Zoox Crash Fallout, COATUE’s $1B Open Fund, and Office Hours with FusionAds | E2122

27:01Would they get killed by robo-taxis? And I think people answer that question with Waymo is having a spectacular time in Austin with Uber. The utilization of Ubers in Austin is 99 % more utilization than human drivers. In other words, if a human driver, like if these Waymos are doing probably 15 rides a day is my guess, maybe they could hit 20. There aren't many drivers. 99 out of 100 drivers don't do that. What that means is wait times are going to go down. The availability is going to go up. If you live outside of Austin, you might wait 10 minutes to 20 minutes for an Uber. Everybody's had that experience when they're on vacation or they're out of a city center.

27:41You're going to have the city center experience of what we called Uber Unos back in the day. I came up with this term for when you get one in one minute. And I would always send a picture to Travis and William and Ryan like, oh, I got an Uber Uno. They also did the Volkswagen deal. They're now up to like 15 partnerships with autonomy companies. The Volkswagen deal is going to be the game changer, I predict. The Volkswagen is the number two car producer in the world. We're going to need 10 to 20 million cars per year for a decade to put a dent into the number of rides people want to take. The Volkswagen bus, I think, will be the number one.

28:18They call it the ID bus. They should just call it the Volkswagen bus because that's what it is. It's a cool car. It's big. It's awesome. It's got like seven seats. Have you seen it? It has sliding doors. I haven't seen it in person yet, but I have seen it. all over. You're talking about like two captain's chairs, two captain's chairs, and then a three person bench. The captain's chairs can move around, but you can easily get to the third bench because the second row is two captain's chairs. Like you can get on a Model X. That configuration is seven people. So there it is. And it's a beautiful car.

28:51These things are going to be everywhere and robo-taxes will be everywhere. Waymo's will be everywhere. And Waymo just did a deal with Toyota to provide their self-driving cars. Yeah, that's another part of this story is all of the self-driving partnerships. I mean, you mentioned Volkswagen. Just this year, Uber's also announced deals with Pony AI, WeRide, Momentum, May Mobility, Waymo, and NVIDIA. So that's all happening simultaneously. Yeah, their partnerships team is working overtime. Send them more coffee, somebody. But Jason, to your point about the number of cars that we need, I know we're talking about drops in the bucket here, but stories in the last, I think, two or three days had Zooks ramping up production of its cars and also Waymo working to expand its fleet of 1500 Jaguar I-Paces or whatever they're called.

29:38But we're seeing momentum right now to get from triple to, you know, four digits. And then I think we'll be at five digits probably by the end of this year. If you're a startup, you need to sign up for Notion right now. Go to notion.com slash twist and sign up for free using my code TWIST notion.com slash twist here at my venture firm launch and my podcast all in this week in startups. We put everything into Notion. It also has an amazing database function and it does CRM for us. It does OKRs for us. It does timelines. It's basically our single source for all of our information and data, everything in one space, one price, simple, powerful, beautifully designed.

30:21The design at Notion is award winning and Notion can seamlessly transition from a workplace power tool into a game changer for your personal life. I got a couple of different properties. I got a ski house. I got a ranch. I got another apartment. All of that is contained in a Notion instance for my family offices. You can get started for free at notion.com slash twist. That's notion.com slash T-W-I-S-T to start free. Take the first step towards making your life organized and productive. The number one communication tool in the world, in my estimation, is Notion. Notion.com slash twist. When you say five, you mean 10 ,000 or more cars, which if they're doing 20 rides a day is not a drop in the bucket.

31:00Currently, ride sharing is 1 % of rides here in the United States or slightly less. And then globally, it's less than 1%. So I believe we get to 30 % of rides, 20 to 30 % of rides in 10 years is my estimate, but good for the Uber team. Other piece that I thought was particularly good was Uber now is saying back to the office, but three days a week and previous employees who were remote yeah, no more remote. You still have to come to the office 3%. It got a little testy, I guess, on a all hands meeting. People are still doing these all hand meetings where people could just ask any question they want.

31:36I think that was like, I think we're going to see those go away in Silicon Valley. They don't seem to be very popular like they used to be. I mean, when everything's going up and to the right and you have a small company and everybody's got a ton of stock, I think it's one thing to have these. When you start getting into hundreds of thousands or 50 ,000 employees and some number of them are not going to become billionaires or millionaires based on their equity. Yeah, you might get a little brushback on an issue like this. But here's my advice. Go find another remote job. Okay. There's other jobs in the world.

32:11Yeah, I think part of it too, if you're going to have an all hands meeting to address a controversial decision against all of your employees, you might want to have a better line than if you're here for a sabbatical and this change causes you to change your mind, it is what it is. There's two different issues. One is he did say in person, we get more results. We have good results now. We need to get to great. So that was what he said about the in-work thing. The sabbatical thing, he said, you can take a month off in eight years if that's what you are here for is the sabbatical, like whatever. I don't even understand why companies have a sabbatical.

32:47I never got offered a sabbatical. I think the reason we want you to be here is to impact the company. We recognize some of these changes are going to be unpopular with folks. This is a risk we decided to take. The pendulum has really swung here from employee power to employer power. This is what a manifestation of that. The Daryl point, Jason, about goods not good enough, we have to be great, I think dovetails neatly with what the CEO of Fiverr was saying. His argument is that we have to be basically using AI all over the place now. forget hiring more people. You need to be upskilling yourself.

33:20So he sent an email just to put more context on it. Fiverr is a, let's always explain what the company does in case people don't know. Fiverr is a marketplace where you theoretically spend five bucks to get something done like a micro task. I need an image. I need a press release to throw somebody a fiver, you know, five quid or whatever. And they, and they do some work for you, five pounds, whatever. So he wrote an email to the entire company. I don't know the timestamp of this, but this sounds like one of those 1am CEO, like manic emails that I send. Yeah. I'm going to guess two in the morning.

33:56There's not a timestamp on it. Oh yeah. 1258, but we don't have AM or PM. No, it's AM. 100%. Trust me. When you're a CEO, here's what happens. You work all day, you work all week, you're in panic mode. You're like, we need, we have competitors, things are changing trump tariff chaos uh recession whatever it is ai replacing jobs marketplace competition and then you decide to write a missive all good missives a missive can only be written after the stroke of midnight this one will be no different what did he write specifically just like jerry maguire oh is that what happened in jerry maguire he stays up all night and he writes his manifesto yeah oh okay great okay so what did he what did he say well He says that no matter your role, no matter your job, even his job as CEO, AI is coming for it.

34:45So what is the solution to that? Personally led learning. He wants you to try, tinker, fail, learn, and collaborate with how to use these AI tools. Echoing, I think very closely what Toby from Shopify said, that the way to get better with AI is to use it a lot. It's a tool. I really liked how he said this. He said, I'm paraphrasing here a little bit. What was easy is now zero. What was hard is now easy. What was impossible is now merely hard. So essentially, everything has become easier, which means people need to take on more. And then he concludes the letter with saying, essentially, don't come to me for more staff if you're not using AI tools very aggressively.

35:22Again, mirroring what Shopify and other leaders have said. I think this is tough from the Fiverr CEO. Because a lot of the love, I'll tell you, as a leader and as somebody who works with leaders of the companies right now, there is deep panic in the executive suite right now, across all companies. It's an elevated situation because of the economy, the recession, Trump tariffs, all this stuff combined with AI hitting at the same time. Now, for every opportunity to go faster, hire less people, maybe even trim staffs and costs, you also need to have people be willing to embrace these tools. I'm finding it very hard myself to get people to embrace these tools.

36:04I have many people come to me and they have a problem. And I'm like, they didn't type the question they're saying out loud to me into chat GPT first or Gemini. It has led to me in terms of my mentorship with people, getting them to be AI first. It's just like getting people to be online first, internet first, mobile first. As a leader, you have to push people and some people will just not do the paradigm shift in business. And then you have to fire them. You have to fight with them. You've got to push people. It's so hard to be in management. That's why you get paid a lot more because you have to worry about these issues.

36:43I do think it's interesting. And I think something that's sort of a positive in this, we used to talk about AI taking everybody's job. That was the concern. It was like, you're going to lose your job to AI. AI is going to be able to do exactly what you do. And this is part of a lot of different, even the AI warnings now are like, people are going to get better at working with AI and they're going to take your job. Like, it's not about being replaced completely. It's about you having to complement the skills you already have. At least that's how people are talking about it now. Is that what's really going to happen?

37:17Who knows? But I do think it's a positive sign that we're discussing AI just completely running everything less that it's more like human plus AI is going to be running everything. Okay, so how does the rubber meet the road here? So the CEO of Fiverr posted an update. His memo was about a month ago. We're talking about today because he just dropped news about how his company reacted to this. One thing he said, Jason, was that he's going to open his calendar for folks to literally come by and pitch him ideas about how to use AI to make the company better. And as a response to his email and those meetings, he said the following thing.

37:49We're already rebuilding how we work, and velocity matters more now than ever. Transitioning to a modular architecture, using AI to refactor legacy code, auto-generate documentation, and power custom workspaces across teams. Everyone must strive to automate their manual work, freeing up time for his thinking, critical decisions, and creative problem solving. Essentially letting people be more human and less robotic. So this back's on Mark's point. That Satya Nadella, the Microsoft CEO, I wish I had the clip in front of me, but he gave an interview like two months ago where he said exactly this.

38:20Like everybody needs to shift their thinking to be how much it's not AI is going to take my job. It's how much more productive will I be able to be if I compliment everything I'm doing with AI tools and potato potato though, Lon, because if everyone's more efficient and you can do one person, one human plus AI equals five prior humans, doesn't that have the kind of the same impact? Sure. I, it's, it's, it's not a change in what's going to happen. It's a change in how we're talking about working with AI, which does strike me as it's a little bit more humanistic or it's a little bit more humane.

38:55Yes, it is. It's actually a very good insight. People are not saying we're going to replace you in the customer support department like they were saying earlier, like all these discussions, we're going to get rid of the customer support. It's all going to be down to AI. They're saying, you know, please be absolutely engaged with these tools so we don't have to replace you. somebody say you're not going to be replaced by ai you're going to replace by somebody who uses ai yeah and i think that's the manifestation that's coming here we are in a position where labor does not have an offer from uber and coinbase those companies are getting smaller static team size as alex and i have been saying for two years now almost you don't need to add people you just need to use the tools and you will get 30 more efficient a year whether it's coding, sales, et cetera.

39:45So here we are. You need to get your butt in gear. And if you're a young person, get into office. And if you're running your company and you're raising venture capital, or you're a venture firm, raising your next fund, part of the reason I'm getting everybody back in offices, I want to have an easier time raising my next fund. When I raised in the last fund, they asked me, are you in person? Literally, I would say four out of five LPs asked me that. so they believe in in-person culture uh and now what am i doing here every tuesday in austin we started in-person tuesdays with founders we're inviting our entire portfolio to come every tuesday 48 tuesdays a year to get mentorship to come to talks to have lunch and to do jam sessions with us why we we want them to win that's it's as simple as that folks you know if you want to win and you're up against a company a remote company up against an in-person company the in-person company wins nine out of ten times.

40:39Okay, let's, I think we have office hours. Yeah, we do. We do. So today we're having Fusion ads. I think it's time to forget talking about models and frameworks. Instead, let's talk about how AI is actually meeting the road today. And in this case, we're talking about a marketing context, Jason. So please welcome Evan Graj from Fusion ads. Evan, welcome to the program. Can you show the audience what you're doing or does it exist as a product yet or are you still in the laboratory? Oh, no, it exists and we're generating revenue. We can show it. Yes. Okay, great. I think, you know, sometimes a picture or a video or a tour is worth a thousand bucks.

41:14So show us what you're working on here because it is really interesting to think about the promise of AI ads. I saw LinkedIn co-founder Reid Hoffman talking about how so much consumer surplus has been created by Google Maps. They said something like$3 ,000 per person who uses Google Maps, and that wouldn't exist as a consumer surplus if advertising didn't make it free. So here we go. Can you guys see my screen? We do. Yes, sir. Great. So remember, most people are listening, so describe what they're seeing. Yeah, perfect. So in short, Fusion Ads is basically a marketing AI agent that increases revenue for small businesses by instantly generating like professional ads that improve return on investment.

42:04And so what I'm showing here is you've already registered, you've logged in, and this is the home screen of the backend. And what I think is the easiest thing to describe is that when you come here, you simply ask to put in your URL or put in Athena. Wow. um well i have some campaigns that are ready here so i think it would be several steps if we just put in a in a url but yes we can do that i like a live demo better bummer well this is a live demo it's just we set up a campaign so no i know but seeing the actual creation of an ad for something would be better but okay well we can do that next i mean here i wanted to quickly because basically you have to ask answer a few questions so what the questions that you need to answer is like what are you trying to achieve?

42:52Do you have an image for the product you're trying to sell? Tell a little bit about who your customers are. Okay. So male, female, this age group, and then you entered here, ensure your home or business runs smoothly. Let's just read that, the prompt you gave it. Ensure your home business runs smoothly with our top tier plumbing services from routine maintenance and leak repairs to complex installations and emergency assistant, are certified plumber. So you're giving it like a prompt about the business and what you're trying to achieve. Yeah, I mean, if you put in a URL, we'll scrape everything from a URL and then you basically refine it to be like, yep, this is what I'm trying to sell.

43:29So it might've pulled that copy from the plumber's webpage. Exactly. Ah, okay, even better. So you don't have to write the prompt. And we can do that test that you said, just right after this one. But so basically then you select what channels you're trying to advertise. So that would be Facebook, Instagram, Twitter. Yep. So the free channels of, you know, using your own existing social media or the paid advertising channels of meta, Google, Instagram, Google search and Google display. Or we even generate SMSs and emails for you to send. And that's your own thing. Yeah. So after you do this, you generate some designs and it will ask you some questions.

44:08So I'll say no, just because it's already here and it instantly generates ads for you while we're waiting. Are those, okay, so now we're seeing ads that you might see in Instagram for keep your plumbing flowing smoothly. It put the logo, because we're going a little too fast here. You're seeing the logo of the company at the top. There's a hero image of somebody working on plumbing. Is that hero image an AI-generated image? Yeah, so it asked, do you have an image? We answered no. If you do have an image for the product or we scraped it off of your catalog, then you would already have the image there.

44:41um so these are ai generated images they're a person working on a sync and then it's up to you to make sure you approve it that it's not like a weird picture right correct okay and you see well i had clicked add design uh while we were just talking and it immediately added a new ad as we can you give it feedback on option l and say like um i noticed it's all white people one white woman two white men can you say give me more diversity in it or like i'm advertising to a different community uh you know that that sync is too fancy give me like a more a more popular sync right yes exactly right so um here you can click edit and you can go into like a you know canvas style editor or a manual editor yeah got it um and then uh you can also open up like the chat prompt on the right hand side which is more like you want to just give it unstructured feedback exactly like you just said like a prompt give me more diversity uh replace the image with someone of color uh rewrite this ad in spanish um and whatever other you know, free text format that you want to give.

46:03Right. And you tell it geographies as well, because that would be a very interesting thing. If you said, I'm doing this in Brooklyn, and it said like, oh, downtown Brooklyn or Sunset Park or Bay Ridge, you know, you could actually maybe even think about what the home cost is there. And then, you know, one group could have Kohler faucets, the other one could have, I don't know what the most generic one is, Like it could really start to do interesting things. Yeah. Yeah, exactly. So when you put in your website, then we got what your address is and we know where you sell your products. So that the, the geo targeting that you're referring to, it's behind the scenes because we already know you have a store or you sell online if you, and then who your target demographic is, you have a store.

46:50we know to geofence the paid ads within you know 50 miles of that particular store amazing um and then what i'm showing you is the ux but what will be uh launched next week is more of like just a chat and you can come in in a very unstructured way and chat with uh the agent just like you would chat with a freelancer that you hired on fiverr or your agency and it will ask you whatever questions are missing in order for it to generate a best performing ad. Now, you have the ability to do many ads. If you go to the Facebook ad library, for example, you can look at Calm.com and they're really good at advertising or FitBot and you can see many different ad styles, many different tests that they do with humans.

47:38um but here can you just have the ai change my ads every six hours and spend 10 bucks on each one without me interfering and let it rip or do you should i not trust it yet uh you you cannot it's not 100 done for you um i think the next round that we will uh that we are seeking is specifically to scrape the 13 million ads that are publicly available on Facebook and Google. And those will guide the agent that we have in our AI to produce better, best performing ads for a given product, geography, market, and industry. How is the business going? Tell me, what are the challenges? Any blockers? So we can do a little office hours here and people can hear an investor and a founder talk about the challenges and how we resolve those challenges.

48:42So traction is good. We're about 16 ,000 MRR, which is plus 30%, 34 % month on month, up 143 % since January. We spent a lot of time on product market fit in targeting small businesses. I think the main challenge for going after that segment is that even though you give them tools to create their own ads, they actually don't trust themselves that whatever ad is created is good enough. So they want to outsource that to an agency or freelancer who's telling them that it is. So that's a bit of a behavioral change. And the solution to that is the done for you advertising loop that will close so that when we do put the ads live, we are A-B testing.

49:34We use the performance results in order to give the agent back the feedback, and it will automatically take that into consideration. So what's the question then? I mean, I understand the challenge. Is there a question to it? Or do you want just me to riff on it? I think riff on it. I think we would love to hear how do we get more customers, what to best go to market. So you have to meet your customers where they are. You're doing something incredibly innovative with a group of people who are neophytes and are scared. So you're like Canva, like Canva was a product for people who didn't do graphic design.

50:08Let's pause for a second there. It's the number one graphic design tool in the world. And they made a tool not for graphic designers. What they did was they induced a market to exist. Right. So there were people who wanted the output of graphic design, but they didn't want to learn Photoshop because once you start doing layers and all this stuff, it's like, okay, I don't want to spend 100 hours doing this. I just want to make a birthday invite. My daughters, nine years old, my twins, all they do is go on Canva and make me funny things, constantly print them out on the color printer and bring them to me.

50:45It's hilarious. So I think you might be in the same boat. You're a tool for local advertisers, small advertisers, medium-sized businesses that don't have an agency, can't afford an agency, but they want this. So the tool's not ready to do everything. It's 60 % of the way there. And that's not your fault. You're in an innovative, you're skating to where the puck is going. So I have an idea. Why don't we include in the price of the product human review? So when Grammarly first came out, you know the program Grammarly? Yeah. It was a button in it because they were selling it to people who wanted proofreaders, wanted an editor.

51:24that said, pay for a human review. And then they had a bunch of freelancers. Look it up, Alex, for me, please, if you can find the page that does that. I don't know if they still do it. And I thought, well, this is interesting. I almost used it because I was like, yeah, I'll pay 10 cents a word or it's like five cents a word. Okay, it's a 500 word article and I'm going to pay 10 bucks to have reproofed. Why wouldn't I do that? And you could do it right in the product. Get a human review of that. So here's what I want you to test. tell them what is the product cost right now ballpark small business is 199 a month perfect so it's 199 a month with two hours of human review included and each additional hour of human review is 35 an hour and you can talk to that person on chat or whatever and then i want you to hire a person maybe if you take a loss to do the human review and when you after they do everything they say, click here to get human advice.

52:22And it says connecting you to a human, and it could be you or other people. And then you do that piece for them. And you call it like, you make a couple of personas, pick which persona you want. This is, you know, Johnny B. Good, who does B2B SaaS, you know, who does enterprise stuff. This is Susie Q. Susie Q is really good at local businesses. There's another person who's great at restaurants. And you say, pick the reviewer you want. and you make five personas and you say, this person's 35 an hour, this person's 45 an hour, this person's 60 an hour, and then done. You're a startup. You got to get people over the finish line.

52:58So when I had a company, density.io, you can look it up. Density.io was doing installations of people counting machines. And it was just always a blocker. Who was going to install these machines and how would it work? And they just started incorporating the installation in some cases into the purchase price. Then they started charging on a square foot basis because it was too confusing and there was too much friction. So you have a little bit of friction right now. People get 80 % of the way there, but they're scared. So you can just manually do it until they can do it. They might say, you know what, I can do this myself now.

53:36Because when you made the ads better and you said, oh, I want some diversity in the ads. And there's six fingers on that person's hand and, you know, maybe we should do more specific brands of plumbing items. You know, you can, they'll be like, I know how to do that. So you kind of tell them, here's what we did. We checked X, Y, and Z. We checked this and you have like a checklist. Read the book Checklist Manifesto. Shout out Checklist Manifesto. You do a checklist of what humans check. So we check the spelling. We check the image. We checked for offensive material. We checked for crisp communication.

54:09We checked the call to action and we changed the call to action. It said book now. We said learn more. So we want you to test learn more instead of book now. Get the idea. Yeah, the latter we do, the former we don't. I like the idea of adding the human touch into it and including it in a bundle. And that gets over the fear that, you know, what if the product doesn't do X, Y, Z, and I at least want to talk to someone and then they get reassured and keep going. I think Paul Graham wrote Do Things That Don't Scale. I think there was an essay he did, Do Things That Don't Scale in year one. And then you figure out how to scale them, if that's what people want.

54:48Did you find that Grammarly thing by chance? I did. So notably, and this was to my surprise, Jason, it was called the Expert Writing Service, and it was discontinued January 31st of this year. They kept doing that for that long. I thought you were actually wrong, to be honest. I'm like, they don't do that. I've never seen it. Turns out, I was wrong. So yeah, that ticket killed off. And Paul Graham's Do Things That Don't Scale essay came out July, 2013. We'll have that in the show notes. Okay, great. So Evan, I think that's what you do. And how many unique customers do you have using the product right now?

55:22About 9 ,000 right now. Okay, how many are paying? Oh, I need to look it up. Yeah, so some fraction of those are users. I would suggest no users, only paid. right now we do seven day free trial and then it converts to paid after seven days that might be okay um you know maybe like it doesn't let you publish or whatever you can you know do the ad editor and then they can like take a screenshot of it but they can't maybe they can get up to a certain point in it and then it pushes them to pay but you might want to get more people on the phone and instead of going for the vanity 9 000 number maybe we go for the velocity of paid customers.

56:04And then the understanding who our ideal customer profile is and the quality of the revenue. So, hey, we had a thousand people asked to do a phone call and onboard this month. We're literally getting 30 people a day. We're onboarding 10 of them based on their needs. We tell them it's good for them. And then of those 300 that paid$199 a month, then you got a real business. So I almost feel like you need to understand these customers more and why they're doing it. And you might be falling back on the trap of the high number, the big number with a comma in it. I would much rather see you have nine paid customers right now using the product and getting value than 9 ,000.

56:49And we're not sure if they're actually getting value. And then I'd like to see the nine every month double. So nine to 18 to 40 to 80. and then you're going to learn as an organization what you need to staff that level of customer. And you don't need to be efficient. They don't need to be profitable right now. You could be losing$200 on every customer as long as they're using it and getting value. And that's really where I think really high quality investors like a Sequoia or a pair VC, whoever it is, they're going to look at your engagement stats. They're going to talk to your customers before they invest.

57:27so you want to have 10 reference clients that just shut up about this okay makes sense thank you all right well done uh great job evan and uh hopefully i will see you in austin for barbecue soon come see lon and myself and jackie in austin and the team we're going to be doing founder tuesdays where are you based i'm in tampa and i do need to go to houston so um perfect you're not that far from Houston. We're doing Founder Tuesdays at the office, so Startup Tuesdays, Jam Sessions. All right, great job, Evan. Thank you so much. Great to meet you, y 'all. Thanks, Evan. We're going to quickly talk about Founder Fridays, Jason's favorite thing in the entire world.

58:06We have, Lon, a very special matchup. We do. We're throwing you a little curveball here, Jason. We've got our final four. Just as a reminder to everybody, Osprey from Houston, Texas, MedSimple from Florianopolis, Brazil, Taktoon from Yerevan, Armenia, MomSub from Chicago, Illinois. But Team Launch, like so many of these companies, they came to us and they said, hey, we've got two companies. We want to give them a second chance. We want to do a wild card round and end up with a final five, not a final four. So we are we're going to we're going to do it. We're going to we're going to go with it.

58:45We're bringing back two of our favorite two launches favorite. Then how do the five then go down to? Don't worry. We've got a whole plan for how the final five, we're going to pick a winner out of these final five. But first for today, here is our wild card second chance bracket. Burble from Philadelphia versus Arcana from Los Angeles. Okay. Let's start with Burble. Let's pick where we're going to start with Burble. Just as a quick reminder to you both, this is the wellness app. They use hypnotherapy to help you modify your behavior, improve your outlook, and change your life. Here's the picture of Verbal.

59:21It's the real thing. Hypnodamble is real. Yeah. I'm Alexandra, the CEO at Verbal, and our biggest need right now is money to market Verbal. We plan to spend$50 ,000 a month in paid advertising, PR, and partnerships. You asked about our two-year plan. Well, here are the numbers. Year one is about laying a solid foundation to build upon. That's why we're investing in people, process, product. Year two is an exciting year. We turn a profit. And how do we do it? Because we leveraged what we did in year one. By year five, we're looking to implement our exit strategy because we're so profitable that people are going to want to buy us.

59:57In fact, we have fee-to-feet, grants, wearables, VR, AR, and we're available in every language. Okay, I hate the last part. You never, big mistake, big faux pas in startup land is to say you want to exit early. That means it's not your life's work, which I think it is her life's work. So that is a bit of a tell. sell we don't want you to sell we want you to go public and this company to exist for all times what companies do i talk about all the time i talk about robin hood i talk about uber they're not going anywhere folks those companies will be around after i'm gone that's what we're looking for so a little full power there at the end but i do like her energy uh and i do like the space and i think people will pay a lot for hypnotherapy because you can do things like quitting smoking or hypnotherapy for birthing classes or losing weight or getting off drugs and alcohol or a gambling addiction.

1:00:48Or folding pre-flop or not folding pre-flop enough according to the Million Dollar Cash Game and Alan Keating's hypnotherapist. Absolutely. Alex Keating, my friend, started doing hypnotherapy because he was playing too many cards. To improve his poker game. That's wild. He did it like the days before and morning of and it really impacted his play when he won big because he was playing too many bad hands and didn't have the ability to fold. And so they did hypnotherapy. Fold. You have jack five. Awesome. Fold. I mean, that's crazy that it can have that kind of a subtle impact on your thinking. You know, like quit smoking or something.

1:01:28That's a big daily habit. But just I fold too much. Don't fold enough when I play poker. It's very specific. Ghost is enough, Lon. Don't need a third taco. That's what I need. Get a medium pizza, not a large. Alex, don't need to read the NQ. Like, Nicola, that's going out of business. You can't stop me. Just get a metrodome. Okay, give me the other one. Lightning round. We're going back to LA, my old hometown in Arcana. These guys have developed a method by which developers can integrate relevant text ads into their AI outputs. So let's take a look at their page. Ooh, I'm loving this. Hello, you're Arcana, a content-based ad-serving platform for Gen.AI and Vert.

1:02:17Let's start with a quick demo. In this demo, we see Arcana seamlessly integrate contextual ads directly within the response generated by Gen.AI application, creating potential to monetize every LLM interaction. We think Arcana has a bright future ahead of us, especially the next two years. We're going to expanding into agent-to-agent services, add placement beyond the Gen AI space, and expanding the points of contact between the advertiser and the end user. Overall, the results are simple. Increasing customer engagement, and end user time on app, all while increasing advertiser points of contact and experience.

1:02:55Overall, we're confident. The future is bright. And we think, in all honesty, this is just the tip of the iceberg. the same way they Google and double-click, expanded, did the massive pipeline of online content. We believe this is the first step to doing something similar. Thank you. All right, man. If these two lunatics will go to an office instead of working in their studio apartments, this is a real winner. I would invest in it. If they can get into a war room with the three or four people who are working on this and a sales person grinding it out, I love this idea. I've been saying this from the beginning.

1:03:29I think Google's got a bright future in advertising with Gemini if they choose to take it, which is as you're reading your results, they did it aggressively, highlighting words in the results that hit the relevant ads. That could work. Or I was literally talking to Sergey Brin at the All In F1 event. He was our surprise guest on stage. And I said to him, like, why don't have in the sidebar a running list of ads and offers for me based on all of my queries? so I'm doing a query about F1 and it's showing me hey F1 tickets, F1 merchandise F1 subscription the number one book for F1 and it's just they could fade away every 10 seconds they fade away unless I say don't fade away and I pause it so they just run in I think there's a huge future here I like hypnotherapy, I love the ads in language model, I'm going ads in language model for my wildcard choice what have you got Lon?

1:04:26uh you know not to make it uh not as exciting but yeah i i'm i'm with you 100 i think arcane is it's an amazing concept it's an amazing product like it makes so much sense when you see it like of course there's so many interactions that are happening we've been talking about it all episode there's so many ai interactions happening constantly every day and it knows so much about you the ai is learning so much about you and what you're looking for at that's part of how it works. So of course it's going to learn how to market things and sell things to you. What do you got? Love the verbal video. Have to make it 3-0, however, because I recently talked to Profound, a startup on the Twist 500.

1:05:06They're doing search engine optimization for generative AI. They call it GEO. Anyways, I just got to dive into this market, how big AI searches and so forth. So to me, there's more money to be made with Arcana. I got to give it to them, even though I will say maybe point the camera down so we don't see your whole closet in the background, but you know, It's all good. Get your butts in an office in Austin. Get an office at Capital Factory next to us. And yeah, you might get a$2 ,500,$2 ,500,$2 ,500 check from us. Great job, everybody with the wild card. So now that we've got five finalists, here's what we're going to do next.

1:05:37We're sending these five companies to the launch investment team. They are going to apply your rigorous method for evaluating the potential of startups, including answering the two key questions. Why will this succeed? and why will this fail? Based on those responses, we're going to pick a top two. They're going to come on This Week in Startups Live. Love it. Face off. And that's how we will crown our chain. We need to do a summer tournament of this. Get everybody who is in Founder Friday stoked about it. Yeah. And let all of our portfolio companies know. And let's learn from this one what worked, what didn't.

1:06:17And let's do the Summer Startup Cup here on This Week in Startups. The twist prize. Twiss Cup, Founder Fridays, Finals. I don't know. Come up with a good name. And we will see you all next time on This Week in Stardust. We call it Twiss. Bye-bye. Bye.