level of impact on knowledge that wikipedia has on facts right i feel like wisdom is the better word there versus because knowledge to me implies facts they're almost synonymous harmonious but wisdom is the application of facts to life and that that this is why we're not particularly threatened by ai you know like so much of living is requires the human wisdom right how to make coffee sure that's a set of facts right but if you actually love coffee like you talk to a coffee aficionado there's all of this extra information and all this why behind it and uh uh i look i love that right i love that and especially i love how good writing is how good the written word is for collecting someone's thoughts and sharing it out to other people we're in hard-filled agreement about where you guys are going and i'm very excited about it but you know you said 10 million is not the kind of north star gold but like i'm just thinking about what you could do with 10x the revenue in terms of more people more experts more wisdom so to me like the the result does scale with financial wherewithal.

48:26And I just don't want to dismiss that because I think that writers, broadly, people who do creative stuff, often, back to your company's point about profitability being a milestone to celebrate or not, dismiss the blood of it, which is just money. You know? And so I almost want to say, dude, Northstar, that 10 million metric, go crush it, and then come back on Twist and tell me about how you did it. Because medium 10x would be awesome. I want to come back sooner than that. Like, how long did it take the New York Times to get the$10 million? But maybe we can do it. I said at the top of the show that you are a man of the moment.

48:56Ergo, go forth and do the things, you know, quickly, in a moment. You're getting at something that I wish people understood more, like the sort of the archetypes of how to build and run a company. I think a lot of the ones that we've seen recently are based on a lot of venture capital being available, right? The sort of the zero interest rate phenomenon. I think every CEO is visionary at some level, but some would rather sell that vision to you and others would rather prove it to you. And when there's a lot of money, you get a lot of salespeople running the show, right? And they tell a big picture and it's filled with hyperbole.

49:33And when there's not a lot of money, you get a lot of practical operators like me who, I mean, obviously this turnaround is like a victory for practical operations. And so we're just in this moment where being good at the details is a big part of being successful as a business right now. And that's a lot of the medium turnaround is, as you say, go out and make money because if we make money, then we have more fuel to do the things that we want to do. Absolutely. And if you want to think about the connection between money being available and salesmanship, and then cross that with our earlier points about, you know, open AI going to Congress and demanding regulatory capture, what did they have behind them?

50:14Well, it was essentially unlimited money. And I think that there's a pretty direct link between that and what we just talked about. And I think it's good that the AI hype has slowed a little bit so that we can get past the salesmanship and more to the practical elements of building real companies and a little bit less on, I don't know how, if I read one more time that every industry will be revolutionized by open by AI, I'm just going to scream and then vomit into a hat. Tell me how exactly. Okay. This is, this is off topic, but let's just do this because we're here. So day-to-day, your workflow, CEO of Medium, how much AI are you, Tony, personally using?

50:52I don't touch any AI in a given week. I go back and occasionally test a certain summarization tool. That's the one that has my wheels spinning. The first wave of AI is too much hype for me. The second wave is going to start having product people that start putting more interesting ideas out there. And one that I've been sitting on is more hybrid product, right? So like what always has my wheels turning is not can AI summarize medium for people in a useful way? It's more can AI create the first draft of, let's say, a topic summary? And can that be then expanded and corrected by humans? And so I'm always testing summarization tools because I'm curious about them.

51:37I guess now just being a Google user, like doing a Google search, you'll get, you know, you'll get their summaries. And so I see it that way. But like, I think the people that think AI is going to like revolutionize writing kind of don't actually understand what writing is. Writing is thinking. Writing is thinking. and every time I've like tried to introduce an AI into my own thought process holy it's such a bad experience right all AI writing tastes like chicken it's always like oh great question here's four bullet points about why this is a thing and I'm like I mean if this was an eighth grade essay I'd fail you because you poured the tears out of me so quickly and this is why I'm personally not afraid of being replaced by by AI right now 10 years from now we'll see where the technology goes, but I agree with you.

52:25The summary tool should be cool. I don't use that either. I also don't use AI day to day. I have chat GPT on my Mac and I occasionally will pull it up and ask it something for the sake of staying relevant. And I played with the new grok image thingy, but it's all experimentation and tinkering versus this is a key plank in what I do. And I'm just kind of waiting for that to change. But until it does, to me, we're still in the first cycle of AI and we're not in the second one yet. Well, my board right now is filled with people that have super early stage companies. All four of them just started something at the same time.

53:01And two of them are interesting takes on what is now possible because of AI. Now I'm a little bit more sensitive to what's happening, but it's not replace human creativity. It's something completely different. They took this in very different directions. So I think we're going to get good use cases but uh what we're seeing right now is just not explaining it in any anywhere close to where it's going to end up i agree i want to if people are listening to this and they're saying oh my gosh here are these two writer guys who think ai is bad to the contrary like one thing that i'm most excited about is the is the the intersection point of increasingly uh low cost and high quality humanoid robots and llms as a way to chain instructions together to do stuff like that i've literally sat up and i'm thinking about how cool that's going to be so when it comes to ai huge fan it's just in my workflow and also in my first love which is writing it hasn't yet crept into my my flow but at the same time i do have friends that use it uh you know day in day out i'm just i don't know i'm not ready to get ready yet to export part of my brain to someone else or something else i just because to me then why am i here yeah i mean this is a little controversial is maybe not the official medium talking point but i sometimes wonder if some people we're hearing from don't like themselves like in terms of like the people who are raving about ai don't like them some of them right like they wish they were something different not just someone different but something different and like there's something about being a human that they are rejecting and i mean i don't know maybe they're gonna end up being right but my impulse This is the thing.

54:37We'd all be better off. You know, this is coaching and therapy coming out here, but we'd all be the faster path would be to find some way to accept and embrace who we are. I have so much to say about that, but I'm not going to get into it because we would stay here for another half an hour. I want to bring up one more point about Medium and its future, because when I was just pulling my notes together for this, it struck me that there is two things that Medium pays for, essentially. One is new stuff from great folks, the practitioners, the experts talked about earlier. But then it also builds a catalog over time that gets larger and therefore more valuable.

55:17And it probably cures or ages well in some way. So is there going to come a tipping point in the medium model in which the back catalog of words is taking up the majority of the available revenue bucket? And could that contrast or conflict with having enough money in the medium pool, if you will, to keep incentivizing increased creation? Like, is there a historical weight that eventually tips the scales in a weird way and makes the medium model a little bit wonkier than it is today? It's interesting to have it framed that way. Because if I could just put that aside, I would love to get into innovative ways to organize, right?

55:56Like, we've seen blogging platforms before. We've seen publishing platforms, right? like Tumblr, Twitter, threads, right? Like all very TikTok, even very similar models. But none of them really took the organizational layer seriously. I mean, we have tags, but you could go so much further than that. And yeah, I think that's a huge opportunity to do that. I don't think, you know, at that point, I don't think there's pressure for all the money to flow that direction because at that point it's already written. And also the people that tend to write evergreen content are people that I think they care about the visibility more than they care about the money.

56:38But no, I don't think it's going to disrupt our business model to answer your question directly. But yes, super hyped for, you know, talk about things we can do in the future now that we're profitable. Like, sure, medium and other languages, absolutely. If it works in English, it's going to work in every single language. But that's a thing that we've never seen on these UGC platforms is a real librarian sense of, like, I'm looking for this topic and the answer is published. The best thing on it was published 17 years ago. And here it is. Yeah. And then here are the four things that have come out since that change.

57:12You almost need to have. Well, I wonder if your curators become essentially librarians in time. And then maybe we do a decimal system medium. That. 100%. this is what i came in to medium thinking about like me i was a publisher on medium and me and all my publisher friends were all thinking about our back catalogs and how to turn them into encyclopedias for my very first day on the job i reached out to the wikipedia guy no person wikipedia person who um uh manages our page they happen to live in san francisco and that's cheating i was in san francisco so i made it work and took them out to coffee so like all of the things i'm doing to take over this company i was like i want to be your friend i want to you know like have your input um and now they work as one of our curators um and they i think have been curator of the year uh at wikipedia so like i just 100 that impulse is there and people don't understand how active the curation impulse is on Medium.

58:15Like, I think there's something like 3 ,000 community publications and something like 9 ,000 active editors who are working with authors, you know? So it's like you would tend to think of Medium as individual people's blogs, but it actually works a lot more like Reddit and subreddits in that way, where that curation part of the community is a million times more active than people outside of Medium understand. so and i you know far be it for me to be your um wildcat product guy but you know reddit is a place we'll do it you won't no no no no no no no i are i'm having a second baby and i have too much work already but you know it strikes me that you already have the curators you already have the writers you already have the readers you have the subscribers and they're already on the platform interacting writing working together and having this this vision why not and throw up some uh forums and um do a different form of ugc inside of the medium world and um pick reddit's ass okay great that's that's interesting man why not more and easier community definitely on the road okay because you guys are the anti-social media in some way like it's you're you're the opposite of an endless scroll or a a short form video because it's words you have to read them and here's a lot of them and that must have a different core audience than than tech talk for sure being the the other end of the medium spectrum but reddit's somewhere in the middle and they're doing quite well and you should go take all their money i'm actually like a big a big fan of reddit's potential like i would put money into it in a if i was i don't i do mutual funds but if i had individual uh uh stocks to pick i would pick them i think their long-term potential is great.

1:00:01People outside of social media, I'm not picking on you here because I think you're discloding this as an idea. I think they really underestimate how the format defines everything. It's even something like, it's hard to port a newsletter to a blog. The voice is different. It's jarring to read a newsletter inside of your blog feed. It just is weird, right? And those are things that are the same length, often very similar goals, right? And we've played with short form. And it's like short form and medium form are weird together. We bought a book company and we're like days away from letting you read books inside a medium.

1:00:46And then we didn't like it. And we put that whole project to rest, right? So this like, I think there's a, I have a ton of respect for Reddit. I think it's amazing that it exists on the internet. such an important resource i just think there's room for like we're always we're so different um in ways that are subtle that uh it'll like no we're not gonna compete with it we're gonna be friends with it well i mean so much for the uh eventually becoming the mercenary ceo does that mean as well though that on the book point that a serialized fiction wouldn't sit well inside the medium model because it would be a series of pieces of content that were directly linked in a sequential format versus discrete articles around one topic pillar yeah it it ends up feeling weird there's just something about the like it's jarring to switch switch modes of reading uh serialized posts that never done well um on medium because because because there's a world in which medium has cracked this code of collectivized payments on top of UGC for one type of written word.

1:02:01And then I see platforms like Royal Road that have cracked a different content side of things, but not the monetization element of it. And I just want to stick them all underneath your umbrella so the money can flow out. But it sounds like the way to profitability and the way to growth is by not doing everything and not trying to compete with both Reddit, royal road and everyone else to me one of the biggest things that changed since when i got started in startups in like 2005 the internet's so much bigger right like you can have a massive company inside of a tiny niche right it's like grammarly is a huge company maybe it's affected by ai but still it's like this is spell check right and it's like that's a huge company on its own right and uh so i just like it does the thing that i often tell other entrepreneurs like niches get huge now because they can be so big and medium isn't even a niche, you know, blogging only, but, you know, with aspiration of every language for every person in the world across every topic, that's, you know, that's already pretty broad.

1:03:03Yeah. We don't then have to do short form and long form on top of that. So last thing is just on, on, on mediums, continued independent, because you mentioned private equity earlier, and I was going to bring this up anyways, but I think that's the greatest example of what I'm afraid of. Because you guys are now something that if someone purchases, there's a clear way to wring cash out of it, which means that you are now a target for a different form of potential buyout, aka private equity. Which to be clear, as a fan of your company and your work, I really hope doesn't happen. So how happy is - This is one of the first questions I got, by the way, is that someone was like, they just hired this guy to clean the company up to sell it.

1:03:41And I was like, Like, have you seen my resume? I'm the least qualified person to do that, right? Let's go through it. Better Humans was a medium publication. And Coach.me is not a private equity firm, you idiots. Right. But I mean, especially like my qualification was knowing a ton about medium, but I've never sold a company, right? And so you don't pick me to be the CEO if the goal is to flip it, right? Worst possible person. And we would have flipped it a year ago, right? if we were trying to flip it and we would have taken a totally different approach so you picked me to take a swing and you know this is the controlling investor is someone that takes big swings the controlling investor is still evan williams and he's like his career is defined by trying to do something like by the big wins not yeah not the little ones you don't you don't make a billion dollars by collecting quarters you just don't you know okay and so it sounds like that ev is happy with things and so that means he is because you wouldn't talk smack if he was mad at you i don't think that would be a weird dynamic but i don't need to be worried about medium normally people come on and i harass them like when are you going public blah blah blah but i just want you guys to be okay you know because we're okay okay we're okay now i mean Look, Medium was failing when I took over, but I think I understood how to execute Ev's vision.

1:05:10That way we're complimentary. He saw something in the value of a subscription that I never would have seen. But as soon as he told me what he saw, I understood immediately how to execute it. And so I've gotten this opportunity. does it just perfectly match my skills to try to execute his vision. And then over time, more of my vision comes. But yeah, the two of us are in good shape and have a lot of respect for each other. And I think over time, we've understood where each of us has gaps, right? Like no one is the complete package. And I certainly am not. Yeah, there's no full stack developer for life, if you will.

1:05:54No. All right, well, Tony, I gotta let you go. So as always, an absolute treat. We'll have you back on before you reach 10 million subscribers. I'll make that commitment. Great. Thank you, Alex. We will ring one more financial data point out of you the next time you come on. So think about that in advance. But congrats on the profitability and surpassing the million subscriber milestone and putting Medium back on the right track. I'm Alex. This is This Week in Startups. Of course, we are on every podcast platform. We're on YouTube. Hit subscribe. Hit the little bell thingy I'm supposed to say.

1:06:20And we adore you all. We'll see you later. Bye. Bye. All right, everybody. we're going to do another jam with jcal session right now this is where i talk to founders about their company about their startup their product their customers their team and uh we jam out they tell me they show me what they're doing they tell me their challenges i give them some advice based on yeah i've been invested in 400 companies and done 2 000 episodes visiting startups uh this is brought to you by our friends at dot tech domain names if you don't have a dot tech what are you doing i mean there's so many great dot tech domains available in that namespace grab one now and today i'm talking to the founder of core pod which you can check out at c-o-r-p-o-d dot t-e-c-h welcome to the pod ulandek ulandek did i pronounce your name correctly you could call me ulang like ulama but and at the end okay yeah ulan how you doing uh why don't you show me your product tell me about it and then uh tell me what your biggest challenge is since people are listening you want to describe what they're going to see on screen corport your personal sleep companion we all have our smartphones nearby for me is a great tool to connect to my family and friends and keep up to date with all the latest news but also is a huge source of anxiety and distraction.

1:07:43I always get messages, notifications, I do scrolling at night and I have insomnia. I wish I had a digital companion I can talk to, I can voice my feelings and help me decompress before I go to sleep at night. Something like this. Hi Milo! Whoop! Whoop! Hi there! How can I help you today? What's been bugging you lately? I'm having some trouble sleeping. I just can't seem to fall asleep at night. Takes me more than two hours to fall asleep.

1:08:28Oh no, sorry to hear that. That sounds really frustrating. Can you tell me more about... You remember Beacon, the dog at the Olympics that helped US athletes with their mental health problems? so it's a kind of Gen AI dog right inside your speaker. We've talked to many therapists about mobile apps and they say the mobile app solution it doesn't work it should be a completely separate device and we've made it as one speaker powered by Gen AI and you can talk to it like if it was your friend. Now let's talk about value it may seem quite expensive at first glance but it's actually a bargain. One month is cheaper than one single hour of therapy session with a human expert.

1:09:18We can reach 10 million with just 17 000 customers with about 200 million with 170 000 users. Who are these users? People with high pressure jobs, medium to high income and ready to invest and their mental health our team is passionate about building this product and we also have advisors we've made five prototypes recently i finished founder university cohort eight and last year i attended to team draper's hero training program we got funding from a high technology park of kyrgyz republic and european bank for reconstruction development and now we are rising we want to connect to smart watches like garmin to fetch all the health data build product ready product and start pre-orders and okay this is my context what is your biggest challenge what are you what's your challenge with this speaker with the screen that has an avatar or a virtual dog who is going to help you sleep better.

1:10:28What is the big challenge with CorePod? You know, J. Cal, we are B2C, and also it's very hard to build B2C, and also we are hardware. It's even two times harder to build this kind of software. So my question is, what is the best go-to-market strategy for this sort of product? and especially that given the fact that we are related to mental health okay so you're in the tinkering phase you're building some hardware you're building some software and your idea is you want people to sleep better interestingly i have two investments in this space last night i hit an 85 on my sleep score with my eight sleep they're on their fourth generation and they study your sleep your REM your deep sleep all of these issues and it's quite nice and it really has helped me you know sort of get into a better pattern and I uh we're we were investors in calm.com and I use sleep stories with myself and my daughters to help go to bed and so those two things have become good investments for us great investments in fact and they do tackle sleep other people like whoop watch does it so you are not only doing hardware and software and doing a startup you're also going up against a pretty competitive set so this is not going to be easy and doing hardware as the eight sleep team will tell you or the cafe x team will tell you really really increases the degree of difficulty you have to be able to finance all of uh you know this hardware so i think what you have to do is maybe step back and ask yourself are you making a virtual companion in a speaker format that's different than you know say um an app because you don't have to take your phone out and you have all the other distractions there and is that the innovation here or do you want to from first principle say i want to help people get to bed at night and this is the best way to do it and i think that's what you have to ask yourself because clearly you're creative and you have technical ability and you've tried these different things but which is it are you are you passionate about hardware and creating this companion or are you passionate about sleep which one uh no i i would say that the core product is the software so it's personalized uh like your friend which knows you and he knows how to help you sleep better and the hardware is just the way you interact with this software you would think that you can use ai to be a sleep coach and that that sleep coach requires hardware i wonder if your sleep coach requires the hardware i would see if you could build a sleep coach with your iphone that actually uh you know lets you put your iphone face down and interacts with you and put you to sleep right so i think a better model might be hey eliminate the hardware business for now you can always do that later but see if you can make this first part which is an interactive companion who i talked to and they put me to sleep which is kind of like your dad or your mom telling you a story at night putting you to bed and tucking you in i kind of feel like maybe now that i've heard you respond to my question that you believe the interactive ai assistant is kind of like a sleep coach or a parent tucking you in am i correct yeah yeah exactly so i think you want to first prove that that actually works and you could do that through an app you could get 100 beta users and just see if the interactive model actually puts people to sleep better than listening to a sleep story on com because that's your competition for 50 bucks a year or uh if it puts you to sleep uh better than say listening to an audio book or putting on a sound machine i think what you're up against is um not the therapist who charges 500 dollars i had that was in the presentation like i think um like um that didn't ring true to me i think what you're up against is the sleep stories on calm and calm is up against you know free sleep stories and sleep meditations on youtube so they have to be that much better the packaging you know and the uh tracking and and all that and then and the beautiful interface they have to be better than the free stuff and then eight sleeps got to be better than just using a sleep story to go to bed and they're going to quantify itself so you're gonna have to find that market in there and i think prove that first piece and then hardware is so difficult um but you seem good at it so i would just wait on the hardware i would just make that first piece work um and how close to you are you to proving that out how many nights how many users have been put to sleep by your interactive person yeah we have waiting list and up to 14 000 users okay so nobody has been put to sleep by this yet except for you yeah okay so you know there's some demand because you got the wait list what i would do is i would get 10 people you know and i would look for people in the subreddit on reddit for insomnia so there's a reddit for insomnia and i would go to the insomnia one say i'm a software developer i'm trying to build software to help people fall asleep and i i think you can do it with an interactive person and i'm looking for a couple of test users here's what i think is going to work what do y 'all think would anybody want to try this dm me and see what happens if they allow you to post that and if not you post it on hacker news or other places or in a reply well you could put it on craigslist and just on craigslist say hey if you have insomnia you're reading this at 1 a.m i'm building some software i'm paying people a ten dollar gift card to try it for three nights if you do it as a thank you and fill out a survey and tell me what you like and don't like about the software and i would get to you know let's say a hundred people trying it and filling out the survey and see what you learn because right now it feels like you're building building building something very complex without answering a first principle question can a language model um put somebody to bed like mom and dad did when they tucked them in and read them a story yeah actually it's all based on the research i don't know if that works but some research the proof that llms even text-based can really help in this regard great so now take what you learned in that study take what you know about you know hardware and tinkering and just prove it to the investment community and prove it to yourself and see what you learn maybe it turns out you know asking you know but three questions of the user puts them to bed maybe some people want to have you know a back and forth 20 times until they fall asleep who knows what the language model will come up with the technique but i think you got to get closer to the customer and do a little more testing before you spend a bunch of money and raise a bunch of money i don't think you're going to successfully raise money with a hardware company in 2024 going after this because it's very competitive and hardware is really hard but i think you could get into an accelerator or get some seed investors if you did a small 100 person study yourself and then had that information and you could literally record it you know you could have all the interactions from the language model and from your little url you don't even have to send them to build a full app or the hardware to test this out you just send them to a url with a little script they open the web browser browser talk to it and see what happens so i wish you great luck with it and thank you it's a really great idea and clearly you're passionate about it so good luck yeah thank you jaycal awesome thank you all right everybody if you want to jam with jaycal you can do that we got one more slot left it's brought to you by our friends at dot tech what a great partner everybody's using dot tech including me go to jam with jaycal dot tech to learn more and apply we've seen so many creative ideas and i want to hear about your idea go to jam with jaycal dot tech you just have to have a dot tech domain name.

1:18:37And there's a lot of great names left in that domain space. So get in there now. Maybe you want to buy a couple of them. So you have a couple of options for your dot tech. And you have to have under 2 million in funding. We want this to be for early stage startups. Thanks to our friends at dot tech. And we will see you next time. Bye bye.