OpenAI Scoops Instacart’s CEO, AI in the Courtroom & Off-Road Startups | E2123

23:57And then the guy, I forgot the name of the stuntman in Once Upon a Time in Hollywood. Cliff Booth. Cliff Booth, thank you. There's the walking IMDb. Cliff Booth says, anybody who kills somebody with their hands accidentally goes to jail. Let's call manslaughter. Manslaughter, you didn't intend to kill somebody, but you did because of your reckless behavior. Anyway, this is crazy. And I just think the idea of, I know that trials are performative, right? There's a performative act thing to closing arguments, opening arguments. There are flourishes, right? If you watch The Insider about big tobacco, or if you watch like, you know, a trial of OJ Simpson, they actually have the videos of that.

24:39If the glove doesn't fit, you have to acquit. You can have flourishes of this stuff, but Alex, it seems profoundly unfair, dramatic, performative is the word I'm looking for. It seems too performative for me to make an avatar to try to influence the jury because that's too convincing. Am I right, Alex? What do you think? What's your... I think it's very worrisome to create an avatar, and we're going to play the clip in a second, that makes it look like the person who is deceased is leaving a message that they did not write. Why? Why is it rub you the wrong way? Take a minute to... I should also note, this was just for a judge.

25:16The jury already did their job. The man was convicted. This is just the judge deciding... For the sentencing? Yeah, the sentencing only. Okay, even for the sentencing, I mean, and a judge should be impervious to this. The judge did. He ignored the AI. The AI asked for clemency or they asked for forgiveness. Apparently, this man who died, Christopher Pelkey, his sister and his brother-in-law felt that he was a very forgiving soul. He wouldn't want the man who killed him to get the - Well, that's a whole nother spin on this. That's why I'm saying what I'm saying, because his family is deciding after he's dead what he might have wanted to say.

25:53and they're trying to then influence the judge's views, not because this is his sworn testimony or he left a note or anything. It's just, we think he'd want this. So it's third party astroturfing via AI. And this is not cool like the Tupac hologram. This to me is manipulative and ripe for abuse because you could flip it around and say, hey, he would have wanted no clemency, which could also be wrong. Right, so the judge ignored the AI avatar and gave the guy the maximum sentence. Anyway, 10.5 years for manslaughter. It was a shooting incident, by the way. So this guy, Kelke, must have cut somebody off, did something in traffic.

26:28The other guy didn't like it. He shot him. Well, whoa, whoa. Wait a second. How is that manslaughter? If you shoot at another person's vehicle, you are intentionally trying to kill them. I don't have this data. My guess would be because it was not premeditated. It was a crime of passion. Oh, so manslaughter falls into that too. Deliberate homicide. Like he didn't plan, I'm going to go kill a guy today. Maybe he shot at the car. Or maybe he didn't intend to hurt anybody and was just angry and fired. I don't know, man. Yeah, so there is like, it's a crime of passion kind of thing. Like I got caught up in the moment, but, and maybe that was the defense.

27:01I wonder if they, this seems highly intentional when you put the gun in, but maybe they're saying self-defense. So if the guy was trying to ram him and he's like, I'm trying to do self-defense, but you have other options in that case, like pulling the car over to the side of the road and stopping. Yeah. Anything but shooting somebody. Let's pause and stop talking about it and just watch this clip. Here it is. Yeah, I'm curious what you guys think. Okay, yeah, let me see this. First time I'm seeing it. I would like to make my own impact statement. So, hello everybody. Thank you so much for being here today.

27:31It means a lot. I can't tell you how humbled I am for those that spoke up for me, everyone who flew in, took off work, those who are watching this remotely, and for everyone who has supported my family and loved ones through three and a half years and two trials. I wish I could be with you all today. to your honor judge lang thank you for making yourself available to see this case to the end especially when the rescheduled trial conflicted with your i don't want to make any jokes or light of the dead right yeah obviously but did they have to use brian williams's voice for this i mean it sounds like that sound like brian williams it sounds like a i mean did am i the only person who picked up on that i i didn't notice that until you said it but now that you've said it Play it for another five seconds.

28:19I'm not joking. I'm wondering if they trained on this person's voice or used a generic one, because you would need to have video of this person to train on his voice. Correct. How did they train the AI? Did they train it to be his voice? Just play another segment of this. His sister and brother-in-law both work in the AI field. And this sort of, they, this came from them, but I don't know what tools they use. I mean, I think what you're getting at gets to my core issue with the whole thing, which is I think people just don't understand this technology well enough. A lot of people think, oh, I had AI make a statement from this dead person.

28:55They think the computer somehow magically knows, understands that guy's personality and is really going to craft something that might have genuinely come from them. And that's not not to take away from AI technology, which is amazing, but that's not what it's doing. if the person wrote a book on forgiveness right if the person had a podcast about christianity right and you trained it on that data set you might be able to say this is 60 70 of what we think their reaction would have been to this issue just like you could take this week in startups as podcast ai is doing shout out to podcast ai they'll be on tuesday to mentor our um founders here in Austin for Founder Tuesdays.

29:39So I could see like in that case, they're doing that, but play just a little bit of the voice while I talk. One of the things that's very interesting here is now that you tell me they work in AI, I don't want to be cynical here, but did they use - Loved ones through three and a half years and two trials. It really does sound like Brian Williams. To your honor, Judge Lang, thank you for making yourself available to see this case. Okay, yeah. I really, that is so accurately Brian Williams from the news. Maybe this guy just sounded a lot like Brian Williams. They would have had to have at least 30 minutes or 60 minutes of his voice on camera to train.

30:17I think that's usually what people say you need. Correct. I know when I was thinking of doing a speechify voice, like Gwyneth Paltrow does a speechify voice, and I told them I would do it. I got to follow up with somebody to make a note for me. But the speechify guys wanted to do my voice and have me read stuff. And I was going to do it as like an influencer deal because I love that product. It's really interesting. Like maybe they just needed a generic voice because they didn't have enough audio of him. I would have to train like maybe two or three hours of my voice, which you can do easily here.

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31:21Vanta automates the manual security tasks that slow you down, and that streamlines your audit. So here's your call to action. And whether you're closing your first deal or you're gearing up for growth, Vanta is going to make compliance easy for you. Join over 8 ,000 companies, simplify your compliance, and get$1 ,000 off at vanta.com slash twist. That's V-A-N-T-A dot com slash T-W-I-S-T. Producer Chris has weighed in and says that there's actually a video interview they show in this larger news clip, and this is what he sounds like. So he appears to be the vocal doppelganger of Brian Williams.

31:57Okay, fine. Here's the thing. The video adds nothing, right? This is just a script that they wrote and then had a picture of him. Did they write it? Or do you think AI to... I don't know. What was the prompt? But I believe this is a script that they had an AI perform. Got it. Because you could also say the script, make a script based on... You could. You could have asked ChatGPT, like, write a statement asking for forgiveness for... Like, you could do that. I don't think that's what they did. I bet the sister and the brother-in-law wrote this and then gave it to an AI to perform. But what does it add?

32:32Like you, he didn't write this statement. The man who died did not. No, he did not allow for this video. The video is not well done. It's so strange. And when you say the, I mean, again, back to cynicism here. Yeah. This is so off key. It's so obviously inappropriate to the three of us. Yeah. To do this, one wonders, my mind wanders, and I don't want to be cynical, that the loved ones are either incredibly misguided and nobody had the wherewithal to say, listen, this is a really bad idea. This shouldn't be the guy's legacy. I don't know if he's got family, friends, kids. Yeah. That's number one.

33:12Number two, are they taking advantage of this situation because they're AI executives to get press? And I hate to say that because— The thought did occur to me. It did occur to you too? Oh, of course. course. If they're working in AI, a big publicity grabbing stunt. I mean, we're talking about it right now. What do you think, Alex? Did your mind go there or are you too pure? My mind did not go there, but I wish that it had. I wish that I need to be 5 % more cynical, guys. To me, I was just, if you did this to me after I died and tried to speak for me using what appears to be a 25 % AI model makeover, I would come down and haunt you until I couldn't anymore.

33:49It's just abusive. It reminds me of the Jet Li thing. Did you guys hear about this? He was offered the Matrix, Jet Li, and he turned it down because he refused to pose. They wanted to make a 3D computer model of him like they do for Keanu in that movie so they could do bullet time and all that stuff. And he was like, no, I won't ever let a computer train on my moves. Those are my moves. That's my whole career is doing martial arts. I always remember that because he was so far ahead. He was thinking that in 1999. I can't let this computer learn how I do martial arts so they'll be able to do it without.

34:21The only thing that's silly about that is they could just take other videos of him now, even without the motion capture. He was 1999. He wasn't thinking there yet. But he was directionally correct. Exactly. The foresight of that, I feel like we are going to be in a future where everybody's going to have in their will, like, please don't make an AI avatar of me after I'm dead. It's like your organs. Right. I will give my organs. I will not give my soul. and my likeness away. Yeah. It's probably a good time to bring this up. In your contract, obviously you didn't read it thoroughly enough. We have the rights in perpetuity to have you do all 10 Qs and quarterly earnings even after you pass.

34:53I'm fine with that actually. Your kids get like$100 per hour residual. Let me ask you that. If you pass and you could have like Alex, the like analyst, you know, persona and for every hour of use of it in a podcast or whatever on CNBC, your kids got paid like whatever, a couple of shackles, a hundred bucks an hour or whatever. Yeah. Would you let that happen? Oh, yeah. Because one, I have no shame. And two, I have two children and children are expensive. And have you seen how the AI is taking all the jobs? Yeah, so call me. I don't matter. Bruce Lee is a person of cultural import. I am Alex. Well, you look great.

35:35I love the collared shirt. Looking great today. You know, there was another story in the docket. Our friend Eric Newcomer in his newsletter said there was a lot of secondaries going on. Oh, yes. So I want to just point out a little bit of a trend this specific week. We got IPO news. We had two companies bought by DoorDash. Seven Rooms and Deliveroo. Okay. And I think one was for a billion. I don't know what Deliveroo went for. Two and a half, three. Yeah. Billion. Yeah. So that's four billion right there. It's a huge Australian food delivery startup. Then we have whatever the purchase in Turkey was by Uber.

36:13They bought 70 % of one. I don't know what that costs, but let's assume low billions. So I think that's four deals or five deals off the top of my head in what I'll call micro M &A, single digit billions. We're going to call micro M &A going from here. We'll call regular M &A anything from 10 to 100 billion, and we'll call major M &A over 100 billion. So micro M &A happening here, minor. I'll call it minor. Minor M &A, single digit billions. We saw four, five, maybe just in the last two weeks. And we have an IPO that would be a major M &A style event, a major - It's loosening up. Loosening up.

36:51And then this is really interesting. Secondary funds grabbed a record 9 % of private market fundraising. And I guess this actually isn't from Eric. This is from PitchBook. PitchBook is a private like 30, 40,$50 ,000 a year database, kind of like the old school versus Crunchbase. Right. Probably not as good as the data in Crunchbase, I think, but I guess that's a big debate. Like a LexisNexis for investors. Yeah, I don't know how good this data is. I'll be totally honest. CARD has got their data subset. So all three of these companies have their own data. So you have to remember it's imperfect.

37:27It's not like stock data. The PitchBook crew works pretty hard, though. I know a lot of the folks over there just from talking to them. I just know when I look at the data, I know a lot of people who don't contribute their data. I know they have like holes in the data. So independent of them working hard, probably 70 % correct is what I would guess. So they're saying secondary funds grab a record 9 % of private market fundraising. I don't know if the 9 % of private market fundraising means total investment dollars into startups or for funds. Did you know if that distinction is there? I'm going to double check with the source right now because I think I know the answer, I don't want to talk out my backside.

38:06Because it could be two different things, right? It could be 9 % of venture funding to funds went to secondary. But I think this is investing in startups. So if you took 91 % of it being primary investment into the companies, and then 9 % of that total pool would be buying secondaries from the companies. Anyway, that is an increase over the years from what was maybe 2 % or 3 % of the market historically. Yeah. So that is an incredible sign as well. What that means is the bottom feeders believe now's the time to strike because it spiked in 2020, according to this data. Again, it's probably 60, 70 percent directionally correct in my estimation.

38:45That's generally what these databases have. So between five and six percent during the peak ZERP era, 2020 to 21, it plummets back down to two percent in 2022. Wrath of Lena Kahn, Silicon Valley Bank implosion. Actually, the brand's back. I got invited to go to the nickname of Silicon Valley Bank on game four. So I might be in their box for game four. Wow. They're already back and spending money on Nick's tickets. Listen, I think they landed pretty well, actually, the different parts of the businesses. And then here we go, 9%. So if this is correct, again, it's probably directionally correct. We might have tripled or quadrupled from Trow to now this peak.

39:23And it looks like it's going to keep going up. And I know this because there's like a market for calm. you know, the meditation app. And I think that from we sold in secondary 10 % of our shares, and I think it's maybe 15 % of the price we sold for at the peak was what we were offered maybe three to six months ago. The only reason I'm saying this publicly is because it's public knowledge. It's not, this is not hidden. It's available to everybody so we can talk about it. And I've been public that part of our venture strategy is to sell 10 % when we are 50 to 100x, and then another 10 % when we're 200x.

39:57Yeah. Just, you know, along the way, because we have to get DPI for our LPs. It's becoming a critical part of venture for seed stage and pre-seed like us to sell along the way. This is a great sign. So here's my question though, Jason, because it seems that we have early stage investors, angels, pre-seed, seed, accelerators, putting capital in, and then they can't wait 15 years for an outcome, right? So is secondary going to become the main vehicle for early stage investing liquidity versus IPOs and M &A for late stage? And if so, does that mean that venture capital is now essentially just pre-seed through A, and then B plus is just private equity?

40:35I would say it's more like from inception and accelerators all the way to series D or so. Series C is when people start to offer secondaries. D, certainly, people start offering it. So Rippling just raised$450 million in their series G, almost$17 billion valuation. And it includes a$200 million, what's called a tender offer. They're buying for current and former employees. So that kind of like in the previous valuation was 13.4 Series F, if these numbers are correct. What that means is, as you can see, there are people who believe that company's going public and they want to acquire as many shares as possible.

41:14The company doesn't want to create new shares. Nope. So they're saying, if you want to, you can put in$450 million in primary which would be 10 % of 16.8 billion would be 1.6 billion. So this is 25, 2.5 % dilution for that 450 million coming in. That's nothing. It's nothing. But they're like, hey, you want to get the other 200 million? We don't even want to dilute more than that 2.5 so you can buy from our current former employees. So you're right. I think what we'll see is secondaries will be half the market for private company shares. And then M &A IPOs will be the other half. I'm just picking a number here since you asked the question.

41:52And what that means is firms like ours, Launch or Pair or Y Combinator, you're going to see these firms consistently sell into these type of rounds the year six, seven, eight. I'm not sure how old Rippling is, but I think it's closer to 10 than five. I'm guessing it's seven or eight years old at this point. Founded in 2016, nine years old. Nine-year-old company. That means they're planning to go public in the next two or three years. So they'll file next year. I'm going to take a guess. Rippling will file in 2026. And this is the setup, Alex. If Trump ends the war in Ukraine, which he seems to be on his way to doing since he's doing the minerals deal, he's committed to providing them with more weapons and we're going to get our money back.

42:34Basically, exactly what I outlined should happen and what essentially Biden was pursuing. Biden didn't have the, I think, the sharpness to do the rare earth deal. So if you want to compare the two, you know, putting a business guy in there, he says, you know what? I want those rare oats. So he added that. But they both are now sanctions, really strong sanctions, and really strong weapons support. And I'll give Trump credit adding to it, hey, we're going to get our money back and we're going to do the rare oats. What's great about him having a financial interest there, and this is why trade is so important, we have a financial interest in Ukraine.

43:10If somebody invades Ukraine, they're invading our financial interest. So when SAC said on All and podcasts over and over again. Oh, you know, we have no interest over there. Why should we help Ukraine? Why should we help Ukraine other than democracy and human rights? It's the right thing to do. I'll just, you know, that's just my position. Don't want to start World War III. Do want to preserve democracy and do care about human rights. Now we actually have a vested interest. No conflict, no interest. Remember we say that every week? No conflict, no interest there. So I have no idea how I got to Ukraine.

43:39But we're talking about next year's IPO. The market coming back. The market, if Trump doesn't barrel roll the economy and he soft lands the tariff trade chaos, I'll call it chaos because it was chaotic for six weeks. If he lands that plane and Ukraine gets settled, people have already forgotten, no judgments here, but I don't hear anybody talking about the situation in Gaza at all. It is not on the front page of newspapers here in the United States. You guys might care about it. It is. I can tell you it's not on the podcast. You're not on Blue Sky enough. If you were on Blue Sky, people are still talking.

44:12Blue Sky is falling. I'm talking about New York Times, nightly news, and podcasts. It has dropped out of front of mind for most Americans. I would say it's not a top 10 issue anymore. I would agree with that. Yeah, this is somewhere. Whether, however you feel about it, it does not seem to be a high priority. I'm just making an observation. So that one has been deprecated as an important issue by the media and by, I think, the intelligentsia even, and the media. So here we are. No, I mean, we saw that even during the campaign, during 2024, it was never in the top 10, 15 issues people were voting on.

44:43There wasn't a lot of people that were arguing against more military aid to Israel amongst the two major parties. So there wasn't a flashpoint to really... It has not been top of mind. So the perfect setup for M &A, IPOs, and solving venture capital. We were on the precipice of venture capital collapsing two out of three venture firms. I believe the statistic is not making it to, not making it, think about that, to their third or fourth fund. we're on our fourth and if you counted my sequoia scouts arguably our fourth is really our fifth so that would be fund zero and i'm going to go out for our fifth on you know in 2027 i guess um i got one more year of work to do uh and i'm feeling actually very bullish about it i think we're going to see a lot of exits a lot of m &a and a lot of i think we'll see a lot of minor i think we're going to see a lot of singles and doubles which is fantastic for entrepreneurs because it will create more investment and reinvestment when you have a company go public you create a diaspora one of the great examples of course is paypal alex that created uh linkedin yelp founders fund elon would have created his companies anyway but you can you can kind of go back to paypal and x for him going out and doing tesla and spacex that was the thing the sort of foundational moment of all those people working together.

46:05Sachs' firm Kraft. A firm with Max Levchin. With Max Levchin. I mean, the list goes on and on and on. Ken Howery and his firm, Luke Nwasset, didn't work there, I don't believe, but he then worked at Founders Fund. And that's really, I think, what we're going to see here. If more companies can go public, they can create more angel investors, more LPs for funds because they get rich when it goes out. And then they start angel investing and they go out and start their own companies. And that's what happened to Australia. Atlassian went out. They backed Blackbird, the VC firm, and they backed Canva.

46:40And hundreds of companies and investors came out of Atlassian. And they still emerge because Atlassian is doing so well. Then it's happening with Canva. Canva goes public. You're going to see dozens of venture firms get LPs from those Canva millionaires and billionaires and more companies get started. Alex, wrap us up here. I just want to make a small point that when I was learning about venture capital, the idea of a series F was described to me as a series fail because surely you should have gone public by the time you raise a series F. Now we're talking about a series G, which I'm going to rename series goddamn.

47:14Things have changed. I'm being facetious, but I think this just goes to show that we're talking about rippling and we're not saying boo on them for having not gone out. Just shows how the landscape has changed because no one's mad at rippling right now. They're nine years in. I think most folks are okay with going public. I mean, if you can get a company to go public, if they go out by years 10, 11, 12, people happy about it. What I was told by people who got into venture early, they were looking at years five, six, seven, eight, going public at the 50 million to a hundred million mark. Now the bogey is$1 billion in revenue and predictability.

47:50That's a huge bar, man. Which is a huge number. It's crazy. And then what does that do to pension funds and individual investors, they don't get to invest in the public markets and get that run up from, let's say, a billion-dollar valuation to 100 billion. They lose that 100x opportunity. They get to buy in. We had the story about, is it figure robotics that had BMW maybe as a customer or not, or a trial or a pilot? I think it was figure. And figure, I believe the whisper number was a 38, 39, or$40 billion valuation. And I talked to some people after we had our discussion about it, Alex, you and I were confused.

48:27And when I talked to some people about it, they were like, oh yeah, because we did our thing. Was it securities fraud to say BMW was a customer and BMW cleaned up their statement? Right. Well, because they were making it sound like these robots were working on the assembly line, making BMWs. And it's like probably more like an experiment. They tested it out. Well, that's what their first statement was, that it was an experiment. Right. Then they did the cleanup statement that they were working on an active line right now they could have literally been putting the the what do they call the sticker in the window yeah the sticker for when you buy a new car you know it's like a sticker in the window i know what you're talking about i don't know it could have been doing that yeah right it could have been like spraying an air fresher in the car or yeah something they're a pre-revenue company and these spvs were going in the 38 39 or 40 they were trying i don't know if it actually closed because I haven't seen anything about it.

49:2038, 39, 40 billion. This is the crazy bull sign. 39.5 billion. Oh, I thought it was 39.4. Memory failed me. It's so bizarre to even think. I just want everybody to pause on this. As bullish as I am on Optimus and Figure and all of these companies to do great things in the world with human robots. Like we saw human robots for over 10 years at Boston Dynamics. Google bought that company, resold it. And it's... Not doing anything in the real world that's that crazy. Like we have Roombas. Those are great. We have the ones at the Amazon factories. We have drones delivering stuff. To give a company, I just want to also, as we talk about, is the market turning around?

50:05There are moments of insanity in this market. Yeah. Paying$39.5 billion for a company that is pre-revenue. I'm just putting this in here now. It's towards the end of the show. Nobody's going to hear this. but I want to be able to clip it in two or three years that we can say that made no sense. Yeah. That company is worth 5 billion max. That's the proper valuation. There is also, you were just talking about this with Megan Pelley the other day. I think like self-driving cars, there's a high bar to convince people this is okay. Like all it's going to take is one of these robots freaking out and hurting somebody.

50:42And that's going to really make it harder to sell people on, bring this humanoid robot into your life. They just don't work. Let's be honest. When you see what they're doing, whether it's Optimus or these, it literally is like the self-driving cars, you know, halfway between now and when the DARPA experiments. And you look at the DARPA early days, they had these cars like in the desert. Yeah, yeah. And they, there's nothing for them to hit. And they couldn't even get them to go in a straight line. Yeah. It was so, because there's no internet, there's no GPS maps, there was nothing. Yeah, they didn't have the LiDAR like Waymo's head.

51:18I think the DARPA challenge started in either 2002 or three or four, somewhere around that time frame. And this was the beginning of Waymo. The Google guys saw that. Elon saw that. Everybody saw it because it was at TED and a bunch of these events. Yeah, yeah, yeah. We were all talking about it. So it kind of incepted in everybody's mind that, hey, we're starting this journey. That's where the robots are. Now, I do think the robots will go faster because they're building on top of autonomy, LLMs, batteries, and everything. But here's a video of like the original DARPA challenge. Oh, it's a still image.

51:45I'm sorry, Jason. No problem. But even still, no pun intended. I mean, look at it, yeah. You can look at it. It's like, it looks like a Jeep or a Hummer or something. It's a Hummer, yeah. It looks like a, you know, a decapitated Hummer. Where does the person even sit? It's all filled with the gear. There's so much gear. There's so much gear that, yeah. And these things, when you see the videos of these things in the early DARPA challenges, which are on VHS tapes, like, it literally looks like a bunch of kids with, you know, their homemade RV cars. kind of feel like we're not that much further along than that with optimists and all these other robots figures like there's a lot of work to be done for these to do meaningful work in the world now they can carry boxes great but can they carry boxes consistently enough that you would put them in an amazon factory over the purpose bit robots no they have to beat purpose-built robots right yeah or they have to be so good at a range of tasks that you don't want to build a purpose built.

52:39So I guess a way to say this in theory would be, um, you need to have this thing, be able to fill the dishwasher, iron clothes, take the dog for a walk, take the trash out for a walk, cut vegetables. These are all very sophisticated, hard things to do. Yeah. And without separate trainings for each one, like they just got to look at the object and figure out how to interact with it. I think it's like we're between five and 10. I would say to do those things I just mentioned, I think we're five years out from that doing those five things in a home, the laundry, the dishwasher, cutting vegetables, walking the dog.

53:14In five years, do those four things happen or not? Let's create a polymark for it. We got to do office hours. Let's get to office hours. Do you want to show me a video? No, I was going to point out that Y Combinator's latest request for startup does include Jason Soffer for robots. And they say that it hasn't had a chat GPT moment yet, but it's close. But I don't want to delay us. Let's bring in our guest. So everyone here, you know, it's a nerdy show about startups. So clearly we are all outdoors people, which means that we are all out there four wheeling on the weekend. I kid, but I've done a bit of this.

53:41It's a lot of fun. But what if you live in a city and have a Jeep and want to get out there and get muddy and don't know where to go? Well, that's where a company called Where to Wheel comes in. And Jason, we have Brittany Paragroff from Where to Wheel, an investment of yours to ask a couple of questions. Let's bring her up. Brittany. Brittany, how are you? I'm good. How are you? Good. So you're in the accelerator right now, LA34, am I correct? Yes, I am. Okay, so we're on the 34th cohort of the launch accelerator. My God, we've been doing it for a long time. You're a series G. Well, I mean, we had a unicorn come out of it.

54:14We've had multiple hundred million dollar companies come out of it. So it's been like just a great experience for us. Just so people understand, 20 ,000 people apply for funding from us every year. And we have about 1 ,200 of those now. Maybe it's like 1 ,500 now. Yes, 1 ,500 are going to go to Foundry University every year. We watch them work for 12 weeks. And then some number of them, I think about 50, will go to the accelerator. The accelerator has a check associated with it, the 125K check that all accelerators do. And then Foundry University, we do some select checks from there. That's the feeder into it.

54:45But the companies in the accelerator, like Brittany's, tend to have products in market and a couple of customers. So tell us what you're working on. And when did we first engage or meet you? Did you come to Foundry University? How did we meet? We did. I actually saw you speak in Virginia Beach at Start Peninsula, like in 2018, right after you launched your angel book. So that was fun. Yep. And then we joined the Founder University, I think cohort seven last year, went through that, got the accelerator check, and now we're in cohort LA 34. Perfect. So you went to the Founder University. Yep. When you went there, how much of the curriculum, the speakers, and the knowledge that we try to convey in Founder University, would you say you knew already?

55:28It's okay if you knew a bunch of it. I'm just trying to get an honest assessment of our curriculum here. I mean, knew of it, knew how to implement it different, but probably knew about 20 % of the different talks about implementing them, you know, as a little bit of a different game. But there was a lot of really good information and value that was in that program that allowed us to expand. Yeah. What What stood out as, if you had to pick number one and number two, top two topics that we helped you sharpen your blade with? Number one, pitching. Oh, great. Awesome. Okay. That's an important skill to have is storytelling and pitching.

56:04Yeah. What would be number two on the list? Number two probably was how to just speak to investors. And we had never set up a data room. So learning all that, the financial modeling, what they want to know, what they want to and getting that ready for when you're, you know, actually launching your fundraising. So important, Lon. When we look at that curriculum, Lon here is the editorial director, not just co-host. We're really working on that curriculum. And, you know, I would not guess that, that the data room process would be something. And some people might be like, well, data room, I already have done that before my last two companies.

56:37And this is what we see consistently, Brittany, is we have so many folks tell us different parts of the curriculum landed with them. Yes, that's what I was going to say. it's hard it's very hard to predict it there is because it's clearly it's not like you know you could take a class and everybody gets the same class and then you get to the end of the semester and you learned everything there is to know about being a founder it's like everybody's picking up whatever information they can from whatever source they can but it's not codified in that way so yeah different parts of the curriculum appeal to different founders all the time yeah great job so give us the quick you know a really simple sentence that's a that's a thing we do on the on in the founding university is explain your startup in a really simple sentence, RSS, really simple sentence for your startup and then how it's going and what blockers and wins you've had.

57:27Yep. So where to wheel is a marketplace that connects off-roaders with private landowners for four by four access. We've done really well. We doubled revenue last year. We're expanding across the U.S. Our biggest blockers are probably insurance. So we're like insurance for landowners. So we've gotten a couple of quotes, but this sector is a little interesting on the insurance side and they're just not really feasible or offer great protection. So we've actually been leveraging agritourism statute, which 30 of the states have, and we're protecting our landowners throughout that. So it gives them liability immunity for our activity.

58:01But we have a bunch of landowners that don't fall into that. So trying to find, you know, an insurance product for them. Okay. So to recap here, Alex, it's a marketplace. You're an off-roader. you want to take your Rivian, your Cybertruck, your Jeep, whatever it is, off-road and see what it can do. There's literally, I think, in the United States, low millions of people involved in this activity. Correct, Brittany? A couple of million people love this? Yep. 36 million in the US. Wow. 36 million in the US. Yeah, one in 10 Americans. That's a lot. Takes their truck off-road. Yep. Now, how many people do it, would you say, out of that 36 million would be the hardcore that do it every month?

58:38It's their poker. It's their name. it's their skiing, it's their number one golf. How many people is it their number one activity they do it every month, 10 times or more a year? I'd probably say about, like, this is like, it's almost like a cult following. So, you know, I'd say like fishing or something like it's something you want to do almost every weekend or every other. So a high percentage, I'd probably say probably 60 to 70 % of them do. Now, like on our side, our customers come back like week after week after week after week. So it's pretty high. So this is what they do weekly like golf.

59:09There's 10 million people who do this every week like golf. Let's just pick a number. 10 million sounds like a good one for me to start with. Now, you said there's insurance issues. That makes total sense. You're in a new space. Airbnb had this problem. Uber had this problem. Uber continues to have this problem. But you mentioned some word that we all raised our eyebrows at that we didn't know. So this is a term of art in your space. When you're a landowner, you get some type of perfection. It was with an A, I think. What was that word? Yep. So it's agritourism. So it's a new their state level protections in the u.s so 30 of the states have them for agricultural land so they can have agritourism yep got it it's tourism to attract visitors to your farm ranch or another kind of agricultural business correct and you could on your ranch yes you could if you like set up pony rides for kids on your ranch that would be agritourism yes but with What agritourism in Texas, does this exist?

1:00:07And what it means is if you go to do agritourism, you don't get to sue me. Yes. So if it has, there's 30 states that have liability immunity for the landowner as well as zoning. So you don't have to deal with local municipalities to get zoning. And Texas is one of them. So there's 30 that have all of those. So if you're a landowner and you hold activity, so it could be you pick blueberries, off-roading, hay rides, then when the person comes onto the land, because it's an agritourism activity, you get liability protection from them. So if anyone gets hurt or anything happens, you're protected at a state level.

1:00:40Well, so, you know, I'm going to look at this and say, this seems like the greatest thing ever. You have to educate the market on it because I didn't know about this and I own a ranch and I'm expanding the ranch. So, but I am part of an HOA. Part of my ranch is on an HOA, which is a non-commercial use. So I couldn't do this for commercial because I made that agreement. But some of the other land I'm looking at buying in Hill Country falls into either what they call, what's it called when you're not part of any district? God, freehold, free. Unincorporated. Ah. There's unincorporated land. There's agriculture exceptions.

1:01:23But so this is great. So I think you just focus on the states that have it. It's almost like you're a poker, online poker company, and you have 20 states, then 25, then 30, I think this could be a mission that you could kung fu this, where you redirect the energy from this and make this your cause. Our cause here at our company is to get everybody to have agrotourism. And we are going to create the Agrotourism Association. So I want you to consider creating the Agrotourism Association of America. Accurotourism Association of America, the ATA. And I know it sounds silly, but if you brand that, that you are creating a nonprofit or just an organization, and these are the tenants of the organization, and you start asking people to join this organization, and you feature them, that they're part of the organization, and this is your lobbying group, this is your mailing list, and you're keeping people updated on it.

1:02:22Now you have two factors to catch people. You can catch them directly because they search for off-roading in Austin, Texas or Hill Country or wherever. You can also catch them for agritourism. And now that I think about it, you mentioned some other activities. I think that, you know, and this is why when I remember your business came across my desk, my Slack, as it were, I said there was some criticism, valid criticism. Maybe this idea is too small. But pony rides, BlackBerry, picking, these are valid as well. So is photography. So is rucking and hiking. So is hosting a Renaissance fair. No judgments, Lon.

1:03:04I do like a Renaissance fair. They're fun. That's why I said no judgments. You dress up, you eat a turkey leg. So I think you have to take this energy, right? When there's energy in the world, a cause, people like a good fight. Salesforce was built off of attacking Microsoft and package software. I want you to take on this fight for all ranch owners. You're the ranch owner's advocate. And if ranch owners want to monetize their land, the goddamn government has no right. And they need to protect us because Americans need to touch grass. This could then start the tip of the spear. You have people register with the ATAA and they register, they join the consortium.

1:03:48You do an ATAA conference, a meetup in Austin. You do one in whatever your second market is, third market. And you just have people come speak about agritourism they're doing. And then our website, our investment in you is no longer for off-roading. It's for agritourism. And you tell people, hey, you're setting up for doing off-roading. We want to let you know that there are people who do LARPing and Renaissance fairs. And here is a playbook for starting a Renaissance fair. and here's how you do it. And if you start one, we'll help you promote it. And here's one for people who are doing retreats, family retreats.

1:04:24Here's one for, and you can just produce content after content for camping, for fishing, everything. You have the tip of the spear. You're passionate about off-roading. What's the next thing that those off-roaders like to do? I know what it is. They like to drive those goddamn cars and go fishing and then they like to do a barbecue, isn't it? Yep, that and hunting or racing has a lot of crossover. I was gonna say hunting, I bet. This is the same. Perfect. I bet those are overlapping demos for sure. So then, you know, that's what we're doing here. You come for the off-roading, you stay for the jousting.

1:04:56No. You know what I'm saying? Paintballing. Guys, this is the clear use case. Paintball's a very good idea. Paintball's a very good idea. This is when I get tingles about a startup. Is when multiple people who, when they hear the idea, they meet the founder, they start thinking about the next three things a startup could do. Yeah. You know what's big, too? I used to spend time in the upper Midwest sometimes, stuff like apple picking. Yes, that was one of my child, pumpkin apple picking. How about the hay maze? Yeah, yeah, yeah. So, hey, here's a hay maze. Here's how to do a hay maze for under$5 ,000 and make 15.

1:05:32You do that how-to article, you start doing a content strategy, not paying to put your content out there. You do a content strategy, how to make a hay maze, top 10 hay mazes in Austin, in Texas. Well, in October, haunted hay rides. haunted hay rides, all that stuff. This is when you know a startup is on to something, is when people get excited and give you a bunch of ideas. That doesn't mean you go do them, but when people start telling you what should be on the roadmap, what I want you to do is write it down and then compare it to the engagement stats. And then you want to bear hug your customers.

1:06:03How many active ranches do you have on the system, which is a ranch that has done one activity or more? We have probably about eight right now. We have another one launching at the end of this month. Have you visited all eight as the founder? Yes or no? How many of those eight did you visit? We have not visited three of them. Okay. So five of them you did visit. I think a really good use of the money we invested and the money you will raise is to do what's called the bear hug strategy. I've talked about it here, which is take your trucks and go visit those places. Go for a ride there, take the person out to dinner or whatever they like to do, send them some flowers or send them something related to what you see on their social media.

1:06:47If they're really into gardenias, if they're really into archery, send them something. If they call it the bear ranch, find a bear statue, could be like a$10 handcrafted bear statue you get off of Etsy, and you send it to them with a personal note. These first eight customers, they are your core advocates. They're going to become ambassadors for you if you engage them. So a couple of strategies there, I think. And I love the fact that there's people trying to stop you because now you can make it that if people are trying to stop you and the insurance companies want to do you can create the Agritourism Association of America, the ATAA, to go after those people and say, we're here to support you.

1:07:34If you get sued, if you do whatever, we're gonna give you all the people to call. We know the, we have a chat room you can join. We have a message board. You can call us and we'll tell you attorneys we know. And if you'd start the subreddit for, this is another great thing for you to do. You should be the mod of the subreddit for agrotourism. Is there an agrotourism subreddit? Let's take a look. If there's not. I was going to say there are a few big states that don't have this policy, including California and Pennsylvania. So Democrats. Yeah. Well, but that's like that's a natural place to start.

1:08:11Like California has a million places that would be good for agritourism. There is. R slash agritourism exists, but it only has 115 members. So start a new one. Agritourism Association. and just let's get started here because I think you could capture a lot of the energy when there's energy in the world and you can roll it, right? And then send it back out and use it for your purposes, hopefully for good, as we got here, helping ranch owners build sustainable businesses. The Agritourism Association of America, helping ranch owners build sustainable businesses, build sustainable ranches, build sustainable...

1:08:49I think your original slogan was the best touch grass. Touch grass. Perfect. Yeah. That's exactly what it is. I mean, this is what Americans need. Yeah. I am so excited for you and your business. And where are you based? We are on the East Coast, Virginia Beach, Virginia. Perfect. People like to go there. This is another thing to think about. I don't know if you've got a family and it's easy to uproot. Where is the most off-roading in the world happening? In America, I mean, obviously the West Coast has access to more locations with more public lands. But we actually... With agritourism. Oh, agritourism probably on the East Coast.

1:09:23So a place where they have the agritourism exemption, I think, which state? We're in Virginia. We've got, most of our locations are here, leveraging that. Okay, but which is the most popular place with agritourism and people going on ranches, has the most number of ranches, the most activity is what I'm kind of getting at here. Probably Florida or Texas. Okay. I think what you have to figure out is where this occurs most frequently, where the best host will be, the most people who want to go there. And I think you need to put the company there at least for a year so that you can build it. Now, if you happen to be in the place where it's a top three place, fine.

1:10:00But I remember talking to Joe Jebbia on this program and Brian Chesky from Airbnb, which obviously is a corollary marketplace to your business. And at some point, all of their customers and the most sought after destination was New York. and at some point, and the regulations at the time were the most fruitful for them. So that combination, you know, where it's like most hosts, most desire, most customers and, you know, best regulatory environment. If you were to do those three circles, he just at some point, Paul Graham told those founders, well, why are you here? Get your asses there. And they just camped out there for six months.

1:10:38You can look it up on our podcast. But I think sometimes if you're really committed, you got to go to where the action is. Great job with the company and really excited. Now you're actively in the accelerator, right? And what week are you in? I think we're in week three. And who's your... Great. Who is your primary and who is your secondary at our firm? Their names? Bianca and Erica. Perfect. You got two winners there. So let me know how they do. And we're going to start doing some stuff in Austin. So you like the barbecue? Yes. You're a pulled pork, your brisket, your beef ribs, bison ribs. You like the pork ribs.

1:11:14What is your favorite? Barbecue sandwich. You like a barbecue sandwich. You like the brisket on the sandwich. You like the pulled pork. What do you like? Pulled pork. We do it North Carolina style out here. Oh, that's wet. North Carolina is pretty wet. Is that what it is? A lot of sauce? More vinegary sauce than like mustard. Yeah, I know the mustard vinegary sauce. Oh, that's really good. Tasty stuff. It's really good. This is why Kansas City barbecue is the worst barbecue in the nation because it's too fricking sweet. Brittany, I don't agree with you politically, but I agree with you on barbecue.

1:11:43Anyway, listen, give him time. Give him time. When he has homeless people at his little park, he takes his kids to. I lived in San Francisco for eight years. He did. He did. You pulled the ripcord. You're a moderate. All right. Listen, continued success. Cannot wait to host you here. We're going to get you that pulled pork sandwich. Congratulations on week three in the accelerator. If you want to come to the accelerator, it's launch.co slash apply. If you go to launch.co.s to apply, one of our 11 team members or 12 team members now on our investment team will meet with you if you have a reasonable idea.

1:12:15We meet with like maybe one out of three people who apply. We do what's called an introductory meeting for 20 minutes. Brittany, I'm sure you had one of those at some point, yeah? Yes. And do you remember who you did your introductory meeting with? Kelly. Perfect. Kelly's amazing. She's an all-star. She worked on Founding University. Now she's working on the syndicate and rotate people around so they get a lot of experience. So the 20-minute meeting, very simple. you spend 12 minutes or so pitching us what you're working on. We tell you in three minutes what we do. And then with the final five minutes, a little Q &A back and forth.

1:12:46And then if you decide it's a fit, maybe we talk about a second meeting, but we don't want to waste people's time. So if you want to get that quick 20-minute introductory meeting with my team, launch.co slash apply. Launch.co slash apply. We have a common application that'll basically get you into the founder university, the launch accelerator, or even potentially a direct investment if you're like the Series A level. Great job, Brittany. He's Lon, x.com slash Lon, L-O-N-S. He's x.com slash Alex. I'm x.com slash Jason. It's like a 4.3 average. Go Knicks. F Boston. We're going to see you next time.

1:13:23Bye-bye. Bye. Thanks.