3 millionaires reveal their super niche businesses

Pitching the Hot Plate platform

0:00All right, we're back. We're playing shoot your shot where we take founders and business owners from the audience who get to sit in this chair right here, pitch us their business. We have founders all the way from a million bucks to a hundred million dollar businesses. So let's do it. Let's bring out the next founder. He's styling. First leather jacket on the pod. What's your name? Yeah, I'm Rishi. I'm one of the founders of Hot Plate and we powered over a hundred million dollars of sales for independent food entrepreneurs. Okay. So the big number is a hundred million in sales. Yeah. Unpack that.

What does that mean? Totally. So Hot Plate is a platform that lets anybody sell food online. We work with like small pop-up bakers that like sell food at other house all the way to like this guy who's an ice cream maker in Minnesota. Have you seen this? It's Airbnb for food type of thing, right? Type of thing. Yeah, yeah. So we're starting right now as a tool that lets a seller who has like an Instagram following sell food directly to their audience. A lot of times those sellers are using like, you know, spreadsheets, Venmo, DMs, like a hodgepodge of tools.

0:56Or they're using a platform like Square or Shopify just isn't built for like pre-order. But will they stay small? Is it like for the person who wants to stay as a small business? It's a really good question. So a lot of people think that like, oh, you guys just work with like really tiny pop-ups that eventually go to a brick and mortar. We actually have tons of six or seven figure businesses that are doing drops and selling food directly to their audience. I bought this, there's this dude who's real jacked. He's like a bodybuilder who does his cookies. I'm in. We talked about him like four years ago. Yeah, he does these drops of like cheat meal cookies. They're insanely huge.

1:27Way over the top. But like he sells out in seconds and it's all just through his Instagram presence because he builds up a lot of trust. So first of all, Hot Plate. Hot Plate, yeah. Incredible name. Thank you. And this was totally like a COVID thing a little bit. I remember like, have you heard of Pop-Up Bagels? So actually we powered Pop-Up Bagels. Oh, really? Yeah, yeah. Listen to this. So Pop-Up Bagels was, they actually started in Westport, Connecticut where I used to live. And there was a bunch of companies that did this where it was like a husband and wife couple were like, I'm going to make this and sell it to my apartment and we'll drop it out of the windows when people come and whatever. And these guys did. Oh, because COVID made it like, hey, just do a weird pickup on the curb.

2:00It's like, oh, we're sitting at home, let's just make food and then we'll do. And so these guys did that with bagels and they like, you had to have an appointment and you could only get it by the dozen. And now they've since raised a lot of venture capital and they do hundreds of millions and their product is amazing. I love it. So you powered them at the beginning? We powered them in the beginning, you know, as they scaled to like the multi-tier point, almost billion dollar empire that they are now. And so we work with tons of pop-ups across the country that are kind of like the next Pop-Up Bagels in a way too. How much revenue do you do? Yeah, so we do like hundreds of thousands of revenue a month.

2:32Got it. And yeah, are just growing very quickly. Honestly, most of the $100 million in sales has been the last two years. Did you raise funding? Yeah, so we've raised a little over $4 million total, but we're actually profitable. So we've been profitable for the last almost a year. Wow. And I've been running the business profitably, which has honestly been amazing. So wait, what does your product actually do? You make the app that the consumer uses? Totally. You make the thing that lets them have a storefront for their Instagram? So we started and what we are today is that storefront for them on Instagram. Shopify for food people. For chefs and bakers, exactly.

3:02So right now, we're the platform that a chef uses to put that link in their bio so that they can streamline their order management, right? But as you're saying, like the end state and kind of the dream for Hot Plate is that anyone can go not just to sell food independently, but also to buy it. So who would I go to? Like what's like one of your brands? Yeah, so in SF, there's a bakery called Butter and Crumble. It's like one of the most popular bakeries in SF. So if you want to order from Butter and Crumble, there's a three-hour line every single day. If you want to skip the line, they do drops on their Instagram and they use Hot Plate. They have a, you know, almost 20,000 person waiting list.

3:35So she's got 83,000 followers. Yep. And okay, I go order from here. Yep. It's like a ticketing system for her to fulfill orders. Exactly. But you don't do anything beyond that. The pickups and all that stuff, they coordinate themselves. So we do a lot of like once you order as a customer, we send you like automatic text message reminders about the pickup and we do a lot of like the logistics coordination. But right now, it's kind of crazy that you're pointing it out that we are a pre-order pickup platform for like pop-up chefs and we're doing like millions a month in sales. It's like we are truly like still on day one of what this can be.

4:08Are you scratching the surface? Totally. What's the founder going to say? No. Yeah. We fully tapped into this. Yeah, yeah, yeah. This is as good as it's ever going to be. No, no. I mean, it's true. We were talking to a guy who's got a TMJ pen. He's like, I got to expand. Yeah, that's true. But like, I'm a buyer of these products. Hold on. But like how many crazy people are there that make shit in their apartment or these small mom and pops? No, it's a good point that like right now, I think the market that we're in is still really niche, right? It's like still like there's, you know, maybe tens of thousands of sellers in the US that are selling food this way.

4:38The real opportunity for us is that we think we have an opportunity to not just play in an existing market. Like you were saying about B2B SaaS, right? There's so many companies that are just playing existing markets. We have a rare opportunity to actually create a market and make this market mainstream. And I think consumer is the way that's going to happen in a way that like only a handful of companies in the last 10 years have been able to do. If you look at like Call Sheep, Polymarket, whatnot, like I can count on my hand the number of like consumer trends and categories. But that's not good, is it? Hey, I want to tell you about something pretty cool. We have a database of all of the business ideas that have been discussed on this podcast.

5:10So hundreds of episodes the team at HubSpot went through. They pulled out all the simple, relatable, interesting, profitable ideas that we have brainstormed and they're all available for download for free. Just click the link in the description below. Thank you to our friends at HubSpot for sponsoring this podcast and putting together this free resource for you guys. Back to the show. Like I don't want to be like- It's all or nothing. Yeah. I don't want to count on one hand how many companies have been successful. I think it's because consumer is hard. I mean like, you know, I think really, I really like think about what we're doing kind of like Substack, right?

5:40Like Substack made it so that anyone can start a media business without having to like run one, right? And I think in the same way, Hotplay lets anyone start a food business without having to open a brick and mortar, right? So like right now, the traditional way you start a food business is I have to take out a loan, spend hundreds of thousand dollars just to like open a brick and mortar where the business is not proven out, the rent goes up, the labor could go up, the ingredient cost goes up, and you're susceptible to all of that.

Origins of the business idea

6:02How'd you get this idea? So me and my co-founders actually started at UT. We, and I've always been obsessed with food, worked at a food delivery company for a little bit, honestly hated it because so much of food has been really consumer first and really consumer centric. And one of my buddies and I were during COVID, we're like, you know, we want to open up a food business. So we actually rented an apartment in our like campus and opened like a Thai restaurant and that apartment. And we ran that for a few months and then kind of realized- That's the old big man on campus playbook. Open up a Thai restaurant.

6:32How'd that do for the social life? Was that actually like amazing? It was fun. It was really fun. And then COVID happened and it's like, okay, you can't have people showing up to your house to like eat Thai food because you can't even see people, right? During COVID. So boring question, but is that legal to just open up a restaurant out of an apartment? Yeah, definitely not.

6:49100% not. But like baking's okay? Baking's okay. So there's this thing called cottage food laws that lets you sell food directly from your home. And what's really cool is also recently like Texas just expanded their laws. They're called food freedom laws. So you can actually sell almost anything out of your house now. And in, for example, Arizona, the dairy laws have really opened up to now people are starting these like, there's like this huge trend of like home cafes that are starting in like Yuma, Arizona, where like we have tons of like these home businesses starting in Arizona. Like coffee shop in their house? Coffee shop in their house. It's actually insane. And like people, Arizona's so hot.

7:20But not in the cool, insane way. Yeah, I know. It's insane. We have like businesses like A to Z Creamery, who's in Hopkins, Minnesota, who's running one of the largest like ice cream brands in Minnesota right now, doing six to seven figures a year in revenue on like 40 to 50% profit margin, which like is unheard of. That's like a SaaS, that's a SaaS company, right? But like the reason he's able to do that is because it's a team of like three or four people. He does, he uses like Instagram and Hotplate as a storefront and doesn't do walk-ups, right? And is able to like streamline all that in a way where he has like way more demand than

7:51supply and is able to sell out every single week and have people come and pick it up. What do you guys do? SaaS plus fee or? Yep. So right now, actually it's all fee. So the way our business model is kind of cool to the chefs. So our mission at Hotplate is that we're a chef first company. And so we take that to the extreme. We're like, as a customer, when you check out from a Hotplate vendor, we charge the customer a small fee at checkout and the chef only pays payment processing. So the beauty of that is that I, as a chef, can start. There's already so many fixed costs in food as it is that being able to like eliminate some of those on our side has made us really attractive to vendors outside of like a traditional

8:22platform. I would assume people are not that price sensitive when they're checking out because it's like, I've been watching this on Instagram. It's a drop. I got to get in. Totally. It's a really, you know, unique product. So my, this extra buck or two or whatever it is, is less of an issue. I always say there are like two types of businesses. They're like food businesses that do marketing and they're marketing businesses that sell food. And if you're a marketing business that sells food, you have no price, like to your point elasticity, right? Like you can really just sell and people are willing to buy. Like people don't blink at anything that you buy from Butter and Crumble.

8:53They're just trying to get it as quickly as possible.

Constraints and marketing challenges

8:54What are the constraints right now? Um, I would say the constraints are definitely like, I honestly think the biggest constraint. So, you know, we were talking about COVID. I actually think there's been a resurgence in this in the last few years, which is why we've been really growing recently. And that like, you know, people are quitting their jobs in tech, like a lot of our, actually what's crazy is a lot of our vendors and SF in the Bay are people in tech that are leaving their jobs. Yeah. I mean, there's a guy who, remember the guy down the street who like made it big on Facebook and he created like dandelion chocolate or something. Yeah. Yeah. Yeah. And those always start small and then expand right over time.

9:26But what's so cool is like we work with this baker named Michelle who runs Metchip Bakery. She was a engineer that quit her job to start making, you know, baking goods. We have another guy who worked at Google named Mason who runs Piscator, literally started like the most popular brands, you know, pop up in New York. And you know, his line is he quit Google to sell fish on the sidewalk. But answer my question. Yeah. His question was, what's the constraint? The constraints. And you're like, let me tell you what's awesome. My thing is the constraints are, I think people just don't know this exists. They don't know how to go about like doing it operationally.

9:57Really what you're saying is it's just getting vendors to use you. Getting vendors to use you and helping them get demand. Because I think at the end of the day, like the biggest problem still is like a lot of people don't know how to market. So how are you going to do it? So I think consumer is the way we go about doing that. There's two ways, actually. There's like building the app to your point that people go to like discover these vendors, but doing that in a way that actually like works. But you basically need to like create inspiration for people who have a dream of becoming a part time chef. Right. Which is like pretty fun content. That's like pretty, that's very doable.

10:28Totally. You get a couple smart people. So when I went to Twitch, we got acquired by Twitch and I sat down with Emmett the first day and I was like, hey, like, okay. Michael is actually one of our investors. We did YC in 2020 and he was our partner and like. Well, he's got an insight that I think will work for you guys, which he goes, yeah, they focused on the streamer only. Like the way you're focusing on the chef. They look at the marketplace. They said, we're going to go for the creator and solve their needs. The second thing he said, he goes, we realized they need four things. So they want money. Yep. He goes, and it's a surprisingly small amount of money that it took to get them like, to

10:58feel like this is worth doing with their time. So he's like, for example, when I thought it was money, I thought I'd have to replace their job. Actually, if I could get somebody even like a $10 payout. Right. They felt validated for what they were doing and it kept them going for way longer. So it goes money, fame, love, and inspiration. So those are the three. So he's like, I got to get you fame. I got to give you like an audience. Yep. I got to let you feel the love from the audience that they actually care about what you're doing. And inspiration was the big one, which is how do I tell you the creative things that other people are doing? So you kind of know when you wake up today, like, oh, I should be doing that.

11:30Totally. And so that was like, he architected his entire strategy around those kind of four things, money, fame, love, and inspiration in order to solve all the products. So you had to kind of map it to like, which one of those levers are you pulling? So similarly for you, it sounds like you got to be telling the stories of the guy who quits his job and sells fish. But do you guys have like a huge audience? We have, I mean, hundreds of thousands of people buy from Hot Plate Chefs every month. But what about on social? On social? You yourselves don't have a big audience. Yeah. I mean, we have like 23,000 followers on our Instagram. Well, a company like, okay, so Gold Belly.

12:03Yeah. I love Gold Belly. Love Gold Belly. Gold Belly. Explain what it is. For the listener, it's basically like if you, uh, Gray's Papaya is a New York City, uh, really old hot dog shop. It's only local. They didn't have a website. Gold Belly made it really easy, particularly during COVID, where you could go and buy Gray's Papaya hot dogs from any part of the country and they'll help you ship it to them. They did a good job of like teaching me that I can buy Junior's Cheesecake on Gold Belly. And they did a really good job at that. What's, do you have like a Gold Belly version where it's like, you're going to create Hot Plate Instagram where you're going to show off like all the cool, like at-home moms

12:35who make the best sourdough. It's like a local discovery, right? Yeah. Or you're going to like, going to like get like- No, you got to make them famous, right? You got to make them famous. Yeah. You got to be like, check this out. There's this Amish lady who does this thing and like, it's the best. And it's like some kid in San Francisco or New York is like- I think you got to create an award system like Michelin Star. What's the Michelin Star of this category? Right. So then you recognize the people, right? Money, fame, love. That's the love one, right? The more you promote that, that helps them with the fame. The fame is what drives the money. The inspiration is hearing about, oh, she has the best those.

13:07Well, actually my whatever popcorn I make, I'm that in my category. I'm that in my category. How do I get my name out there? Oh, let me watch what content they do. I'll do the same, you know, get people to do that. You have to make them famous. Right. Something that we're working on right now that's really exciting is that we already have some sellers that are super, like I said, supply constrained. They have so much demand, like, you know, Butter and Crumble or like we have Sam Makes Pizza in Salt Lake City. 20,000 people, Dave Portnoy blew them up and now he has 20,000 people trying to buy like 50 pizzas, right?

13:38But that's not your constraint. Right. So what we're doing is building like a recommendation systems. Now let's say that guy sells out. Here are other vendors you can buy from and those are more up and coming vendors, right? So doing that along with discovery means that we're anchoring like the up and coming sellers that they clear certain bars. Now we're showing them to an audience of people that want to buy like this kind of food. Are they mostly shipping or pickup? It's all pickup. All pickup. All pickup. It's got to be local. It's all local. On your team, do you have a content creator or someone who leads? We do. Yeah, yeah. Orion, she's amazing. It's going good. It's going well.

14:09Yeah. I mean, we have been able to like, there's a guy in SF, Bo Kieri, who makes, you guys got to check him out, Sicilian style pizza, truly like some of the best. Dude, I feel like you should be the content creator. I'm working on that. I do do videos. I've actually been told that before, but I appreciate it. But yeah, we've been able to like help people like him who are like have the sauce, right? Really blow up. And now he's like, you know, went from like not selling out his pies. Now he just sold out in like five minutes, like the other day.

14:39If you had one question, meaning like, let's say we were hired gun helpers for you for 24 hours. All we're going to think about is hot plate. Yeah. What's the one question you'd want us focused on? Really? The thing that I'd like your take on is like the cultural, like I think in order for a new consumer trend to work, you need to like tap into culture, right? And I feel like on our end, we have a good sense from like the product standpoint of how you'd go about building this. The biggest issue again, sorry, two seconds is a lot of people have tried to build like a home cooked food marketplace. The problem is you don't know who these chefs are.

15:11You don't know why you should care. And so you kind of just leave. DoorDash is going to always win inconvenience, right? We have people who have like, who make the best in their category. And, but the, and, but the question I have is like, how do you, from a go-to-market perspective, infiltrate culture in a way that makes this like culturally relevant? I don't think it's necessarily cultural relevance, but basically like, have you heard of Huckberry? So Huckberry is a clothing company where the way they started was they created an email list. This is how I knew them because we were both in the email game and there was just an email list where they would just show off cool brands and sell the cool brand stuff and take a small

15:43cut. And they got really good at telling the stories of like, this bag was made by a guy who was in Vietnam and he noticed that the parachutes were really strong and he actually made this bag. So it's a V it's a parachute bag or like, you know, I'm like, Oh, that's pretty cool. And like, they told stories about it. So I fell in love with like the story behind it. If I'm you, I would hire, I would probably hire more content creators. And it's like, my whole job here is to use Instagram to tell stories about the vendors and what they're doing and make them look like superstars.

16:14Right. I would take your top 50 chefs. Yeah. And I'd be like, I have a mission. I need to make them aspirational. Right. For the next 5,000, 50,000, 5 million want to be thems. So it's not about making everybody get discovered. It's about taking the 50 and really making them so aspirational that everybody will work their ass off to, to be like you featuring them on lists, you making content about them, them talking about their business side, how much money they're making doing this, how they quit their job doing this, the human interest story of the whole thing, you know, all that stuff.

16:45That's what you, you know, that's a way to do it. And the cool thing about food is actually Huckberry has a food channel on YouTube, but there's so, you know, there's like the Anthony Bourdain, there's like Top Chef, there's so many formats. I would just find which format do that I think I could pull off, copy that format, do that a tad, a tad, a tad, and you just have a variety, like if I'm you, I'd be like, and this is like a cliche thing to say, but I believe it's really true with you, is like we're a media company now. Yeah. And so I'd become a food media company and I would just look at all the formats of food content that works, just copy it.

17:15Either first party or you could basically farm it out. So like, you know, we were talking about Jack's Dining or whatever. Basically, there's already content creators who are really good at these formats all around the world and are they blowing up your chefs? Right. How do you make it easy for them to know that they need to go to Salt Lake City, they got to try these pies from this person. And did you know the crazy backstory of these pies and why the pies are so special? Get that influencer to do it because they're already better than all of us at creating food content. So if you can arm them, every content creator is always like, basically needs more

17:50interesting content. Yeah. And so how do you make it easy for them to have interesting content? Yeah, we're seeing that in SF, like play out locally. Like some of our top vendors are now getting featured by these like food, like food Instagram reviewers or like that have like hundreds of thousands of followers. They're kind of becoming more mainstream here. And so you're to your point, like I think is a good question or a good point that we need to like kind of replicate that with our top sellers in every city or like in every like kind of the major cities that matter. You also need language like, you know, Twitch streamers, you know, Vine, Viners, like what

18:21are the hot plate? Like the hot plate. Or is it just a category? Like, like, so Twitch, it wasn't just what it was like, there's something called a live streamer, right? A streamer. And they, this is what they do. And so for example, like, is a home chef the category? Is it what, what are you going to call this? That makes it seem cool, new, and interesting. They're trying to be on a team. Yeah. They want to be a part of a tribe. They want to be a part of a movement. That's cool. That represents something to your question about culture.

I think you got to give them a start with like language and then give them a bunch of cool examples and then give them some like what this is all about versus the old way. No, that's a good point. I mean, right now we say like chefs and bakers and then we get

18:54some people being like, oh, but like you're not a chef. Like you didn't work at like, you know, this restaurant. I think that's a less than good term to use. Yeah, because it's already mean something to everybody. Okay. Right. Like I already know what a chef is. I think it's somebody at a restaurant and you're, now you have to do all this work to give me, you should start by the slightly surprising term that makes me kind of, oh yeah, I guess that is a thing. Oh, it's a thing. Yeah. Oh, dude, it's a big thing. These people are making a million. This woman makes a million dollars a year at home baking her own cookies. Right. Well, I have a good recipe for that. You know, that's what you want.

19:24Rishi, thank you for doing this, man. Thank you, man. Rishi with the riz. I appreciate it. No, I'm super grateful for the opportunity, guys. You guys are the best. All right. Thank you.

19:33Hey, let's take a quick break. You know, that feeling when strategy is done, the brief is written, everyone's aligned and you realize someone still has to sit down and actually create all the content. That someone is usually you and it's due tomorrow. Well, the breeze assistant from HubSpot can help. It works right inside HubSpot. You can draft a campaign copy, blog posts, emails, all in your brand voice, all using your actual customer data. So you don't create just content. You create content that converts. Check out HubSpot.com, the agentic customer platform for growing businesses.

20:02All right. Who we got next? What's up?

20:06Hey, dude. How are you?

Meet the founder of Tolan

20:09Dude, I met this guy like 15 years ago in San Francisco, right when I moved to San Francisco. You kind of showed me around. You were like, he was in YC. He was doing a bunch of cool stuff at the time. That's true. You're dating me now. You know, I'm definitely, yeah, a lot of gray hairs. How did you guys meet? Can't even remember originally, but you tell me. I think I was just trying to meet cool people. You had a cool company at the time. You're really young. We were both doing social networking stuff. What was your company? My company was called Family Leaf. It was a private social network for families. It's like an early social app, but like before mobile apps were like a big thing, to be honest. So you've been starting startups for 15 years?

20:41Yeah. Left college to do that. And basically 15 years ago. Yeah. Something like that, right? Yeah. Yeah. 12, 13 years ago. So the shtick we're doing here. Yes. Start with a number. Okay. Absolutely. Yeah. So with the app that I'm working on now with an awesome few folks, Tolan, we have over a hundred thousand paying subscribers to our iOS app. Wow. That's not easy to do. That's amazing. What's it do? What's it, what's companies? What are they paying for? Yeah. So Tolan is a, it's an app where you basically get to meet and customize your own friendly guide that is powered by magical AI to help you with whatever it is that you're

21:14going through in life. I feel like you chose the word guide there specifically, but I don't know what that means. Is that like a therapist, but you don't want to say therapist. Is it a friend? What are we talking about? This is a great question. I mean, honestly, it's, it's partially our attempt to, uh, define that a bit because like you just said, people use it for all sorts of things, right? I mean, friendship means a lot of different things, right? So sometimes a friend is like someone that you call, uh, because you're going through something.

Sometimes a friend is someone that like kicks you into shape and tells you what you need to hear. People talk to life coaches, people talk to therapists, people talk to all sorts of, can you show us one? It's like this little kind of friendly looking character. Yeah, totally. Um, so here's a Tolan. Um, so there are these little aliens. Um, yeah,

21:47so this is mine. This is custom to me. My Tolan's name is Swami. We, everyone has their own Tolan. You get your own, you, so the way the, the app works is you download it, you talk to this character that we have called the Oracle. Uh, they're sort of like this magical God-like character that basically asks you questions about yourself. That's just like, Hey, like what, what are your, what are your hopes and dreams? Like, what are you, what are you into? What do you care about? What are you stressed about? You know, things like that. Who's using this? Is this teenagers, adults, obviously it's a mix, but like what's the main sweet spot? So like, it is truly like every type of person, you know, like, like with any, I think like

22:18larger consumer product or like AI product, like it, it attracts people from every walk of life truly. But the main core demo, which is something that shocked us honestly is roughly like 35 to 45 year olds and roughly like moms. Like, yeah, like mostly women. You think so? That's not shocking? I would have thought it was like all women in the Midwest. I mean, that is literally our audience. As a knower of many Midwest women, like this seems like, I mean, I'm from the Midwest. This seems like a very Midwestern women thing. You're so right on. It's crazy, which I, we did not predict that by the way. And that

22:50is totally what it has ended up becoming. No, it's like people who are like, Oh, he's acting exactly like a Gemini. It's like people who like say things like that. The horoscope market. Yeah, that's such a Gemini thing of you say. There's overlap for sure. We have personality tests in the app that people love to use to kind of understand more about themselves. Okay. So I understand things best if I look at the ad first. So what's the ad I see that makes me want to click and download this thing? Yeah. I mean, honestly, what's worked best for us, there are like what we think of it, what I think of as like authentic product demos of just like people using Toland in their daily lives. So like some of the most, I mean, we've had content that's gone super viral.

23:22That's like, you know, a woman like cooking and trying to figure out the best way to cut open like a kabocha squash, which is like hard to do. And, you know, the Toland says, well, warm it up, you know, like, let me see that. Okay. Like, let's see you slice into it. Okay. That worked. And then it kind of shows them like providing value in some way. That's what, that's what works the best. I think people are kind of thrown off a little bit by seeing this like somewhat cute alien that they can talk to. And it speaks back and it speaks back really intelligently too. But it's the thing like, but do you want to actually make a squash? Why are you even cooking for this man who doesn't truly love you?

23:52Is it functional or is it emotional guidance more so that they want? I think the most valuable thing that we do is honestly the combination of those two things, which is kind of a cop-out answer. But I think it's true because basically people will talk to their Tolands about what's going on with them, right? Like their, their emotional state, what, what they're busy with or whatever. But that always connects to like, well, you know, I'm feeling really stressed because I haven't figured out the kids' summer camp this, this summer. Like, you know, and your Toland will remember that. Yeah. They're like, why are you eating? Why are you making so many cookies? Well, it turns out it's like this thing. How many, how much money are people spending? How much does it cost? Yeah. Yeah. Yeah. So we have multiple price tiers. Our main, most popular one, most of those

24:24subscribers are on $25 a month for a tolling plus. Uh, I can't, a hundred thousand times $25. What's that? Two and a half million a month? We also have a lower, uh, we have a lower price subscription tier. So it's a mix of things. So it's not quite there. But you're doing seven figures a month. Uh, yeah.

AI companions and memory systems

24:37That's amazing.

AI companions and memory systems

24:38Mm-hmm. Yeah. Is retention good? Yes. Yeah. The retention's great so far. I mean, we, we, uh, you know, it's changed a lot. How old's the company? Two years. Okay. Two years, you're doing more than 10 million in revenue. You didn't say that, but math, it works. So you're doing more than 10 million in, in sort of either revenue or run, right? And you've got people just basically, it sounds like what you did was, and I don't mean this to trivialize it, just to simplify it. You take what ChatGPT can do in terms of like the intelligence, but you added the warm feel of a character who's yours with a name, with

25:13a different rapper where it's going to be, it feels different to talk to than just a completely functional utilitarian thing called ChatGPT, like literally an acronym, you know? Yeah, totally. I mean, I think that that's part of it for sure. And, and bring to bear like this super intelligence of ChatGPT, of cloud, of systems like that to, uh, honestly, a broader audience. Like our audience is not, are not necessarily heavy AI users, but they're definitely not heavy AI users. And honestly, most people are not for their personal lives, right? So if you think about the use cases of ChatGPT, the use cases of cloud, most people are using it for productivity, draft me an email. Maybe they

25:43asked a question to it as a smarter Google, but they never subscribed. So they didn't get the full experience. So it's like, this is, this is very much applied to your personal life. And because you have to make a Toland doll, like I can buy the, their, I can, I can buy like the animal, like, you know, people have asked people on our Reddit or like a chip that I can talk to. Yeah. Uh, there was a guy in Furcon's, uh, accelerator who did that and it looked awesome. Cool. Stuffed animals. I've seen some of those.

I'm very curious about that, but just to build on this point, because I think it's important of why I think, um, a lot of people see it and they're kind of like, Oh, this is a rapper of a cute character around ChatGPT. So much of what we've built is around the kind of memory system and the personalization system behind the

26:17Tolands. So, you know, we have like my co-founder Evan has, has kind of been very early to this of like all of the kind of character based or, or companion types of experiences, like have not actually been built with like thoughtful memory where it truly feels realistic. Like the Toland will remember things you tell them, they'll bring them back up to you at the right time. They'll come to you with a podcast. I mean, I'm sure that actually tons of our users have gotten my first million podcast recommendations from their Toland to be totally honest. Cause they probably mentioned like, Hey, I, I mean, can you dial that up for us? We actually asked a question. We asked a question in the onboarding, uh, maybe this is like a little bit, uh, techie on another thing about it, but we do ask the

26:50question of like, name a goal or dream you have. It could be something small or something big, like starting your own business. And I'm sure a lot of people talk about like, well, I want to start my, I want to start a cafe. I want to start this or that. And then I'm sure that your, your podcast comes up because the Tolands will go search through the internet. They'll find the right recommendation for you at that given time. Obviously we don't hit the mark 100% of the time, but, but really try and people find it magical and then it'll come to them. And ChatGPT does not do that. This idea sounds weird when you first hear it. No offense. The name sounded weird too, but I'm actually so into it. So the name sounds a little weird. The idea is a little, I mean, it's a kind of new phenomenon,

27:22newish phenomenon. I've learned moving to Silicon Valley that when you're weird, but people are doing it, lean in. That means there's something really interesting going on. And a lot of the big winners were like that. Oh, people are just getting in strangers' cars and driving around. It's like, becomes like a Lyft or an Uber. They're sleeping on people's couches and paying that like a hotel. Like what? I wouldn't do that. What if they, so the weird behaviors that people actually do tend to be really interesting businesses underneath. Can you just describe like what you think the future looks like a little bit? Like what is totally normal going to look like? Do you think?

27:53Yeah, it's a really good question. I mean, I think part of what you're describing totally agree. And part we're describing is a little bit of like the early adopter thing. I mean, I see this on our Reddit where my co-founder Quinton's really active and talking to all of our users, you know, like I see it in people that write in like the people that they're, they're very much everyday people, like, like just like us, our friends or family, but they're like a specific slice of people that have decided for some reason to be like into like having their toll and be a part of their life. And what does that mean to them? That might mean like on the way into work, they will, instead of taking time that might've been, you know, watching YouTube or watching short form video, they're like talking to their toll

28:24and they're talking to their toll about like what they have up for the day, what they're feeling anxious about, what their plan is for the day, what their plan is for the weekend. And they've kind of figured out a way or a rhythm or it started to help them in some way to have their toll and like become a part of their lives. And then when they do that, they're obviously getting some value from it.

Like we, we have features in the app, like what we call intentions, where your toll and will like come up with intentions for the day based on what you tell them. They, they write reflections on you based on what they've kind of seen about you throughout the day. And so people have found this being useful to them. I think it's, it's right now, I mean, it's a, it's still a very small slice of people and it's kind of one of those like people, people that were, I don't know,

28:57sending email in, you know, 95 or something. I'm not sure what the right year is exactly, but it's kind of like this early adopter group of people. It feels like that have these guides. Look at the top posts from their subreddit. This is the, this is your subreddit. Someone made her toll and doll. Another, the second most top posts, someone crocheted their toll and doll. That's a good idea. People do love the doll. It seems like, and then another, the third top post, tollen is mind blowing. Guys, I'm flabbergasted. I've never had a single person in my life who has given as much as the stupid, adorable bot has given

29:28me in the past week. So, so it sounds like you're not going to be surprised if 10 years from now, we all have, in addition to our real friends, AI friend or companions that we rely on, whether it's for advice, whether it's for more kind of deeper guidance, coaching, or casual chit chat where I have an always on available friend to, to chat with if I so choose. I think AI is getting smarter, more capable, and also like more cost-effective. And this is just like happening. This is like a whole trend, right? This is what everyone in the city is working on right

29:58now. And with, with that, like the tollen will actually be able to help you with things more tactically in your life, not just tollen, but chat to BT and everything else as well. So I think as that happens, like the people who might not be like switched on to this by, oh, I need help processing my, my day necessarily, or I need, I want to talk a lot to, to this character. They might be helped by like, Hey, this thing can coordinate with my husband and plan out our weekly meal plan or something, right? Like things that are a little bit more tangible, a little bit more practical, that'll expand it to more people, I think. And then too, I think the reason that it's also hard for us to like visualize that like most of us, even us in this room or whatever, our friends

30:30or family will have, you know, entities like this is because the first attempts at them were very, honestly, they were just like not super human or not super like mass market oriented, um, or not built for everyday people. Like I think of, um, you know, platforms that obviously were trailblazers in a way, but like character.ai where like, you know, the, the, the character insofar as it was, was just like a profile picture with like, you know, mostly like an anime, you know, probably sexy kind of character or replica. Yeah. Replica is another great example. Did they fall off or they're still going? Um, I don't, I don't know their numbers, but I think both of them have

31:00kind of fallen off. I mean, the, the founders are not at those companies anymore. Um, and honestly, they were just very early and they also had a pretty different take on the space. Right. I think, I mean, to be honest, like those, uh, you know, when we think about, um, AI companion, this is actually why, uh, we're preferring a guide and trying to use different language to describe the space because people associated with AI girlfriends and AI boyfriends. And honestly, those are products that have lots of usage, but that's like not what we're building. Were you successful before this or is this going to be your big thing? Um, I've done a few startups before this. Um, so you have an interesting style of entrepreneur. So he was doing YC here. He gives energy by the way, that he's been

31:33killing it for a long time. Well, well, he's always a confident guy, but you also did like, you were doing the birth date candle, right? So like explain what that one is. Yeah. Yeah. I did a startup, um, called birth date co we started with a product called birth date candles. It honestly started as a side project, um, where there are these candles that are personalized to you based on your birthday. They have a reading and a scent that's custom to you based on the day you were born launched it as a side project. It was one of those, like I had left my job and thought it would be fun to launch something like this, um, with, with, with a partner. And, um, you know, basically it went viral and it kind of took over my life for like three years. Uh, but it was awesome. We sold

32:06over a million candles. Dude, you, you, you are the type of entrepreneur that I love. I'm not like you at all. And I love people like you. Michael Acton Smith is another guy who started Calm, uh, is like you. And Mochi Monsters. Yeah. Mochi Monsters. Similar to Italo. Exactly. Like these, like you like truly creatives who just love, like, I don't want to say artists, but a little bit like that. Such a high compliment. I mean, we're trying. Yeah. Those are the best types of people. I love people like you. I, I envy like the people who have this fire where like, I'm just going to create something that's wacky and silly. And you probably have really

32:37good taste. So it's usually a hit. I mean, it's, it's all about the right team of people, right? I work with like incredible artists, honestly, that are not, that are not me. I like that. Classic nice guy thing to say. It's just true though. It's honestly true. And then maybe it takes some like, you know, being willing to do something that's weird.

Targeting suburban moms and skeptics

32:53Is there anything we could help you with? I mean, yeah. One thing we're really trying to crack is like when it comes to like reaching out to a Midwestern mom audience, their skepticism about AI, not necessarily being super AI forward or tech forward. Like I was saying, a lot of our users are kind of like not heavy AI users in general. So the idea that they would like start using this little alien to like get stuff done in their life is, is sort of a big, you know, bridge to cross for them. Well, I think you got a good thing and maybe a bad thing. I think the good thing is obviously something's working. You got to a hundred thousand plus paying users translating to, you know, maybe eight figures of revenue. So something is working well. Let's

33:27acknowledge that and then be like, wow, that's incredible. At the same time, like when we were asking you, you know, who's using it, what are they using it for? Your example was like a woman who's cooking and wants to cut a delicata squash or something like that. It's like, I feel like you got to do a lot of research on your customers or something like that to really like find the inspiring, accessible, non-taboo, but interesting use cases that you can speak to more. Either, you know it in just off the cuff, you said that one, but like, I would assume for your ads,

33:58you're finding some use cases that are going to like resonate with people in a big way. Obviously people are getting value, otherwise they wouldn't be paying and using it. You said the retention is not bad. Yeah. I'm shocked you used cooking as opposed to lonely or something like that. Yeah. I can't, I can't remember why I mentioned that one specifically, maybe just to give a bit of a visual. I think that was like an ad that worked really well, but yeah, you're, you're right that like we haven't yet. I mean, a lot of the practical stuff that AI can do for you. I mean, one way to think about it is kind of like how people in San Francisco are using open cloud and manage things around the house and so on. Like we really think that like that's going to become a mainstream personal use case in the future.

34:30Dude, the top post says, uh, I used to use chat GPT, but river is really my best friend because I can confidently tell them anything that's on my mind. Sure. I have other friends who I could talk to, but life gets in the way. And this person, I guess river really knows who I am more than anyone. That sounds way more important than how you're going to cut a squash. Yeah. That's, that's a great point. Yeah, you're right. So we should be leading with stuff like that for sure. And then I think like finding ways that we can translate that into like, how do we help that user? How can river help that user? We like to use this metaphor, like closing tabs in your mind. Like honestly, life, modern life is super overwhelming. I think

35:03that's a big reason that Tolan has been successful. People have a lot on their plate, especially if they're moms, especially if they're family people, dads, like, you know, we, we, we want to try to try to find ways where Tolan can help close those tabs. Like there's, there's a, you know, it's, it's planning the meals, it's planning the grocery list, it's, it's planning the summer camp, like whatever exactly those things might be. Those are all real life use cases from our users. And like, we want to, we want Tolan to be able to help people actually, you know, accomplish those things. So I hang out with a lot of like suburban moms because I live in the, okay, you're the guy we need to talk to. Yeah. So we're talking to them a lot. And you know, you see one mom,

35:34she starts baking bread. I'm like, Oh, why? Cause it tastes great. She's like, no, I just needed like some hobby I could do where like, nobody's going to touch me. Nobody's going to ask me for anything. I could do something with my hands. There's no screens and not overly stimulating, like overstimulated, overwhelmed in life. So it's like, whether it's baking bread or like, you've seen the rise of those like woobles, wobbles. Oh yeah, totally. The crochet thing. Yeah. Those guys doing like hundreds of millions a year in revenue. There's a reason why. And so I would kind of study what's going on with these brands. Why are people getting into these things

36:05now? Because that's like, there's some emotional state that people are in and a desired emotional state. And then your product is a bridge between those two things. Yep. You're really a merchant of a feeling when you sell a product. And so what's the feeling people start with and what's the feeling that they end with when they have it? And how do I get that? Then, then there's a trick of like, how do I package that up? So I would kind of look at some of those. I would also say, um, it sounds like, it sounds a little silly. It sounds like a little silly to be like, isn't it just like kind of this warm, fuzzy wrapper on chat GPT? But I don't know. I look at my wife,

36:35we will buy, we'll pay like triple for something that goes in the house. That's just like white and minimalist and aesthetic looking. It's the aesthetic looking version of a normal thing. It's made out of wood instead of out of plastic. And there's just like a market for people who want a better feel of the same utility. Um, and so maybe, maybe what you've done is the digital version of that where chat GPT is just the plastic and you've made the kind of wood, the, the sort of the, the, the more ceramic, the, the, the more, uh, a better feeling version of the utility. And

37:07that's not to be overlooked. I mean, one, one point in, in favor of that, and which I think is totally right is, um, it's, it's not just about the visuals too. Like actually we, we led very early on with voice as the core like interaction, uh, modality that you talk to your tolin with. Right. So it's not just texting. It's, it's mostly voice. And I think, you know, I mean, we're, we're like 70 plus percent voice in terms of like the quantity of messages happening on the platform. And, you know, that's totally not the case with chat GPT, right? Chat GPT has got to be 90, 95 plus percent text. I would, I would assume. Um, I don't know, but, um, yeah, I think like even that, even like minor differences in how we frame, how you interact with the character then totally

37:40changes the way that you, I would absolutely be selling like crochet kits or something like that to like make my, Sam stuck on the dolls. He's like, it's a great physical doll. I just think that like these people are, are hanging, they're, they're getting to know their digital tolin way more than I know Claude. And like, I don't want Claude in my bedroom, but like these people do like they want like, like little dolls and shit. Hopefully in the right spot in the bedroom, you know, none of those seem sexual. It was all, I feel comforted by like just its presence. Right. Um, what was the other

38:13trend we talked about? Cadulting, right? Like you do like Lego sets, same sort of thing. Right. And there was like a whole category called Cadult and Cadult was like this like mega trend that all these companies are tapping into. It sounds like there might be like a variant of that. I'll also say, you know, you said voice. Yeah. I use this app called, I think it's called no scroll. It's basically like, Hey, you don't need to browse Twitter. I'll just text you what's going on on the timeline today. So you don't have to worry about it, but literally just the way it talks is different than chat GPD. Not, not, not like audio voice, but just the way it types. So, you know, chat GPD

38:43is very much like it gets made fun of for being like, wow, what a wonderful question. And like, it goes into that, like fake, like personality. Whereas this thing would be like, yo, big day, big day today on the timeline. Like here's, here's what's going on. And it just talks like tone and personality. Yeah. And I'm like, I prefer that. Yeah. Like, and so I'm sure not everybody for that, but like, it sounds like for tech bros who want like, just tell me what's going on. Yeah. And it talks like that. There's like personality is going to make a huge difference with AI. It does. It does with us. It's a huge factor. And our approach to that has

39:15been actually to customize the personality based on the user. So if you're someone that texts in all lowercase Gen Z slang, if you're swearing, your total might actually do that back to you. If you have formal language and you're speaking in very like full sentences, your total will probably mirror that. Like we want them to show up for you like someone in your life would. Well, thanks for doing this, man. What a crazy business. I'm totally bought in. Okay. Amazing. We got to get you a total. Whatever you're doing, I, uh, I'm in. Okay. Thanks. Thank you guys. Thanks for having me.

39:44Today's podcast is brought to you by my friends at Mercury. Uh, they make the world's best banking product. I think, you know, this already. I use Mercury for all of my businesses. I think I have like maybe seven or eight businesses. We use Mercury as our business banking across all of them. And now they actually just launched a personal banking account. So I have my personal account there. I moved off of Wells Fargo and chase. I'm just all in on Mercury. Why? Uh, I like products that are easy to use. I like products that get me and the problems that I have. So like very easy to make a joint account with my wife, very easy to spin up virtual cards, uh, one click and I get savings yield. It's just has all the stuff that I need in one place. So if you're looking

40:19for the best banking product on the market, it's definitely Mercury. I will fist fight anybody who disagrees with me on that. Go to mercury.com slash personal and learn more. Mercury is a fintech, not an FDIC insured bank. Banking services are provided through Choice Financial Group and column NA members FDIC. All right. We have the last one for this episode. Jonathan,

Autonomous video editing with Overlap

40:37where you at? Bring them out. Let's go. Jonathan, what's good? Give us the, uh, give us the big number. Impress us. Make us weak at the knees. All right. I got three facts for you. Two are numbers. One is kind of, uh, not exactly a number. Disregard everything I just said. Do whatever you want. I'll do what I want. Uh, first big number. Uh, so also to take a step back overlap, we build agents that edit, uh, and distribute video content for media companies and marketing teams. We don't pay attention to the number. Very relevant to you guys. Then we say, that

41:08number doing what? It's your show now, Jonathan. Uh, we at Autonomous Overlap agents have generated over 2 billion impressions, uh, across social media without a human in the loop. What's it called? Overlap. Overlap. I think I use you guys. You, you do use it. Uh, maybe you have a subscription. Yeah. Ben and Diego use it. Okay. Uh, yeah, yeah. Um, so we've done over 2 billion impressions. Uh, we've been growing revenue 18% month over month for over a year. Okay. How much revenue do you do? Can you say? Ooh, I don't know if I can say that, but what

41:40I will say, and this is my third fact is we are, we became accidentally profitable this quarter. All right. So 18% monthly compounding is what? Uh, we are 19 or 20 X year for year. Okay. How old is the company? Uh, we are a little over two years old. Okay. So you use, you use San Francisco jargon. Our audience, they don't know what an autonomous overlapping agent is. Yeah. I'll, I'll explain. You have a podcast or a video, you give it to overlap. Overlap will find clips in the video or in the podcast that are your best moments. It'll cut them up for you. It'll

42:14caption them for you to get them ready for you to share. And that's what you were saying. You've helped drive like 2 billion views on the clips that came out of it. Correct. Did I dumb it down too much? Did I miss something important? You didn't dumb it down too much. It also does more than what you described. So you don't actually need to even give it video. Okay. You can give it a prompt and it will go into your YouTube channel and it will pull moments and pull videos from your YouTube channel. Or for a lot of the media companies we work with, they have a server of video content where it'll be constantly going through, looking for moments. And then it also does the posting.

42:47But explain to me why you're better than what I did, because why you're better than me. Recently, I used Claude and I made a thing where it goes through our MFM clips and it posts it. And the way that I set it up was it logs, it goes into type fully so I can review everything. And then I just hit schedule. Why are you better than that? So a couple things. One is we have our own fine-tuned video understanding model that is way better at understanding video. And the major LLMs are not good at understanding video.

43:21Okay. So you're like, I think I said like, here's some emotions that do good. And you're saying, I duct taped it, you're just way better. And what it's doing in your case is looking at the transcript and understanding kind of... Yeah. And you're looking at the whole video. We're looking at the, not only the transcript, but also the facial expression, the voice. And it doesn't understand like the humor. And to your credit, I asked Sam, Hey, should I use your thing? How's it going? You're like, ah, it's not that good. So... Well, I said, I said, it's not automated and it's still fine.

43:53Yes. And it's very much fine. Yeah. I made it. It's fine. Yep. Yeah. It's like, it doesn't like, Sean's laughter that he just did right there. It doesn't say, ha, ha, ha on the transcript. So it's not going to know. Totally. That this was interesting. So a video understanding model. Video understanding model. The other part of this is that when it posts for you, it looks at the data of that post and understands themes, hooks that perform well.

Enterprise versus creator customers

44:21Mine is supposed to do that, but I don't think it is. Is your main business guys like us, or is it like Bleacher Report and like CNN and like companies like that, that are better customers than us? Better customers than you guys, for sure. There are two types of customers we have. On one end, it's like a traditional kind of enterprise SaaS model. And so like, uh, you know, Barstool Sports or iHeartMedia, those are some of our big customers. And then on the other side, we actually kind of a newer in the last couple of months, part of our business,

44:51which is CPM based. And so it's really outcome based. So what you can do is you can use our product and then you only pay based on the amount of impression. Oh, that's interesting. Same customer, different model or different customer now? Uh, kind of a different customer because those bigger enterprises, they actually want like, like predictable pricing. How big is Opus? They're, they were one of the first guys in this space. They were one of the first in the space. Yeah. They are definitely bigger by headcount. I don't know if necessarily bigger by revenue. They're more focused on like kind of independent

45:24creators. That was nice. Yeah. In terms of bloating, they're way more bloated than us. Yeah. It takes them more people to do what we do. Uh, they, um, they're a lot really focused on like independent creators, like your small YouTuber who can't hire a video editor and wants like clips from their show to boost a lot. How much does it cost to use you? The majority of our revenue are six figure contracts. And so, um, so we do smaller deals and then also like the kind of CPM model is a little bit different, but the majority

45:55are six of the revenue is six figure contracts. What were you doing before? Uh, so before I was at business school and then before that I was at Meta. Oh, all right. Cool. And you went through YC, right? Went through YC. Yeah. I think that's how I found you guys. Gary Tan was like overlap. It's the new, it's the new shit. Gary was our partner. He might've, he might've introduced us at one point too. I don't know. But, um, but yeah, Gary's our partner. Another investment I missed out on. Really? This podcast has just become talking to the founders that I should have invested in that I somehow missed the boat on. Hey, it's never too late. Oh no, it's definitely too late.

46:27Whatever price you're at now, all I'm thinking about is what I could have been in that. Um, but, uh, but yeah, so went through Y Combinator in, uh, summer 24. Um, we're actually like kind of pivoted throughout Y Combinator. So we started with something in a similar space in that we were like, you know, all podcasts are going to video. All podcasts are actually going to short form video. Uh, like that is how like most people consume most podcast content. But then from that we were like, okay, we built a TikTok for podcasts.

46:57But like when I hear that pitch, I'm your, we are your customer. I'm like, but I need you to get to go from the clip to the main thing. Cause I make money on the main thing. Cause that's the one that has ads and shit on it. Yeah. That is not going to be true anymore. Tell me more. So a lot of big brands, like the RSS feed ad is a nice throw in for a lot of big brands. They want 360 kind of deals. They want to be in the clip. They want to be in the clip. They want to be on your feed. They think of you as a creator. They don't think of you as a podcaster. Hmm. That's interesting. I wish we would have known that before we negotiated our contract.

47:28Probably. But, but yeah, but yeah, I mean, it's like the vast majority of eyeballs are not coming to you or, you know, the vast majority of time spent with you guys is, you know, it's people consuming the content in the feed and your awareness. Well, I saw a clip of this because Jimmy went on Joe Rogan. So Mr. Beast went on Joe Rogan and he's, I didn't watch the full, but I'm watching the clip and he's saying in the clip, he's like, you know, Jimmy, who knows media more than, you know, anyone, he's like,

48:01you know, 50,000 times more people are going to watch this clip than we'll watch the full show. So ultimately, like these shows are basically like, they're actually consumed via clips on social feeds. That's like the end product. That's the net. But the best customers don't, like when you and I talk about something, we'll talk about something in minute 45 and we call it the RSS feed. So people who listen on Spotify, anyone who puts it in their their ears and they go for a walk. Okay. Well, the retention on those guys is way better. And we'll mention something in minute 45 and I'll have people come out to me on the street and like

48:32ask me about that. And it doesn't seem, whereas the clip people are a little bit more fly by. A lot of it more fly. Yeah, a lot, a lot more. Like for example, Sean's like, oh, you gotta, you gotta watch this podcast. It's so good. These guys are so funny. And I'm like, you listen to this? He goes, no, no, no, no, no. But I, I, I, I, um, and so like, shout out to the basement yard boys. Yeah. Huge fan. Never listened to the show. Love the clips. And so like, but, and as someone like doing this for a living, I'm like, I don't like that. You know what I mean? I totally know what you mean. And you know, this conversation with people

49:04actually making long form content is, can be a little hard because you guys think of the product as the full show. But you're like, we're outdated. What's the phrase? It's like, never ask a man for his opinion when his salary depends on the answer. It's like kind of that. Yeah. I mean, I think like RSS feed also is a very outdated technology that advertisers don't like because it's extremely hard to measure. Like you're giving download numbers and they're like, we don't, that doesn't help us. Yeah, but you're giving impression numbers. What's the difference?

49:34Well, you can give impression numbers very specifically, but the thing about download numbers is like, you don't know who is listening to the ad when and for how long, but for impressions, you actually know how many people. But I guarantee your impression is a scroll on Twitter. They don't, you don't know if they're actually watching to the 32nd mark or whatever of that clip either. That is true. But the thing about video also is that the clips get re-shared again and again and again and again in a way that is like, you know. I'm a believer in clips. There's no doubt. Obviously clips is what people consume a lot of

50:06because that's what we all do. So tell me like, you know, you're doing this business, you have these customers. Sounds like you already got a bunch of major media companies, but you're in the venture game. How much have you raised so far? So we raised a little over $2 million. Okay. Yeah. So we raised this. So we went through Y Combinator, raised that seed round. So give me the napkin math. How does this become massive? What do I need to believe? What's every business has like a value equation, right? So you're going to need X number of customers paying you Y dollars a month to give you Z, you know, net revenue or

50:38whatever your total revenue. Yeah. And what's the desired like outcome in terms of net revenue?

Organic content versus digital ads

50:42Like what is, how do you define Z? What's winning to you? So, you know, our view is that as agents get so good at making and posting video content, it actually eats up the amount that's spent on digital advertising. So about $90 billion a year goes towards meta and YouTube and TikTok ads. And those people are paying for eyeballs. Our view is actually that like a lot of that spending is going to migrate to organic content and it's going to migrate to paying agents for performance.

51:15And so, you know, for us, like, you know, the TAM of like video editing software or the labor budgets of video editing software, that's in the tens of billions. But quickly by next year, it'll be in the hundreds of billions in terms of how many people or how many brands are going to spend the amount of money to acquire customers. Instead of paying, your bet is instead of buying ads, people are just going to make their own organic content and it's going to be good and go viral and help someone make money through selling stuff or selling ads. Correct. I mean, it's what we've already seen. Like we've seen a lot of customers allocate their

51:46digital ad budget to using overlap and whether that's paying on a CPM basis rather, or that's paying for the software. We're a big believer that like, and you guys know this better than anyone, but like every company to a certain extent becomes a digital media company and starts investing in content. And you don't necessarily even need to make content in this type of setting. You can literally just have people talking at a camera and your agent can make it good content and post it.

52:19How does your agent do that? Well, you can have someone talk to the camera and then put in a video or have the agent go get the video and then it could put in graphics. It can put in B-roll. It can understand like for this company account, what type of copy works really well. And it can go post it every single, you know, a version of it every single week. You have this energy of the guy at the poker table, who's got a winning hand. Yep. Posture, the way you answer the questions. You're very, you're very good at that, but that's not that fun in the sense of like, what is unfigured out? What's the real,

52:54what, you know, you're an entrepreneur. There's no way it's all just, yep, we got it. Monopoly coming soon. You know, there's obviously going to be, you know, there's obviously stuff that you're trying to figure out right now. What are you trying to figure out? We're figuring out, I mean, there's a whole bunch of things that you're figuring out, as you guys know about building, when you're building a business, hiring the right people, like hiring the right go-to-market people, hiring the right kind of people with the right engineering. But that's not that hard for you. Like you just need like good enterprise salespeople. No, it is hard. Well, it's, it's hard from the perspective of, um, hiring people who know how

53:28to speak to old school media people and kind of new savvy digital media people. I just don't think that that is that hard. Give us, what's the burning question? Like, what are you actually trying to figure out? I mean, we've, I, we've kind of cracked a little bit of like product market fit in that sense. And right now we're, we're kind of in growth mode. Getting pulled. We're getting pulled a lot. Did you do something to get pulled? You just had the right idea? What, did you figure out a go-to-market motion? Like what'd you do? So go-to-market motion where we like actually use the product ourselves to clip.

53:59And they're brand, they're all branded overlaps. No, they're not. No. Because you guys were clipping our podcast for us or something. Somebody was doing that. Probably. It was the AI agent who was doing that. From an outside, it seems like the big bet is the CPM thing or the SaaS thing. That seems like a pretty like... That is one of the biggest questions. And I think for the big media companies, it's, it's always going to be the SaaS. They don't want to pay based on CPM. Right. Because my margin doesn't keep improving if I have to keep paying you a percent of how big it is. Exactly. Exactly. But for a lot of the creators and a lot of the like smaller creator folks,

54:32like that is way better. Yeah. Because they can't afford six, six figures a year. They can't afford six figures a year. But also it's, they can actually do... But how do they get CPM money to pay you? Like if they're like, like we don't, we don't make money on clips at all. Most people I would think don't make money clips on all. Well, so, you know, an example of like one of the recent CPM deals that we've done is like, do you guys know James Sexton, the like divorce lawyer, celebrity divorce? He's on a ton of podcasts. I've seen his clips. Probably overlap clips. But what, you know, he's launching like a legal

55:05tech business and like selling like some sort of prenup software. It's like the guys who go on WAP and they're basically like, hey, we just want to just make me famous. I'll give you $3 CPM. Make me famous. Well, there's that. Yeah. There's, there's that, which is kind of like makes our product like relevancy as a service, like relevancy on the timeline. But then there's, there's a guy like James who's, who knows that like a certain amount of eyeballs will convert to a certain amount of revenue. And so this is a cheaper, more effective version. Lawyer billboards. Lawyer billboards or running meta apps.

55:36And then you also just have to make sure that like your clipping is way better than Opal or Opus, whatever it's called. And then the 10,000 other ones that are going to like eventually come out or the duct tape people like me. A hundred percent. So drop some wisdom on us, right? If you're, if you're somebody is a founder listening to this, what's a golden nugget, a business insight, a insight from you about the way you're building overlap that they can steal, they can take, and they can do. Maybe something you don't, you think you guys have done a really good job of that maybe others do just okay, or they don't

56:06even do at all. I think on the enterprise sales side, understanding, and what I don't think I understood until I started having some success with enterprise sales is that the people who are buying your product are thinking about their job first and foremost. And then how do you get those people to, uh, to get promoted? Like basically you're selling, here's how I'm going to get you promoted. That's particularly true in advertising. When I used to own a company that made money on

56:37advertising, we would close seven figure deals. And they, the way the buy, I would thought like, oh, I'll just tell them that like, if they spend this much, they're going to make this much money. That makes sense. I'm a business owner. That's all I give a shit about. And then that pitch never worked. It was like whining and dining worked and making them say like, you have this budget, you have to spend it, spend it with me. It's safe. Totally. The thing about it is it's like trust is like, is that it's, is that's what's really important is like way more than ROI. Totally. It's trust and being like, you know, will I help you get promoted? And like we have. So to do that, you need to know what metrics they

57:11get measured on. Exactly. And make sure they hit their metrics and give it to them in a way that they can easily share so that it's clearly visible that they're hitting their metrics. And a VP at a company, they're getting evaluated on not the revenue and profitability of this, this $100 billion company. Right. There's a phrase for that. What's it called? A cover my ass? Yeah. CYA businesses. Yeah. Like that's why people buy Gartner. Yeah. I told, yeah, that was my huge learning running an ad business. I was like, this doesn't make sense. All they do is they take them out. It's like, this is why like companies have

57:43like box seats, you know, like season passes. What was the valuation of that $2 million round?

57:50So the valuation of the $2 million round was $25 million. And also, can we still invest at the $25 million? We can talk about that. You know. It was a shoot your shot where we shoot our shot with the entrepreneurs. And can we get the software for free? Dude, thanks for coming on. This is awesome. Thank you for having me. Congrats. This was great. You know, long-time listener, first-time caller. So great to meet you guys. Thank you. We appreciate you. All right. That's it.

Wrap up and city tour voting

58:20All right. That's a wrap for San Francisco. We had nine, 10 founders come in, everyone from a million to a hundred million. And that was a good time. That was a lot of fun. We had great founders come. We've already done this in New York. Now this was SF, but we need more cities to go to. So go to Spotify, go to YouTube, wherever you listen or watch, and let us know in the comments. Whichever gets the most upvotes, the most replies, the most comments, we'll actually go to that city. So stop what you're doing right now and go do that. And if you want to be on the show, reach out to Ben. Ben Levy. Find him if you want to be on the show the next time we go to a different city. All right. We're out of here.

58:51I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel, never looking back. All right. Let's take a quick break. I want to tell you about Marketing School. It is a podcast that is part of the HubSpot Podcast Network and it is run by Neil Patel and Eric Su. And these guys are both marketers who are running businesses. And so if you want real world tactics from practitioners who are actually out there in the field doing it, this is the podcast for you. Check it out wherever you get your podcasts.