Startup pitch competition: Jason invests $25K LIVE! | E1866

0:00Today, I'm going to have four seed stage startups pitch me their products and then decide which one of them to give a friends and family$25,$25 ,000 check to right here on the show. This Week in Startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. Twist listeners can get$1 ,000 off for a limited time at vanta.com slash twist. .tech Domains has a new program called Startups.tech, where you can get your company featured on This Week in Startups. Go to startups.tech slash Jason to find out how.

0:42And OpenPhone brings your team's business calls, texts, and contacts into one delightful app that works anywhere. Get 20 % off your first six months at openphone.com slash twist. All right, everybody, welcome back to This Week in Startups. We've got a special episode for you today. I'm going to have four seed stage startups pitch me their products and then decide which one of them to give a friends and family$25 ,000 check to right here on the show. So with me today is Kelly Schricker. Kelly runs the Founder University, which we do at my investment firm, Launch. What is Founder University? Well, it's a 12-week course.

1:25It occurs Monday and Thursday nights at 6 p.m. Pacific. And we have a curriculum and we teach founders how to start a company. About half the companies who come to Founder University are not yet incorporated. They're side hustles, projects, you know, they're in the ideation phase. Maybe they've got two or three co-founders and they're building. Kelly, we're starting our seventh cohort. Can you believe it? I cannot, but I am so excited. Yeah. And so if people want to apply, what's the perfect stage of a company to come to Founder University and where can they apply? If you have an idea, you're still working on the MVP, even if you have a few early customers and maybe you're still feeling really new at this, those are all great stages to apply.

2:13We really focus in the program on getting through those early days. A lot of founders talk about not only the accountability and the content, but also having a community. It can be really lonely being an early stage founder and not knowing who to turn to. And in this case, you get a group of, you know, 250 ish other companies that are all in the same stage as you. And this all occurs online and on Zoom. And so every Monday we do the curriculum and on every Thursday, explain what we do on Thursday. Yeah. So Thursday is a continuation of whatever we cover on Monday or if we're hearing a lot of questions from the cohort on something specifically, we'll do a special topic there.

2:49And really, it's meant to be a chance for everybody to get to co-work together, to dig in, to ask each other questions, push each other to be a little bit better. and then Prash and I always stay in the main room and keep open office hours. So for all of the other things that you might need to talk through and have a sounding board for. And so you just mentioned there, there's a main room, but on Zoom, we can do these breakout rooms. So explain how the breakouts work because we skipped over that. Oh yeah, so with the breakout room, so what we actually do is we have everybody come in. We start with small wins, which is a good way to get everybody engaged and talking.

3:22And also you can hear if somebody else landed the first Facebook customer or customer. Explain what small wins is. Oh, okay. Perfect. Because we have a lot of nomenclature inside the company, like our own language, every company does. So explain what small wins are. Yeah. So small wins for early stage companies. Sometimes it's, hey, I fixed a bug that was really driving me nuts. Sometimes it's I launched or I got my first customer. They're really usually not that small of a win, but it's all the things that you're facing and that feel like a big milestone and you want to share. And again, it creates a really great opportunity as you share those things for other founders to say, hey, I heard you did this thing really well and I've been struggling with it or I can't figure out how to do the Facebook ad thing.

4:04And then it creates those moments for them to either go into breakout rooms or take the conversation offline and really build that relationship fabric between other founders that, again, are in the same stage and facing a lot of the same things you are every day. Okay. So a bunch of founders come into a Zoom room. We hit the breakout rooms. You say how many people you want per breakout room. everybody automatically or randomly gets assigned to breakout rooms is that correct yep and then you ask them hey have a conversation is it typically four people six people it depends on the what we're working on but we try to keep them really small somewhere between probably five and twelve per breakout room um yeah and then you ask hey go around the table everybody talk about their top two or three small wins for the past week maybe you got a new developer maybe you raise the 25k angel tech check, whatever it happens to be.

4:52It's a great icebreaker. And then people can work on other things. And, you know, the curriculum is in modules. What are some of the most popular modules that we tried to teach founders at this early stage? Which ones did they get the most value from in terms of your feedback you get? Yeah, I think a few of the big ones we hear are around how much to charge and when to charge. And one of the things that I hear a lot, maybe actually from some folks in this group was the takeaway of, you know, charge early and often, right? You don't want to wait too long to get that first paying customer because you waste a lot of time in between here and there.

5:27And so the earlier you can do that, the earlier you can kind of learn from those people and what they value, and then hopefully grow those customers fast. Yeah, the dark art, the alchemy of pricing, how much value does your product provide? And should it be 10 bucks a month or 1000 bucks a month, you really have to drill in there. And most founders either don't charge at the early stage, or they charge too little. And then they leave a lot of money on the table. And maybe they don't need to raise funding, maybe they can charge $1 ,000 a month and get to 20 customers really quick. And then hey, you don't have to dilute your cap table, you can push funding down the road.

6:00So that is a great module. And when we write these modules, they're organic. So we're constantly updating them every cohort, we do four cohorts a year, we'll have a couple of 1000 people apply. I think last cohort, it was over 2000. And we accepted 220 teams or something. I think this cohort, maybe we'll hit 3000 applications and accept 300 or so companies. I know we have offers out to over 200 right now. And so if you want to apply, you just go to founder.university. Absolutely. And we are our next cohort kicks off the first and second week of January, but there's still time we still have spots open.

6:35So please do submit that application. We will be reading it as fast as we can and get back to pretty quickly. You're working over the holidays. I saw that. You got a special dispensation. I tried to shut the company down for a week and you insisted on working. All right, that's fine. But Kelly will be working and getting your applications in. I like the commitment. So let's get started here today. You've got four great companies for me. They're going to pitch me for three minutes each or two minutes each? Two minutes each. Two minutes. I'm going to take notes. I'll be off camera. And we're just going to have the founders pitch for two minutes.

7:05And then you will interrupt them at the end of the two minutes and say, OK, time's up. Correct. Founders will keep going. All right, let's get started. All right. First up, we're going to have Golf Golf. Hey, Jason. It's Abe with Golf Golf, and we're putting a personal sports coach in your pocket. Meet Brian, a Golf Golf customer. Brian sucks too much at golf. He's too embarrassed to even show up at the course. He's like one of the 15 million range-bound only players in the U.S. and one of 3 million new golfers in the U.S. every year. Luckily, Brian hears about Golf Golf. Within a couple of weeks, he's comfortable enough to actually go to the course with his buddies.

7:41Let's check out one of the products that Brian used. Brian's going to simply upload a photo of his driver stance, and the AI is going to instantly tell him how he can improve his stance and swing more like the pros. It'll even roast him if he sucks. This product has been a success. We've had over 1 ,000 users for the free version and 28 paid customers for the pull report, resulting in$950 in sales. As we zoom out, our primary business model is B2C with bottoms-up B2B packages for country clubs and APIs for driving ranges. Ultimately, the main way we're going to reach the consumer is for a subscription app.

8:16Let's take a look at the design. Our UX is going to be the market leader. Unlike our competitors who offer mere tools, we take golfers on a journey with personalized goal-oriented programming that actually rewards them for getting better. This includes customer lessons and LOM feedback based on the player's needs. We have a clear pact to 100 million ARR on just the consumer side alone, needing around 200 ,000 golfers to reach that goal. We have a team of avid golfers who can bring a golf tech product to market. We have multiple engineers, designers, and I'm also a celebrity golf caddy. Check out this photo of me and Travis Kelsey.

8:54We already have A-list golfers and celebrities using the product. We've had George Lopez as a user, Max Beasley from Suits as a user, and golfers from some of the best country clubs in the world using our products. The sport of golf and golf content is crushing it right now. On TikTok alone, there's been 27 billion views. We're going to be the best and most fun way to learn how to golf. Our early products have been a success. We'll be pushing our mobile app for review in the coming weeks. And as we look to 2024, we're going to have real-time in-the-year LLM coaching. We're only partnering with the 6 ,000 drying rages in the US to put our technology in every stall.

9:30Thank you. Okay, well done. And when we do these, if you're listening to the podcast, you can always go to youtube.com slash this weekend and find the episode on the video's channel. When you're presenting, if you're ever on a podcast as a founder, make sure you describe, we call it sportscasting, what they're seeing on the screen. This is great. We've invested in, as a firm, many coaching companies, executive coaching, sports coaching, tutoring, lifestyle and health coaching, weight coaching, all this kind of stuff. And the problem with coaches is they're expensive. And maybe they're real time, maybe they're not real time.

10:05And then a lot of people feel anxious and can't either they're, they can't afford to have a coach or they're anxious about it, or it's inconvenient. And what's great about AI coming into this is you can just start using it immediately. You don't have to book a time. It's lightweight, it's going to be cheaper. So it's available to everybody. And business model-wise, let's talk about your pricing. How do you think about pricing this product? We believe that we can hit both the main golfer with the$15 a month subscription product, but also the premium golfer that wants some of that human touch with$100 plus a month subscription product.

10:42So currently - What would be the difference between those two? What would I get? I mean, I know what I get in the$15 one, but what would I get in the$100 with an actual real golf coach. Instead of just the AI tools, we'll be having professionals looking at the videos that you upload, the modules that you complete, and actually giving feedback. And then also, we're going to be rewarding people with rare tee times in exchange for some of their completion of modules and lessons. And so making sure that people get legitimate in real life rewards for their progress. So AI coaching is going to be a thing.

11:17I believe that. Some hybrid model is fine um you know every time an ai coach gives feedback kelly on one of these it could go into the language model or whatever the ai model and do some learning i'm not sure if that's going to happen immediately but that obviously will happen uh down the road and so yeah this this feels like something that could become addicting we have a lot of subscription products consumer subscription products fitbod doing wonderfully for people who work out steezy doing wonderfully for people who dance and calm of course for meditation tone bass for classical music instruction and then we also have musician for music instruction and we've had some language ones as well so tons of great companies in that space we believe in this model i see you have builder founders so there's three founders in the company that's correct and two of them are writing code is that correct that's right perfect engineer uh me and my buddy are also ios engineers and we have a designer perfect but there are three founders not four correct we have a couple people part-time um but yeah three core founders and when we define founders we define them as over 10 ownership in terms of equity each yep correct okay perfect so this is all important details if you're an angel investor or seed fund listening a lot of those listen to the pod we always prefer and we We accept into the program the people with three or more founders first, then we go to two or more founders.

12:43And we very rarely even get to solo founders. Why? If you want to go far, go together. If you want to go fast, go alone. We're looking for people who want to go far. And so builder founders, critically important. And we ask the question very specifically, are they writing code or not? Because we don't want somebody who used to write code in the 80s or 90s or 2000s. We want people who are actually building code now. And you got some early traction that's very attractive to our firm as well. and your business model, consumer, consumer subscription. That's in our top five categories as a firm. Kelly, the team at Golf Golf also had product velocity, yes?

13:16Yeah, they were wonderful on their updates during the program. So it was easy to follow along their journey and they are rapidly improving the product. Every time I have an interaction with Abe and the team, it seems like it's late years ahead of where it was the last conversation. Listen, selling software is hard enough right now, man. It's hand-to-hand combat out there in B2B land. The last thing you need to do is slow your sales team down because you don't have your SOC 2 dialed in. So if you're SaaS or a services company and you store consumer data in the cloud, you know what you need to do?

13:46You need to check out Vanta. They're going to get your SOC 2 compliant easier and faster. And Vanta makes it so easy to get and renew your SOC 2. On average, Vanta customers are SOC 2 compliant in just two to four weeks. Compare that to three to five months without Vanta. They're going to save you hundreds of hours of work and up to 85 % on compliance costs. And Vanta does more than just SOC 2. They also automate up to 90 % compliance for GDPR, HIPAA, and more. You can't afford to lose out on those major customers, the lighthouse customers, the big fish, the whales, because of silly stuff like lacking compliance.

14:20Just work with Vanta. I'm an investor in the company. It's a great company. Get your compliance automated. Get it tight. Tight is right. And close those big deals. Here's the best part. Vanta is going to give you$1 ,000 off because they love this week in startups. They love startups. Vanta.com slash twist. That's V-A-N-T-A dot com slash twist to get$1 ,000 off your stock too. Explain to the audience why product velocity is important in what we do in selecting companies. In early stage companies, you know, there's a lot you don't know. And everything is about testing and iterating and trying to figure out the things that are going to delight your customers and get them to pay and pay more and to refer it to all their friends.

14:56And there's no way to do that if you're stagnant, right? So you have to go out. You have to test a lot of things. You have to keep pushing updates. You know, the idea that investors, you know, when we when we offer a company money, we want them to put it to use, right? We don't want it to sit in a bank for two or three years and just sit there. We want you to be putting it out into the world and and making a product that your customers absolutely love. Great. Product velocity, name of the game. Great job. OK, let's meet our next company. All right. Next up, we're going to have Cicada. Hi, this is Mircha.

15:26CEO of Cicada. So it's really hard to make money from music. But did you know that U.S. musicians on average earn only$20 ,000 per year? Cicada helps musicians make more money from live gigs. Meet Stefan. He's an above average earning musician, but he still only makes 15k from live music. So he signs up for Cicada. He gets a beautiful personalized QR code that he can put up at all of his gigs. And this lets him monetize people's well-documented state of euphoria at live music events. Through Cicada, he starts accepting tips and offering paid services, but also he creates custom merch for every single event.

16:04He puts up his set list and shows people real-time lyrics and song info for all the pieces that he plays. So through tips, merch, and new bookings, he earns over$10 ,000 extra per year, and this actually increases his live music earnings by 68%. These are real numbers, by the way, extrapolated to a year from our first six months of service. At the moment, we are focused on the top 5 % of professional musicians. We charge them $30 per month as a subscription, and we also take 10 % of each transaction. But we plan to also offer a free tier below that, and this will enable us to service the bottom 94 % of artists who are just entirely unserved by existing tools.

16:43And that's because most creator platforms like the Patreons and YouTubes of the world, these focus on monetizing content, not performance, but playing music and creating content are totally different jobs. At the moment, we have 32 customers, just got a new one. Our QR codes have been scanned over 600 times in 11 countries. Last month, we more than doubled our revenue and we've added a few new customer types, orchestras and artist managers. The founders have decades of experience in music, engineering and business. I'm actually the world's most highly awarded classical guitarist. I founded my first startup at 19 and I've previously led content at Tonebase, your Jason Calacanis portfolio company.

17:21And CTO Mark Kirchner is a full stack engineer and a jazz bassist. Awesome. Well done. So to recap, what the company does is you help musicians host live streams and performances with their fan base, who will then pay a fee to come and watch them perform live. That is possible to do on the app. But primarily, we help musicians bring beautiful QR codes to their actual in-person concerts. and there they make more money by allowing people to buy stuff from their store or services right at the concert song dedications so we're mostly focused on in-person events but there is definitely a potential for hybrid and fully online events as well so i go to a live event do you sell the tickets to the live event as well or they have a full-on ticketing capability you know built into the platform.

18:13So some people do. Some people do. So if I am an established musician, I have a gig, I sold my tickets through Eventbrite or something else, or maybe, you know, Ticketmaster, whoever owns the venue, I put up your QR code, and they're able to order from that QR code, merch or other items. They are able to do that, exactly, and much more. They can see real-time lyrics, they can, you know, make song requests if the artist enabled that or buy specific services. So it's both interactive media that they get to see on their phone and also financial transactions that are enabled through it. Can I pay to play a cover song?

18:53Like, could it give me like, this band knows 100 cover songs and like a jukebox, I could say I want to pay 10 bucks to hear Freebird and or somebody that in my own and it moves up higher on the list we don't have that model yet the auction model we want to do that in the future but we do have the possibility of adding a song request that is paid and i use that at my own performances if i'm not playing a solo concert where the program is decided in advance if i'm just playing background music i'm a musician i use this in my own concerts um then i you know i let people request songs and that's totally doable got it awesome so uh this doesn't exist other places in the world or it exists in different components in different places?

19:33I don't think it exists in this shape. So there's a lot of music products that help musicians sell more tickets. There's a lot of products for lead generation for finding gigs. But I don't think there's anything that really helps the ordinary musician make more money at the gigs that they do play. And when I pull up that QR code, does it let me sign up for the mailing list as well? Yes, by default, there's a pop-up that asks you and musicians can choose to let you close that pop-up without giving an email, or they can force you to put in the email, or they can also choose to disable the mailing list if they desire, but we encourage them not to do that.

20:10What about phone numbers? Can I do mailing list or phone numbers? Yes, the default is just email, but musicians can decide to choose to also require phone numbers instead. My understanding is building your mailing list is the name of the game as a touring musician, is that correct? That is correct. And your understanding puts you ahead of 98 % of musicians who haven't understood that. But yes, it's true. Okay. So even in the musician category, I mean, let's be honest, musicians are artists. And typically, they spend their time on their art and probably very little. So a platform like this makes a lot of sense.

20:41All right. You got a co-founder. So there's two of you. Your co-founder is the CTO. You're the artist. You got a little bit of traction. You got$1 ,000,$2 ,000 a month in monthly reoccurring revenue, I understand. A bit less than that. at the moment we did hit 1001 months um but at the moment we're at about just over 500 but we have enabled about a thousand dollars in transactions and a number of gigs that i received from using the app myself um that were booked by people who are delighted um because they saw all these extra things about me so all these features that you've built is there one that's breaking out and that people can't live without and if so which one i think at the moment it's it's kind of silly but i think the shop is the main the main one just the simple shop the well the merch and and the other stuff that people can sell some people sell fingerings or you know pdfs or other things and and it's kind of unexpected to us because there's many shops in the world that exist already for us it was almost the secondary thing to build this uh but i think you know because of a combination of the fact that musicians are not technical and that we enable people to really just access it you know at the concert like this really taps into something primal and it helps people make more money.

21:50So I think the shop is the main feature right now. Yeah, I think you may have hit on something with the QR code to then give people something to do on their phone during a show. Now, some artists may not like that. They don't like the phones being on. But let's face it, consumers want to use their phone constantly. This gives them something to do in sports games. People like to bet and do FanDuel. And so at a music event, And I think it's very interesting. Okay, we're back with another segment of Pitch It to J. Cal. Yes,.techdomains is giving Twist listeners the chance to show off their startups on This Week in Startups.

22:23I want you to go to startups.tech, startups.tech, slash Jason, to apply. There's only one rule. You need to have one of those gorgeous, iconic.techdomain names to get featured. And Kitex.tech, like SpaceX, Kitex is building the world's lightest and most cost-effective wind turbines. It's a portable off-the-grid solution inspired by the efficiency of, you guessed it, Kite's. It's also a cost-effective power source for travelers, small business, or consumers who just want to be off the grid. What an amazing idea. And this is a cool product. Go check it out at kitex.tech. I mean, this is revolutionary.

22:59Very cool startup here. Kitex.tech is all about making sustainable energy more accessible. And of course, they're building on a.tech domain name. So here's your call to action. get featured just like Kydex.tech did by going to startups.tech slash Jason and applying today. Startups.tech slash Jason to fill out the form and apply today. God, I love these.tech domains. I also love the idea of dedicating a song. So I think, you know, doing dedications and saying, hey, here's the set list, buy the dedication. And if you could buy the dedication for 20 bucks, and you're playing 20 songs, what is an average show?

23:3720 songs, 10 songs? Something like that. Depends on the show. Well, obviously, I know it depends. I'm asking you. You're the expert. Always answer the question with a definitive number. This is an important line. My personal shows, I'm a classical musician, and it's usually less than that. It's more like it depends. That's a better answer. So when you're talking to investors, always try to give them, it depends is the worst answer in the world. You know what happens when you say it depends? Your credibility goes down. I know it depends. I could always say it depends. So when you're talking to investors, that's a chance for you to seem smart.

24:09So does that make sense? Kelly should have taught you this in the training. So this is Kelly's fault. But let's try one more time and think about, I'm going to ask you the question again, and think about a way to sound super credible by giving me, you know, three data points here, but do it in 10 seconds or 15 seconds, three, two. So tell me, how many songs are there in the average show? 10 to 20? My shows usually have eight to 10. Pop musicians tend to play more like 20. now your your new answer makes you seem so credible and then i can work with that answer okay so at a classical you do 10 but a pop does 20 if a pop musician does 20 and they got 20 dollars per uh song to dedicate to as a dedication that's 400 incremental dollars how much does a pop musician get paid to play a gig?

25:00Often nothing. Many musicians start out their careers with no payment. They are just happy to perform and they will perform for free. And that's this very significant use case for our product. Now, you're learning here real time on the show. When I asked you the second question, you gave me a piece of information I hadn't even considered. It never even came into mind that they're doing this for free to for exposure. so if they're doing it for exposure and they get 400 bucks from dedications and they get another 200 bucks from requests uh holy cow now all of a sudden they're making 600 and that costs the venue nothing and the venue doesn't care that's just tips genius is tipping in there too can i just give a tip through the qr thing was one of the first features we built it's in there and right now you can only give a one-time tip but as of next week most likely we'll have recurring tips as well.

25:51Ah, so you can subscribe to the person and give them a little bit extra. That's amazing. That's right, because here's the thing. Oh, sorry. Sorry. I didn't. I'm just excited about this. You're excited. Go ahead. I'll give you the space. Okay, here's the thing. Patreon and stuff exists, but it's for content. People expect regular video updates, regular something, you know, content that they can consume at home. Musicians are not always content creators. It's different jobs. Some people are both, but you need this for live performing musicians too. Maybe they shout out the names of the subscribers at the beginning of the concert, or maybe they get a meet and greet, or maybe something else, you know, but it's basically that it's like Patreon, but for, you know, for in person performers, not content creators.