Microsoft Layoffs, Immigration Blunders, & Office Hours with Jeremy Redman of Airfive | E2127

Today's show: Microsoft lays off 6,000 employees despite record profits, signaling a ruthless new phase in big tech. Jason, Lon, and Alex discuss what it means for the talent market, why tightening U. S. immigration could cripple startup innovation, and whether AI startup Windsurf is selling too early as OpenAI circles. Plus, Klarna's AI customer service backfires, IPO momentum returns, and Office Hours with airfive founder Jeremy Redman pitches a bold new prepaid SaaS model. Timestamps: (0:00) Episode Teaser(2:40) Why ex-Microsoft staffers are talking smack on Blind(10:08) Atlassian - Head to https://www.atlassian.com/startups/twist to see if you qualify for 50 free seats for 12 months.(15:58) Checking out ElevenLabs' wild new AI soundboard(20:28) Fidelity Private Shares℠ - Visit ⁠https://fidelityprivateshares.com⁠! Mention our podcast and receive 20% off your first-year paid subscription.(24:02) What is Bottom Up TAM and why it isn't dirty like it sounds(30:10) Google Gemini - It uses AI to help you write, code, and create in one interactive space. Try it at gemini.google.com/canvas.(33:52) Cohere missed revenue estimates but things aren't THAT bleak!(37:01) Why America NEEDS highly skilled immigrants(43:12) Working the "I Have a Secret" strategy with Jeremy from Airfive Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Links from episode: EleveLabs Sound Board: https://elevenlabs.io/sound-effects/soundboardLikable: https://likeable.co/airfive: https://airfive.com/ Follow Jeremy:X: https://x.com/thejeremyredmanLinkedIn: https://www.linkedin.com/in/thejeremyredman/ Follow Lon: X: https://x.com/lons Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: (10:08) Atlassian - Head to https://www.atlassian.com/startups/twist to see if you qualify for 50 free seats for 12 months. (20:28) Fidelity Private Shares℠ - Visit ⁠https://fidelityprivateshares.com⁠! Mention our podcast and receive 20% off your first-year paid subscription. (30:10) Google Gemini - It uses AI to help you write, code, and create in one interactive space. Try it at gemini.google.com/canvas. Great TWIST interviews: Will Guidara, Eoghan McCabe, Steve Huffman, Brian Chesky, Bob Moesta, Aaron Levie, Sophia Amoruso, Reid Hoffman, Frank Slootman, Billy McFarland Check out Jason's suite of newsletters: https://substack.com/@calacanis Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com Subscribe to the Founder University Podcast: https://www.youtube.com/@founderuniversity1916

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  If we make it harder to get a visa to come build here and to hire here, we are literally handing the baton of technological leadership to places where those people would have come from. Like, US technology companies would not be as strong if so many Europeans weren't hopping United flights over from London and Paris.

• 0:18Speaker 01

  Not even just Europeans. I mean, you know, Indian people and people from China, South America.

• 0:24Speaker 00

  All around the world. I was just thinking about a couple of the companies in particular, but to me, this is exceeding our competitive advantage as the technology and startup capital of the world. That is a mistake. That is stupid.

• 0:35Speaker 01

  A huge mistake.

• 0:36Speaker 00

  I want more companies here. Yeah.

• 0:40Speaker 02

  This Week in Startups is brought to you by Atlassian. From MVP to IPO, Atlassian for startups provides your team the right tools to plan, track, and collaborate on work. Head to atlassian.com/startups/twist to see if you qualify for 50 free seats for 12 months. Fidelity Private Shares. If you want the all-in-one equity management platform, Fidelity Private Shares has you covered. Visit fidelityprivateshares.com and mention this podcast for 20% off your first year subscription. And? Google Gemini. Unlock the power of AI with Google Gemini. Experience the next generation of artificial intelligence. Gemini, Google's most capable AI model, is designed to transform the way you work, create, and innovate. Try it at gemini.google.com/canvas.

• 1:25Jason Calacanis?

  Hey, everybody. Welcome back to This Week in Startups. I've been in this for 14 years. My Lord, I'm exhausted. It's Friday, May 16th. With me, Lon Harris and Alex Wilhelm. We're going to go through big tech. We're going to go through little tech. We're going to do it office hours. If you're passionate about tech, startups, finance, media, all that great stuff, you're in the right place. Let's get started, gentlemen. You can find us on YouTube, X, Twitter, LinkedIn, all those great places. Just search for This Week in Startups. Alex, I had asked you to just keep track of IPOs by month. You're keeping track of that, yeah?

• 2:00Speaker 00

  I have an IPO update for us today, and I will have charts for us on Monday of all the last 16 months of IPOs, I think.

• 2:07Jason Calacanis?

  Perfect. So we're going to keep track of that for you because exits are critically important. I have had now three or four discussions ever since Trump sort of wound down the tariff turmoil, the trade turmoil, whatever you want to call it, 4D chess. All of a sudden M and A is back. So here we are. People are starting to think about IPOs, etc. So we're going to get that dialed in for you as an audience because it's important when you're running a company, you're going to start having to evaluate these offers and make decisions. Lon, the war between talent, technology, and management is raging. It's a little bit of a Cold War and a standoff, but it is now becoming a full-blown, at least on TikTok and the socials,

• 2:52Jason Calacanis?

  act, blue skies falling. This is going to become an outright war because something happened just yesterday or the day before. Microsoft, which has record profits, am I correct, Alex? Record profits at this moment in time? Yes. Record profits. They've done layoffs and rifts before, decided to cut 3% of their staff, 6,000 people. This is not a small action. 3% seems like a small number, but 6,000 is a large number of highly paid individuals. This is a lot of software engineers. It's a lot of project managers, a lot of, you know, really interesting titles. And this comes on the heels

• 3:32Jason Calacanis?

  of other layoffs and return to office by Uber, Amazon, Google, Meta. There's something happening here, and I think we know what it is. The deal between Lon, management, and talent. I'm going to say talent in our industry. Management and talent. Owners of the business, responsible for the bottom line, the talent that helps them execute on the vision, has been, hey, if things are good, things are good. We're making money, we're profitable. Just relax. There's nothing to worry about. Because we're massively profitable. We're printing money. Au contraire, mon frère. Things are going smashingly for Microsoft.

• 4:14Jason Calacanis?

  And they're doing 6,000 people just hit the bricks.

• 4:18Speaker 00

  I just pulled the data for you on Microsoft's profitability to put this into context for everybody. In their most recent quarter, $25.8 billion worth of net income, Jason, up 18% year over year. That's nearly $10 billion a month in profit and apparently not enough. So these layoffs, we don't have the data about all of them, but we do know about the layoffs in Washington State, which is where Redmond is, which is where Microsoft is based, of course. And Bloomberg put together a chart here showing what got cut. And if you look at this, Jason, the very top category is software engineering. And then there's a variety of different management roles, product management, business program management, that sort of thing. Now, we've talked a lot on the show about how companies are trying to get flatter, trying to get more into founder mode, have the founder and CEO more in the details.

• 5:03Speaker 00

  From that perspective, Jason, I can understand having PMs and other roles that used to sit in between the CEO and the ICs lose some of their primacy, but I was shocked at just how many of these cuts in Washington State from Microsoft in this riff were software engineers, because what does Microsoft make? They make fricking software, you know? It strikes me as a very different era in tech. Gone are the days when Google was warehousing talent. Today, people don't want talent. And you tweeted a post from Blind indicating that apparently a lot of senior people were cut because they were the most expensive. So not only did we not want SWEs, maybe we don't want senior folks in general.

• 5:38Jason Calacanis?

  Yeah, Lon, maybe you could bring up and give us a little color commentary here on what was on Blind. People don't know Blind is one of these anonymous social networks for people to vent at work. They tend to be like a back channel. And I think in order to post to at Microsoft.com, you have to register with them with an at Microsoft email, which seems like a very dangerous thing to do.

• 6:00Speaker 00

  Right.

• 6:00Jason Calacanis?

  You know, I'm Microsoft and you're on Blind and I catch you. I think that's a snap firing, but okay.

• 6:07Jason Calacanis?

  Yeah, that's a little bit weird, but I, so I, Alex, you look up how you get a. How you're able to post to blind. I want to know that mechanic there, but.

• 6:16Speaker 01

  All right. So we do have some of these tweets from blind. They tweeted layoffs are happening at Microsoft around 3%. Here's what our users are saying. So this top tweet. Can we start unionizing now or do we want to get screwed some more? And a lot of people are sharing, you know, like DM them for referrals to other employers, DM for ByteDance TikTok, DM for Amazon referral. This one says laid off after nine years. I was a UX designer in Azure. Pretty wild. Still processing the news. It's been confirmed that they cut 3% of the workforce around 6,000 people. I'm not going to look for a new role right away, but I appreciate everyone offering referrals in this thread. Other people are talking about how desperately bad the job market is.

• 6:57Speaker 01

  So yeah, people are, people are sharing, commiserating and they're not happy here. Earning 600,000 a year would result in good enough savings. Do not scramble for a new job. Unlike those less fortunate, got to boost the share price.

• 7:12Jason Calacanis?

  That I I teed off of when we were in our group chat or in Slack. This is really interesting. $600,000 total comp employees. People are wondering who gets paid 600,000? Isn't that like the CFO's salary or the, you know, like a management salary? That's total comp. So if you started with Microsoft and you had a four-year grant and Microsoft shares doubled since that time, you might have been given 100, 250K salary and 100K a year or 200K a year in stock rents, but they could have doubled. So now you've got people making $600,000 a year. I got to think that there's some bean counter somewhere looking at this saying, hey, the company's going to function perfectly well on with 97% of the talent. Obviously it will.

• 7:57Jason Calacanis?

  And we don't care what this signals in terms of loyalty to the, to the team. And this will have a very deep impact on the bottom line. If we can show the markets, hey, we're doing more with less. We're growing 10% a year or whatever they're growing while cutting 600K salaries. I mean, it's a level of getting fit in austerity. It is very appealing to shareholders and it's very disturbing to rank and file. I gotta think if you're at Microsoft right now and you see a 600K, nine-year vet sitting next to you. Get walked out the door, you gotta be perplexed unless the person was really the bottom 3% of performer.

• 8:41Speaker 00

  But if they were, Jason, wouldn't that imply that Microsoft's, you know, internal people controls were terrible? Because why would you have a bottom 3% performer who's making 600? So either the company screwed up, or they're just telling their staff that they should not expect to work at this company for more than a couple of years because they'll get too expensive. That's just brutal to institutional knowledge, keeping senior staff who are critical. To me, it feels a little self-defeating for a company that's profitable, Jason. Am I just being too soft-hearted?

• 9:08Jason Calacanis?

  Yeah, I would say the truth probably lies between the two. You know, in each of these individual cases, when this happens, they go to each team, Alex, and they say, "We want to tighten up here. Uh, you've got a 200-person team. Tell us the five people who are the lowest performers." And that person then says, "Oh, well, I could give you the 10% of lowest performers because there's one in 10 people in every team who are pretty annoying." I'm gonna say on average to the managers who they're...

• 9:37Speaker 00

  Sure.

• 9:37Jason Calacanis?

  Call them the trouble child, you know, the person who just is not dialed in, not getting it done. So for managers, they're always looking for an excuse to cut the bottom person. It's almost, I don't know about you, Lon, but you've been in charge of 10 or 20-person teams before.

• 9:54Speaker 00

  Yeah.

• 9:55Jason Calacanis?

  You know, number 19 or 20 on that 20-person team, you're like, "That's the person who shows up late, leaves early, you know, is breaking my chops." Almost never do you have a 20 out of 20, like, all-star team.

• 10:10Jason Calacanis?

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• 10:54Jason Calacanis?

  Eligible startups get up to 50 seats. That's right, you heard it correct, not five seats, add a zero, 50 seats for free for one year. Head to atlassian.com/startups/twist for complete details and eligibility. Thank you to Atlassian for making great products that I use every day.

• 11:11Speaker 01

  Right, I would say, yeah, it's once you get to 12, 15 or more, that a group of that size, there's always going to be a few stragglers. Like, you're aware of the parabola of, I've got a few incredibly strong people here. I've got mostly pretty good people, very capable, good workers. And then I've got my two or three at the back of the bus, yeah.

• 11:34Jason Calacanis?

  Jack Welch was like, just cut 5% of people a year. And most management theory kind of believe that. I believe it was Jack Welch at GE who was.

• 11:40Speaker 01

  It was, yes.

• 11:41Jason Calacanis?

  Yeah, five, just 5%. And there's something to be said for that. I do think I have been on high performing teams where, you know, if I look at my investment team at launch right now as an example, which is a bunch of people just tightened up, got a little bit tight right now.

• 11:55Speaker 01

  Yes.

• 11:55Jason Calacanis?

  But I got 11 people. And I can tell you, like, you know, these three or four people are very impressive to me right now. Out of those three or four people who are the most impressive, like, two of them are recently impressive to me. So I kind of feel like I've got an all-star team right now. I don't feel like, maybe there's a couple of people, I think, who could, you know, increase 10% or 20%.

• 12:13Speaker 01

  Yeah.

• 12:13Jason Calacanis?

  But I don't feel like we got any duds on the investment team who are not working hard and not committed.

• 12:18Speaker 01

  Absolutely not. I'm looking right into capital. There is nobody on the investment team right now, I would.

• 12:24Jason Calacanis?

  Yes, and so, but the reason I'm bringing that up is,

• 12:27Speaker 01

  Look at my face.

• 12:28Jason Calacanis?

  You can do that, to your point, you said the number was 12 to 15.

• 12:32Speaker 01

  Yeah.

• 12:32Jason Calacanis?

  I think it's 11 exactly.

• 12:33Speaker 01

  I think we're right there, yeah.

• 12:35Jason Calacanis?

  I do think if I, you know, added five more people, suddenly I would be in the same position.

• 12:39Speaker 01

  I did have a question here for you guys. Is, now, we heard just this week, Klarna, they had let go of a whole bunch of their customer service people and replaced them with AI. And now they're sort of backtracking a little. They're like, we maybe were a little aggressive, we're having some low quality issues. And do you think there's any chance that companies? I think Microsoft seems to be going pretty gradually. 3% is a fairly reasonable number, I think. Do you think there's any chance that companies might get overzealous trying to replace their coders with AI? And then we might see a backtrack in a few months or a year, or no?

• 13:13Jason Calacanis?

  Not from what I'm seeing, you know, when I see people applying AI to different business sectors, I, the reason the Klarna story became the Klarna story was because he was like, wholesale, we're done, 700 people out the door.

• 13:27Speaker 01

  Right.

• 13:28Jason Calacanis?

  And everybody was like, what? Like, why wouldn't you cut 10%? See how it goes? Cut 20%? See how it goes? You know, you would maybe taper off and, and just see if you can reallocate people. But he, he came out with the grand pronouncement and then this one. So I wonder if the Klarna thing was a bit performative in some ways, Alex, where maybe that was like, I want to be the AI first CEO, you know? And I want to, I'm not saying candor, but I want to get cred for that. This sounds silly that a CEO, and I don't, I don't know the CEO of Klarna all that well. And I, I'm not accusing him of anything nefarious. However, you see CEO behavior. I mean, leaders of companies can be a bit narcissistic, bombastic.

• 14:12Speaker 01

  It's, yeah, it's like.

• 14:13Jason Calacanis?

  Effervescent.

• 14:14Speaker 01

  It's like virtual signaling instead of virtue signaling.

• 14:18Jason Calacanis?

  Well, it is virtue signaling to shareholders.

• 14:21Speaker 01

  Yes.

• 14:22Jason Calacanis?

  Venture capitalists, your board. And, you know, one of the great ways to virtual signal to the market is say, hey, we're going to demand performance. We're, we're going to have people come, you know, Dara did that and the stock's at an all time high.

• 14:36Speaker 01

  Yeah.

• 14:36Jason Calacanis?

  Again, today, the stock hit an all time high.

• 14:38Speaker 01

  And you're still here. It's a miracle.

• 14:40Jason Calacanis?

  I mean, I may be. Bye.

• 14:44Speaker 00

  Oh no, we're breaking up both cameras. I want to just add a tiny nibble to this Klarna thing. So I think it's pretty important. I think Jason, you make a really good point. If you're a fintech company, you probably want to have some AI pixie dust on you. So I totally get that point. But in an interview with Alex Kantrowitz from Big Technology that came out today, in fact, Klarna CEO Seb said essentially that they're, they're handling more customer service work to AI, but they're hiring humans for the higher end problems. So I think we're seeing a bifurcation of how AI impacts jobs versus it's all or a retrenchment. So I think that's just a little bit of nuance there for the folks listening.

• 15:19Speaker 01

  Yeah, I think that makes sense. And I always go back to that Satya Nadella quote from a few months ago where he did that interview and he's talking about, it's not replacing people with AI. It's AI and people working together to make something better than you could do before. I think if you, if, if CEOs maintain that philosophy, we're going to be okay.

• 15:36Jason Calacanis?

  AI first all the way. If you if you're not starting with AI and you're trying to solve a problem in your company, you're making a mistake. Every job wreck should come with, why am I not doing this with AI? I had this conversation with Free Bird yesterday on our AI basics. Go to this week and start up such basics. All right, I want to I want the soundboard, Lon.

• 15:56Speaker 01

  No.

• 15:56Jason Calacanis?

  Let's start with a little piece of candy here. I know it's not the most important thing, but I like a little visual candy. You said you added it last minute. So that to me sounds like a good setup.

• 16:04Speaker 01

  Yeah, it's a it's this really cool custom soundboard that 11 Labs has going. It's a soundboard and a drum machine and an ambient noise generator all at once. And it's it's basically a text.

• 16:16Jason Calacanis?

  Show, don't tell.

• 16:17Speaker 01

  Text to.

• 16:18Jason Calacanis?

  Video.

• 16:18Speaker 01

  Yeah, well, I'll load it up. I'm just giving it's like a text to sound effects model. Here it is. So yeah, we got this video from 11 Labs showing off their new infinite soundboard, the SB1.

• 16:30Speaker 04

  Okay. Now with the ambient preset, we have sounds like light rain and heavy rain. And maybe a sound of waves as well.

• 16:39Jason Calacanis?

  Okay.

• 16:41Speaker 04

  And these have all been generated by just describing the sound and having our model generate the sound effect. So let's say I want to add a new sound to this ambient soundboard. I am going to ask for

• 16:54Jason Calacanis?

  Wind.

• 16:55Speaker 04

  The sound of rain hitting the roof of a tent.

• 17:03Jason Calacanis?

  Roof of a tent.

• 17:04Speaker 04

  And I'm going to click generate and the model is going to give me four sound effects that have been created completely from scratch that I can choose from and then drop into my soundboard.

• 17:13Speaker 01

  This is this is wild.

• 17:14Speaker 04

  I'm going to listen through these generations.

• 17:20Speaker 04

  And when I find one that I like,

• 17:23Speaker 04

  let's go for number four. I can add it to this button here.

• 17:27Jason Calacanis?

  Mm hmm.

• 17:28Speaker 04

  So now I can trigger this sound effect in my soundboard. And I can also loop these sound effects. So I could have this sound effect looping around on rotation with the sound of waves as well. You can imagine this being really nice for a guided meditation or perhaps

• 17:46Jason Calacanis?

  Totally.

• 17:46Speaker 04

  you just want to have some nice ambient sound while you're working and to help you focus.

• 17:51Speaker 01

  Yeah, I think that's good. I

• 17:53Jason Calacanis?

  Yeah, I mean, what's interesting about this is There were people who would use sound libraries and make money making these tracks previously and work for com.com or, you know, do, you know, a CD of meditation, et cetera. Now to be able to do it that quickly is just wild. I mean, you're talking about, you know, that might have been a week's work for a sound engineer to work on a project or an app. Now it's just done instantly. I wonder how they trained that. I think one of the things these generative music startups need to disclose or figure out because they will get in trouble is where they got these sounds from on the open web. Because sound is different than,

• 18:38Jason Calacanis?

  you know, just text. Like you might be able to figure out where that came from. And so there are sound libraries.

• 18:46Speaker 01

  I had thought about this. Like, it doesn't seem like these guys were out doing field recordings.

• 18:51Jason Calacanis?

  Maybe they were.

• 18:52Speaker 01

  Maybe. I mean, it's possible, but it's more likely that they found archives of previously recorded sound effects and use that as their training. I'm guessing. I don't have that data, but I'm guessing that's what they did.

• 19:04Jason Calacanis?

  Or there's a sound library that you can license for a hundred grand and take all, and they own it. And they're just like, yeah, feel free to train it. And that would be the right way to do it. I bet you they disclosed somewhere on their website where they got these things and how to do it because you're just inviting a lawsuit. If you went on the open web and you just found rain on a tent and then you could bring it back to somebody else. That's a very specific thing. I don't think the AI understands the difference between rain on a tin roof versus a tent unless it had a very specific object. So if I said rain on, you know, a Tom Ford suit, you know, on a, you know, Adirondack chair, like,

• 19:45Jason Calacanis?

  would it be able to do that and actually understand something specific like rain on a wool coat?

• 19:53Speaker 00

  Guys, I made an account. I'm generating rain on a Tom Ford suit. I'm at a Ron Deck chair. So when this is done, we'll see.

• 20:02Speaker 01

  We'll see. Right. This is one of those cases where it's like AI plus humans is going to be super magical. Cause it's like, imagine if you were making like, I've been in this situation, like if you're doing production and you need the sounds of like, there's a thunderstorm outside. Normally you would need to go pay money, find it in a sound library somewhere, license it. To be able to do that instantly and like, put it in your scene or your movie or your TV show. Like overnight, it may, it changes the game for all that.

• 20:30Jason Calacanis?

  This advertisement is paid by Fidelity Private Shares. All right, founders, we all know cap tables, due diligence, and of course, managing investors is a huge headache, but there's a very simple solution for you. Today, we're talking with Kristin Kraft, an old friend of mine, and she works at Fidelity Private Shares, a new group over at Fidelity. You've heard of Fidelity before. And they have a mission to help startups simplify equity management. They're going to save you money. They're going to give you better service. Welcome to the program, Kristin.

• 21:00Speaker 05

  Thank you so much, Jason. It's great to see you again.

• 21:02Jason Calacanis?

  Yeah, great to see you as well. Maybe just from a product perspective, what are you trying to accomplish with the product?

• 21:08Speaker 05

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• 21:46Jason Calacanis?

  So if you want an all-in-one equity management platform, Fidelity Private Shares, they've got you covered. Visit fidelityprivateshares.com. That's one word, no spaces, no dashes. FidelityPrivateShares.com And hey, mention this week in startups, they'll give you 20% off your first year subscription. Once again, fidelityprivateshares.com And tell them that you heard about it here on This Week in Startups.

• 22:09Speaker 00

  Do you guys want to hear it? Do you want to hear the?

• 22:11Jason Calacanis?

  I do want to hear what ruining my Tom Ford suit.

• 22:14Speaker 00

  Yeah, that's like a $6,000 suit. I mean,

• 22:16Jason Calacanis?

  what was the line from, by the way, what was the line from Arrested Development?

• 22:20Speaker 01

  Yeah, it's like, yeah, the guy in the $6,000 suit's really gonna hold the elevator. Come on.

• 22:24Jason Calacanis?

  Come on, who's that guy? He's the guy on Smartless.

• 22:26Speaker 01

  Will Arnett.

• 22:27Jason Calacanis?

  Will Arnett, yeah. So he, he was a trust fund nepo, baby.

• 22:32Speaker 01

  Joe Bluth.

• 22:32Jason Calacanis?

  As Joe Bluth, great show. Shout out to that new show. Okay, let's hear my Tom Ford suit.

• 22:36Speaker 00

  Let's see if this works. Generation number one.

• 22:40Speaker 00

  It's pretty good.

• 22:41Jason Calacanis?

  No, that's a Hugo Boss. Let me see the next one.

• 22:47Jason Calacanis?

  It's a J Crew. That's like off the rack. Let me come next one.

• 22:52Jason Calacanis?

  That's the Tom Ford. Yeah, they got it.

• 22:54Speaker 00

  All right.

• 22:55Jason Calacanis?

  I mean, it does actually sound like, I'm gonna be honest, it does sound like the pitter patter of rain ruining

• 23:03Speaker 01

  a fine suit.

• 23:04Jason Calacanis?

  Yeah. Not a fine suit, but a garment. I mean,

• 23:06Speaker 01

  It's pretty close.

• 23:07Jason Calacanis?

  Shout out to 11 Labs.

• 23:11Jason Calacanis?

  I have so many, I mean, I have like five more I want to do that are incredibly specific and obnoxious that I'm not gonna do.

• 23:19Speaker 00

  I want to point out that this is why I think people are so excited about, about what we call voice AI generally, but probably just sound AI. I just think that we kind of forget how much we use audio in our day to day life as humans, as people in the workforce. It could be enormous. And also they made a really great consumer facing tool here. It's easy to use. I didn't have to give them my credit card number to sign up to play with it. I'm not saying it's a chat GPT moment, but I can see this driving a lot of interest into 11 Labs from a lot of new sources. So points to them. Great idea. $3.3 billion was the last valuation for 11 Labs. And I'm seeing revenue reporting somewhere between 50 and 90 million AR. So doing quite well for itself.

• 23:53Jason Calacanis?

  Let's go with your next story, Alex. What do you got?

• 23:55Speaker 00

  I'm taking Windsurf. So last year we talked to the guys behind Codium. They rebranded to Windsurf. We talked about that relatively recently. The big news here is that they dropped three new models and they're called the SWE family, which stands for software engineer. And Jason, the argument that they're making is that AI models that are great for just writing code are only doing a fraction of the overall. Work. They say that developers do things across different services digitally. They have their work patterns. And so the idea is building AI models that can do a bit more than just generating code and running, say, a unit test on it. And so they dropped three models, SWE one, light, the regular one, and then a mini version.

• 24:39Speaker 00

  And so the idea is to essentially take AI models in a more agentic context and have them do a lot more for developers. I think this pairs nicely with our Microsoft story that we started with about where they're cutting staff at the company. And I think this just goes to show that while we do discuss humans plus AI doing quite a lot, it does feel like the balance is moving in one direction. As I watch the technology advance. Thoughts?

• 25:01Jason Calacanis?

  Okay, so Windsurf helps developers write code faster. Agentic means agents. So now they have agents going out and doing things autonomously on behalf of developers and or human beings. And OpenAI bought this because it's an important category, perhaps the most important category. You know, in AI, because it's the one that has a finite data set. It's going to make the best impact. Developers are expensive and we're in a war with talent. So even the OpenAI team, if they have access to Windsurf early. Just the purchase of it for $3 billion, right? Which is 1% of the market cap of OpenAI right now.

• 25:47Jason Calacanis?

  If it made all the developers, let's just say they bought it and they didn't release it and they just used it for internal use only. They would need to make OpenAI 1% more valuable to pay for the cost. And this is when we get into the yum yum land of M and A. We've been talking about the wrath of Lina Khan. And I told you there's like a little stuff brewing here. Here's where an acquirer has a thesis. And the thesis can lead to extraordinary outcomes for founders, investors in that company. I just gave a thesis which is you would never think of. We buy this thing. We give early access to our developers. If they're 1%, they make

• 26:26Jason Calacanis?

  the company 1% better because of it. Oh, my God. So here we go. They're making much faster progress because they are dedicated team. They probably have a significant earn out for hitting milestones. And this is going to just make OpenAI, the company, go faster. And it's going to make everybody who uses it. So this seems like, yeah, pretty, um, pretty interesting.

• 26:50Speaker 00

  So the thing that took me by surprise, though, is I thought the Windsurf deal was kind of locked up with OpenAI because everyone reported roughly $3 billion, kind of a done deal. Actually, I don't think it's officially closed yet. And so I'm actually kind of watching Windsurf go its own path forward here. It was, everyone's reported it, that it's going to happen in the works, nearly done, $3 billion.

• 27:11Speaker 01

  But they're doing that, it's in talks. It's like, it's not, we're not, yeah, it's not finalized.

• 27:17Jason Calacanis?

  Wait, wait. If it's not finalized, I got a piece of advice here. They made an agreement, that was a week ago, to buy for $3 billion. But it's not, and OpenAI had looked at Cursor, we knew that. And two days ago, the New York Times reported OpenAI in talks to acquire Windsurf.

• 27:36Jason Calacanis?

  That's a big difference. Bloomberg said a week ago, that OpenAI reached an agreement to buy Windsurf. Now it's OpenAI is in talks. I'm going to go ahead and advise the T-Pet, uh, Windsurf to stop negotiations, leave this deal, raise a billion from Masayoshi Son, or whoever, UAE, Saudi, Elon, Elon's got a billion dollars. Windsurf needs to go talk to three other people, because I think they can add, I don't know, they might be able to add, uh, 3X. This should be a $10 billion deal. I think they're selling way too early. This is a big mistake. So, I mean, listen, I'm not trying to make the check go up for Sam Altman. I'm just saying, it's pretty clear, based on the

• 28:21Jason Calacanis?

  reporting and based on what I'm seeing here, that this company could do better than $3 billion at this moment in time. This is a big category. What is Cursor making in revenue?

• 28:29Speaker 00

  I think the last number we heard was 200 million ARR or 300 million ARR, depending on the reporting. Windsurf is at roughly 100 million plus or minus. And for folks out there who want more on this company, episode 2064 here on Twist from last December is when we had Faroon, the CEO, on. Jason, can I just take a victory lap really quick here? Because I'm going to just go ahead and just pull this up. This is my blog. I said, do the deal, but not for 3 billion. How about five? I like you're going for a higher number, but I just feel like selling for 30x ARR right now, growing this fast is just almost like a dereliction of duty.

• 29:02Jason Calacanis?

  I don't know who's the investor in this company, like who's on the board and who the investor is, but I guess sometimes getting a quick win is good. But this might be an Instagram, YouTube like situation where, you know, in 10 years, this company could be worth 100 billion. Like, so what are we doing here? This is one of the biggest prizes in AI. I would say, you know, if you were going to pick the top 10 prizes in AI, robotics and humanoid robot is one, self-driving is one, biology, drug discovery, that whole sort of category is one. And this is one, if we're going to talk, and probably military applications is another. Yeah, this is one of the biggest prizes.

• 29:41Speaker 01

  Topper Perkins, General Catalyst, Green Oaks Founder's Fund.

• 29:45Jason Calacanis?

  Somebody's got to get on the horn here and block this immediately.

• 29:49Speaker 00

  But if you're General Catalyst and you put the last money in last August, 3X in eight months.

• 29:56Jason Calacanis?

  You know, General Catalyst is like one of these mega multi-billion dollar funds. I think they are, this is, this is a great moment to be in, in our industry.

• 30:10Jason Calacanis?

  So many companies are developing powerful new AI apps that are going to radically improve your productivity, but Google has been off to the races. They got a new product, it's called Canvas, and this platform comes with Gemini 2.5 Pro model baked in. It's vibe code ready, ideal for control freaks like me who have ideas and want to see what they'd look like in practice right away. So you can go from a rough concept to an image or even a functioning website in just minutes with a few. You know how like you build a website for a project you're working on, you don't touch it for three years? I want you right now to go use Canvas in Gemini 2.5 Pro and I want you to go say, "Make this website better. Here's my goals." We're talking about rich, robust, fully functioning prototypes near instantly.

• 30:54Jason Calacanis?

  Gemini Canvas is reinventing front-end development. So if you've got some ideas and you want to turn them into documents, code, or prototypes right now, get your vibe code on Gemini Canvas with the Gemini 2.5 Pro model. Visit gemini.com/canvas to see for yourself. When you can see very clearly the path to a $10 billion company, and when you see that, like I saw that with Uber and Robinhood, it became pretty clear, like you don't see that with every company. You know, you see, okay, I could see this getting to 100 million in revenue, I could see this getting to 500 million in revenue, but if they're 16 to, I've heard the number 15 million and 30 million as the number of developers in the world.

• 31:39Jason Calacanis?

  I'll pick 20 million as just an easy bogey here. You know, these things are going to make each developer 10% more effective, and developer being 10% more effective on an average salary of 100,000 globally is $10,000. $10,000 times 2 million would be 10, wait, 2,000 developers at 10,000 per developer is $20 billion. And if you were to double that.

• 32:09Speaker 00

  Forty billion.

• 32:10Jason Calacanis?

  Forty billion.

• 32:11Speaker 00

  And the TAM here is enormous. And also, the whole future is going to run off software, right? So like it's, these trends aren't going to slow down.

• 32:18Jason Calacanis?

  Forty billion in value, even if you only claim 10% of that, that's 4 billion in revenue.

• 32:24Speaker 00

  Yep.

• 32:25Jason Calacanis?

  So what I did here in this back of the envelope calculation is what a lot of, is what we call bottom-up TAM. We studied this in our accelerators, TAM, total addressable market. You could say, you know, what's the market for, you know, co-pilots? And you could say, okay, well, this is the number of players, here's what they're making, they're growing at this percentage, that's one way to make the TAM. What I did was I did a bottom-up TAM of using a different variable. The implied efficiency created per year, per developer, how many developers, average salary. So the value creation.

• 33:03Jason Calacanis?

  Is at least a 10% lift. It might be 25% lift per year, per developer. A 10% lift on their salaries is a market value of, you know, 30, 40, 50 billion dollars, maybe 100 billion if it was 20% left. So then how much of that could the cursor market capture and the windsurf market? Yeah. Deal off. Best advice, deal off. Go for the gold. And here's the thing, these founders, go ahead and sell a hundred million dollars in secondary each. Tell general catalyst, tell founders fund, they got the money club, Brian Singerman. Hey, Brian, I need 50 million. My two co-founders, they need 50 million each. We're going to go buy our NetJets cards and our ski houses and we're done here. Next story.

• 33:49Speaker 01

  Well, let's talk about Cohere. So they're an enterprise AI startup. They build AI models and tools to index corporate data for AI use and also software to help customers build their own AI agents. So they're growing quickly, but they dramatically missed some early revenue projections. It looks like Cohere, the information reported that their projected revenue, 450 million in 2024, 1.8 billion in 2025, and they projected 4.3 billion in revenue for 2026.

• 34:19Jason Calacanis?

  Tripling, tripling, tripling. Got it.

• 34:20Speaker 01

  Right. However, the actual IRL ARR only hit 35 million in March of 2024 and 70 million in February of 2025. A, a pretty big gap there showing just how hard it is to make these kinds of projections in the frothy world of AI. So they're valued at 5.5 billion when they raised 500 million last July at a $6 billion valuation at 70 million ARR in February. That's around an 86 times ARR multiple.

• 34:51Jason Calacanis?

  Yeah. If you were to look at what the market's trading at, if you pulled up HubSpot or Palantir, these are two very hot companies that have subscription models. You know, what are they trading at? Those are the two hottest. Palantir has left reality. That's a meme stock. So we'll take that one off the table. But if you were to look at.

• 35:10Speaker 00

  HubSpot, 12.67% on a price-sales basis, Jason. That's trailing, ARR is a little bit more aggressive. But that's the number for that right now.

• 35:18Jason Calacanis?

  Four times their top line sales, four times that equals their market cap. That's called price to sales.

• 35:27Jason Calacanis?

  So that would be, yeah, 1/20 of this valuation.

• 35:31Speaker 00

  The 13x trailing revenue, Jason. Sorry, I must have misspoken.

• 35:35Jason Calacanis?

  Okay, so that's, you know, eventually these private market valuations will run into a public market and a re-underwriting, as my friend Shemal would say. You have to re-underwrite it. And when you re-underwrite it, you know, and Warren Buffett or Bill Ackman or, you know, pick your public market investor, when you get re-underwritten, they're going to say, okay, yeah, this is what it's worth. And so, but that's the, you know, no crying in the casino. You're making a bet. We just talked about the previous company, Windsurf. They're making a bet too. So maybe this group had the chance to sell at a crazy valuation and didn't. And oh, they should have taken it. So.

• 36:16Speaker 01

  They are, they are trying to sort of paint a picture that it's not quite as bad as it seems. The company told the information that while its early estimates were obviously overly optimistic, they're now seeing hockey stick shaped revenue growth that they anticipated before. They just think it was maybe happening a little later than usual. So that's at least the smiley face they're putting on it for the moment.

• 36:34Speaker 00

  And I reached out to the company because we do that now. We have a lot of emails going back and forth with founders and such. They send us a link to a Reuters article and said, we can't comment further, but read this. And that piece noted that they had crossed roughly 100 million ARR as of May. So plus 30 from February, Jason, feels very strong to me.

• 36:52Jason Calacanis?

  Yeah. So, all right. Well, that's breaking news here on this week in startups.

• 36:57Speaker 00

  There was a great post from our friends over at Wired Magazine going through some folks who work in the legal immigration profession, discussing how there is more pushback from the administration about H1B visas. This is a story that I wanted to bring up because, one, Jason, over on your other show, you did have the President Don pushed him on high school immigration. And he said, staple those green cards to those diplomas. You and I virtually high-fived over the idea and now we're seeing kind of the opposite. Now, this is not shocking, but I did see in that piece a tweet from your friend, Mr. Pederman from Pear VC that I thought was particularly apropos to the current moment. I want to just talk about this. So our friend from Pear says, "Too many Pear VC founders are getting their visas challenged and it's downright absurd.

• 37:41Speaker 00

  Entrepreneurs, both Americans, let's open the doors for innovators, not shut them." I am, I guess, a little surprised, given how prominent we have seen technology people be in the administration, that there hasn't been a longer grace period for high school immigration, especially for founders of startups, than we're currently seeing. And I'm just curious, Jason, are you seeing this show up at Founder Year, at the Launch Accelerator, or on your group chats that I'm not part of? So those are two information sources.

• 38:09Jason Calacanis?

  I don't have an example of a founder not getting a green card or into the country. I have heard one or two. "I want to bring a developer. I'm trying to bring somebody in from Canada. They're kind of like in the Canadian waystation." So there should be a little more discussion about this from our friends who are in the administration. I'm not going to say, like, I'm not going to call people out by name. But you all know my friends who are in the administration. I think it's a delicate balance inside the MAGA party. They all know, with the exception of maybe Stephen Miller and Steve Manon, who are like, generally seem like lunatics to me, I'll be totally honest, like, when it comes to this issue. I mean, they seem to, like, literally want to deport 15 or 20 million people

• 38:54Jason Calacanis?

  and drag them out of the country at an expense of $20,000, $30,000, $40,000 each. And people who have kids in schools here who are cleaning bathrooms, picking cherries, and washing dishes, and just incredible human beings living the American dream. It's just abhorrent and ridiculous and impractical. And you could come up with a million ways to describe how stupid it is to, how stupid, cruel, or impractical it is to drag 15 million people that we brought into this country. And when I say "we," I mean America. We have to own that fact, whether it happened under Clinton, Bush, Obama,

• 39:29Jason Calacanis?

  Trump won, with plenty of people came in under Trump won, or Biden, when a lot of people came in. You can't make this a partisan issue. We're a country of immigrants. This country let people in across the last five, six, seven presidents, you know, since the 80s. The Republicans were the biggest proponents of immigration and NAFTA. NAFTA, am I pronouncing that correctly?

• 39:50Speaker 01

  NAFTA.

• 39:51Jason Calacanis?

  NAFTA, North American Free Trade Agreement. We don't talk about it anymore, NAFTA. Why don't we talk about that anymore? Like NAFTA was this whole EU before the EU. The Republicans wanted us an open border in the North and the South, right? They were the proponents and the architects of it. And everybody else just executed on it. So putting it aside, fight for this skilled immigration. And there's a very simple way to frame it. If you want to get everybody on board, America has to own. If it is a mistake that we let so many people in, we have to own it. And we have to deal with it in a gracious, intelligent way. And the most gracious, intelligent way and thoughtful way to do it, and economically sound way to do it is to say, if you're contributing to our society,

• 40:36Jason Calacanis?

  here's 10 years of taxes you need to pay and a path to citizenship. And, you know, behave yourself like everybody else. Don't commit any crimes. And if you stay on the straight and narrow and you pay some taxes 10 years from now, you know, whatever, we'll get you the green card. We'll get you citizenship. Just, just do the right thing. And then for everybody else, hey, if you're going to come here and create jobs, go get the Trump golden, get the Trump gold card. And you get, you get 3,000 extra miles on United when you.

• 41:02Speaker 01

  Yeah, and, and none of us want to live in a society where secret police are rounding people up on the streets and forcing them into vans and shipping them off to other countries. Like I'm not in danger of being deported. I was born and raised in America, but I don't want to live in that society.

• 41:16Speaker 00

  I want to say that I think we're, we're losing a little bit of the, the start of focus here, which is that if we make it harder to get a visa, to come build here and to hire here, we are literally handing the baton of technological leadership to places where those people would have come from. Like US technology companies would not be as strong if so many Europeans weren't hopping United flights over from London and Paris.

• 41:39Speaker 01

  Not even just Europeans. I mean, you know, Indian people and people from China, South America.

• 41:46Speaker 00

  I was just thinking about a couple of the companies in particular, but to me, this is ceding our competitive advantage as the technology and startup capital of the world. That is a mistake. That is stupid.

• 41:56Speaker 01

  A huge mistake.

• 41:57Speaker 00

  I want more companies here.

• 41:59Jason Calacanis?

  Yeah. Yeah, it's, um, it's all about framing. I literally was having this discussion with high profile people in and around the administration. And I just said, frame this as talent recruitment and job creation. And you're done.

• 42:11Speaker 00

  Talent recruitment is great.

• 42:12Jason Calacanis?

  As asylum, you know, and everything else, and it's just going to become bedlam. Just, we want 1 million incredibly highly qualified people per year who create jobs to come to this country. The number is 1 million. I've decided 1 million. That's it. Everybody could, I mean, a million people who create jobs and you have to create jobs. And if you don't, if you want to come here and you create 10 jobs on average, you can stay. If you create less than 10 jobs in five years, hit the road. Yeah, and create, create some economic value or, you know, that's it. You can't, you can't stay.

• 42:49Speaker 00

  All right. Now that we've gone through the key news stories of the day, we are going to go to office hours. And today, Jason, we're talking all about email, customer support, and the world of AI, and how they all come together at a company called Air Five. This is in the Launch Accelerator cohort number 34. And we're talking to Jeremy Redmond, who's doing his second round of launch accelerated work. Please welcome Jeremy to the program.

• 43:11Jason Calacanis?

  All right, Jeremy, welcome to the program. What was your first company? I'm trying to remember.

• 43:17Speaker 06

  Yeah, it was V1.

• 43:19Jason Calacanis?

  Ah.

• 43:19Speaker 06

  Do you remember that?

• 43:20Jason Calacanis?

  The, I'm trying to remember.

• 43:21Speaker 06

  No code app builder.

• 43:23Jason Calacanis?

  Yes, I do remember that. Yes. What, what was your first cohort that you were in for V1?

• 43:28Speaker 06

  LA 18.

• 43:30Jason Calacanis?

  Okay.

• 43:30Speaker 00

  Wow.

• 43:31Jason Calacanis?

  That was when we were in person in San Francisco. We, every Thursday, we'd go get burgers and yeah.

• 43:36Speaker 06

  You want to know what's funny? Uh, I was the very first, I had a visit to San Francisco where we first met.

• 43:45Speaker 06

  The week before COVID hit. And it was like, I think you actually announced as like the, the COVID launch or something like that. It's like one of the presentations, which I thought was funny. And that was the last in-person one.

• 44:02Speaker 06

  So like when I came, I think a couple of weeks later, like maybe a month later, we were the first fully remote cohort.

• 44:10Jason Calacanis?

  Hmm.

• 44:11Speaker 06

  Wow. All over Zoom.

• 44:12Jason Calacanis?

  Crazy. And so tell us about the new company. Give a little pitch here, elevator pitch, really simple sentence and tell us what you're working on now.

• 44:20Speaker 06

  Yeah. So, uh, Air Five is an AI assistant that automates customer support email. So small teams can focus on growth.

• 44:30Jason Calacanis?

  Uh, pretty amazing. This is an incredibly competitive space. Why are you going to win this space in the face of so many competitors who, you know, want to attack customer support with AI?

• 44:44Speaker 06

  Yeah. So I didn't even want to build this. Um, so I wanted to use some of these competitors that of which used to be. So we were going to use Intercom. Um, and Intercom got real expensive, really fast. Uh, I think it started, the entry price was like 150 bucks a month. And then you start, uh, every response was a dollar. And you're like, this is getting beyond my control. And then every response that they generated that sent to our customers, it was from Intercom's AI Fin.

• 45:18Jason Calacanis?

  Ah.

• 45:19Speaker 06

  So they're really servicing enterprise-based companies. And a lot of the other competitors are doing that as well. So we kind of swoop in there and get the freelancers, the small teams, solo founders, and kind of build a suite of products to support them.

• 45:35Jason Calacanis?

  Got it. And so this is a tried and true competitive strategy. We're going to make something simpler, easier to use, more affordable for SMBs. If you were to look at a product like Salesforce, considered like the gold standard in managing a sales team, you could come in with a, you know, a lightweight version that's not, what does Salesforce cost per salesperson today? Is it like 2,000 a person?

• 45:59Speaker 06

  I mean, it's like 50 grand to set up, right?

• 46:02Jason Calacanis?

  Yeah.

• 46:02Speaker 06

  That's the thing with Salesforce is you need then a Salesforce engineer.

• 46:06Jason Calacanis?

  The whole thing's super expensive. Yeah. And then, you know, you look at, uh, I remember we used to set up mail servers and then Mailchimp came along and it was cheap. And then Beehive came along and you could pay a flat rate fee and have your own domain name. And then Substack is free, but they take 10% of your revenue. Anyway, infinite options available. So that's a great strategy. What's the go-to market strategy for somebody trying to create something that's easy to use? And super affordable? What is the pricing? And then I'm assuming the pricing is so low, you can't have a sales team out there selling it, yeah?

• 46:40Speaker 06

  Yeah, that's great. So, and that actually dovetails into two of my office hours questions. So our go-to market strategy is somewhat unique. When we see competitors in the market space that, like you said, small team support is somewhat inundated with a lot of solutions. I mean, you could use Airtable for a similar thing. So what we do is we see those companies with products. We will then build a simpler version of that product. Like, we built a lovable clone, actually, called Likeable. And we delivered it to our community. So what we do is we will do an Airtable clone, which we did.

• 47:24Speaker 06

  We do a cold email clone, which we did. We do a build your landing page clone, which we did. And then we distribute those to our community, which we have about 2,800 affiliates that then go sell that. And they've brought in over half of our revenue to date.

• 47:43Jason Calacanis?

  Wow.

• 47:44Speaker 06

  So, and then we just gather feedback and then build the next thing with the next competitor.

• 47:51Speaker 06

  And we knew that like building-

• 47:52Jason Calacanis?

  So this is a strategy of not just doing the email responses and competing with Intercom, but just going down the SaaS stack, creating simpler, cheaper versions and using this affiliate network to distribute it and get feedback on how to make the product better. So you're basically building a SaaS-killing platform.

• 48:12Speaker 06

  Yes. So like with this whole inundation of like vibe coding, you can spin up something open source and customize it or something from scratch, or vibe code something with cursor or likable, which everyone can find at likeable.co.

• 48:28Jason Calacanis?

  So tell me, what is the question you have for me? I totally buy the strategy here. I think offering these things for free, collecting data at this stage, since you seem to be pretty good at it, giving some money to the affiliates is a great idea. You've got this like really interesting concept around that. Maybe the affiliate network is the business for other, selling that to startups. I would be interested in that if there was an affiliate network that sold tickets to events or, you know, got people to apply to Founder University. I mean, that, that sounds very interesting as a distribution platform that you built for yourself. Or just getting a bunch of up and coming businesses to get a suite of products for one price? I don't know. There's something interesting here.

• 49:09Speaker 06

  Yeah, I feel like we do, we bounce around and a lot of it is around this business model. And this is the first question. So we have, we give our customers an option. They can pay one low monthly fee. So you can start on Air5 for 16 bucks a month and get going. And then we distribute it, like you said, like our, we have the initial hundreds customers for every product right away. But you can use our prepaid usage based model and that starts at $25. So what we're realizing with our customers is 80% of people will, will go for the usage based pricing. And I think you've spoke about this before, but I think everyone's feeling a little bit of subscription fatigue.

• 49:55Speaker 06

  And it becomes how much can you get predictable cross sells and up sells? But I don't know, I believe in that strategy. Our customers believe in buying that strategy. If you can get two to four years of revenue upfront, that's amazing. Usage based, but I don't know how to sell that to investors when they all expect just an MRR figure. So what's the way you would polish that?

• 50:22Jason Calacanis?

  I think you have a secret. So there is a theory in startups. I have a secret. Right. The secret I've learned is, oh, yeah, people will actually stay at another person's house and they're not the people who stay at five star hotels. They're young people or adventurous people who stay at Airbnb, stay at bed and breakfasts already, or they couch surf on Craigslist. So you kind of know this secret. The founders of Airbnb knew this secret that there were people on the underground who would trade vacation homes or let people stay in their home if they could stay in their home. And they did, there was like a house swapping kind of thing where you would come to New York and I would go to Paris and you stayed in my apartment. I stayed in yours. We vetted each other and it was all done on Craigslist. Right. So you have a secret. Now, most investors, if

• 51:07Jason Calacanis?

  they're thinking, you know, like robots are like, this does not pattern match the MRR, ARR turn formula that we have created. Who gives about those investors? You don't want those investors anybody. You want the visionary investors who are like, tell me more. I like to consider myself in the non-consensus, you know, Peter Thiel, Michael Moritz group, which is, hey, and Bill Gurley, what if it works? What if your crazy idea works? So as you've explained it to me, I'm so excited about it because I'm like, yeah, what if this works? And I was talking to another founder and they were in, what space? They were in a space where people would buy a piece of software or a piece of SaaS software

• 51:51Jason Calacanis?

  for an event and they might use it for a year or two and then, you know, you kind of churn. And I said, well, what if you sold them this on a 50 year basis and you memorialized everything? You know, let's say I'm not going to, it's not this, but I'll make up thing. Like, let's say it was like a tribute website for a funeral. Right. And instead of selling them per month, per year, you just said, pay $500 and we will keep this memorial on the internet for 50 years. Ten bucks a year for 50 years, past 500, you never have to worry going down. And you can put in the email addresses of your kids. They can put in their kids' email addresses and their phone numbers. And it's a family legacy, a tribute to Lon, who we worked with and loved dearly. He went too early.

• 52:37Speaker 01

  I can't believe I died.

• 52:38Speaker 00

  Sorry Lon, yeah. Is that why you're so pale tonight?

• 52:41Jason Calacanis?

  Yeah, exactly. It's the lighting. It's the lighting. I work a little bit on the lighting. So anyway, a new revenue model. And I told her, you know, like, it's so much cognitive dissonance, this monthly bill and the subscription burnout, they pay once. The guys over at 37 Signals came up with a Slack competitor where you pay one time a thousand bucks. I'm sure you know about it. And you basically pay for yourself for one time. I think there's a lot of people who are open to this concept. You figured it out. You've got the passion for it. Let's go for it. Let's hope 19 of 20 investors don't understand it. That means you're on to something. If the people who are doing cookie cutter investing don't understand it, you don't need them. They're the people who would be like, do what has already been done. We're looking for something that has a small chance of working, but if it does work, changes the world.

• 53:25Jason Calacanis?

  So I love it. I love the idea of you selling $100 in credits and use as you go. The reason I unsubscribed from Mailchimp and I like literally, we still had one person holding on to their Mailchimp account and I didn't realize it was costing us 500 a month, 6,000 a year. I was like, get off of that immediately.

• 53:41Speaker 01

  It was me. It was me, Alex.

• 53:43Jason Calacanis?

  God damn it. Uh, now we know I killed him and that's why he's got the memorial page. I joked him out. God damn it, Lon, that's my six times.

• 53:50Speaker 01

  I didn't know we were done with Mailchimp. We're on Bento now. We switched over to Bento, folks.

• 53:55Jason Calacanis?

  Which one?

• 53:56Speaker 01

  Uh, I do inside streaming through Bento now. That's what we set up.

• 53:59Jason Calacanis?

  Bento, Beehive. There's a bunch of free options there. So all this legacy stuff, if Mailchimp just said to me, hey, pay us 500 as you use it, it will keep working. Great. I would have done it, but. You know, so you're on to something. I love that you're on to something new. I'm going to tell you, hold the string and see where it leads you. Anyway, Jeremy, you got a great company. Can't wait to see in person. Where are you based now?

• 54:24Speaker 06

  Uh, Los Angeles.

• 54:25Speaker 01

  And what's your traction like, Jeremy?

• 54:27Speaker 06

  Oh dude, way to get that in, way to get that in. Uh, we, we just got going in December, this last December, and we're about to hit 800K in revenue.

• 54:38Jason Calacanis?

  Wow.

• 54:38Speaker 01

  Wow.

• 54:39Speaker 06

  And we are gunning, we are gunning for a million dollars in revenue, uh, in quarter two.

• 54:46Jason Calacanis?

  Perfect. So before you graduate the accelerator, how are you doing in the, what was it, week six or seven in the accelerator right now?

• 54:52Speaker 06

  Week two.

• 54:53Jason Calacanis?

  It's only week two?

• 54:54Speaker 06

  Or three or four. No, week two, week two pitching investors.

• 54:57Jason Calacanis?

  Oh, week two pitching investors. Oh, we have those week zero, whatever. And how's it going with the investors? Bianca doing a good job? Erica doing a good job?

• 55:03Speaker 06

  Bianca, Bianca and Lucas, Lucas, I guess, isn't hands, hands on with the, that accelerator piece is one of the founder you. I don't know how you do this, but you found, you find the greatest young founder friendly talent I've ever come in contact with.

• 55:21Speaker 01

  Shout out Bianca. She's the best.

• 55:23Speaker 06

  Shout out Bianca. I don't know how she stays so positive all the time.

• 55:28Jason Calacanis?

  Well, I could tell you. I could teach you this. So, um, and I literally can teach you. Uh, I had a realization when we were trying to hire talent. And I looked at the problem we had from First Principles. We, as an early stage fund, have a lot of people coming at us with ideas, like upwards of 20,000 applications for funding. Second only, I think to Y Combinator, which has 45,000. And that's because of the two podcasts, right? I say Founder University. I say, hey, launch.co slash apply, 100 applications come in. We got to sort them.

• 56:03Jason Calacanis?

  So I said to myself, okay, I need an army to sort and meet with folks. So I need to create a system. Remember, systems above goals. The goal is to back enough founders to find another Uber, Robinhood, and have those outlier power law investments pay for all the other ones. And, you know, on a philosophical basis, I want to be super helpful to founders. And I'm passionate about innovation, all that stuff. But on a pragmatic basis, we need to hit a 200, 300, 400x company for every 100 we invest in, because we want to have a three or four X fund. Okay, great. The math is the math. So we have to sort through a lot of companies. We have to meet with a lot of companies. How do you do that? We had this concept of an introductory meeting.

• 56:48Jason Calacanis?

  What's an introductory meeting? We tell people, hey, we got your application. Would love to meet you and do a quick Zoom, which we can record and share with the rest of the team if it's a really interesting company. And I said, what's the most efficient way to do that? 20 minute introductory call, 10 minutes of you pitching us your product, five minutes of you asking us questions, five minutes of us asking you questions. And then we can both mutually agree on, should we do another call? And do we want to do, is there any way we could work together? And so I said, how do we get to 100 of those a week? Well, you need people who can do five of them a day. Some people do eight a day and still have energy on the sixth, seventh, eighth one.

• 57:28Jason Calacanis?

  So I then just said, I want to have people, when they apply for this position of researcher, then they become analysts, then they become associates. I want them to just do a couple of calls and record the calls and then just show me the video. And then instead of hiring people based on what fancy degree they have, I just look at their energy on the video, because the experience of a founder is the person having that conversation with you. Now, they have to be intelligent, they have to be bright, they have to be hardworking, they have to be disciplined, but they also have to be engaging on camera. Right? In that Zoom call, the actual work of a venture capitalist at an accelerator or pre-accelerator is doing 500 calls a year, 1,000 calls a year with founders and checking

• 58:13Jason Calacanis?

  in with them and you know, whatever. So I optimized for that. And you're experiencing that, which is, I tell them, hire people with enthusiasm. And if they're not fired up with enthusiasm, fire them with enthusiasm.

• 58:26Speaker 06

  Oh, that is, that, you know, I am so lost all the time. I ask you for advice or hear your, hear your answers, because it's, I sit there and I'm like, how does he, how does he come up with this? Like, I am actually beside myself with that answer. I've never heard that ever. If you, I've talked with, on my Google sheet, it's 180 VCs, right? A lot of associates. And they don't think the same way. They're not trained the same way. It's really like, how do I climb the ladder and become a principal or a partner? And you kind of feel that. With launch, you really do, uh, double click on the right things with these people. And they are, they are just absolutely stellar.

• 59:10Jason Calacanis?

  Well, and you know, we try to be like, if you think about what you need as a founder, like you need a quick answer. And you need to make sure that we understand your company. And one of the things I realized early on was, I started letting founders review us. So we send them an email 48 or 72 hours after we do a meeting, and then it goes automatically into our Slack with a rating for each person. And it's public to the whole company. I got really bad ratings.

• 59:39Speaker 06

  You did.

• 59:40Jason Calacanis?

  I did. And it was the same piece of advice over and over again. Jason didn't understand our business. Jason, you know, and what it is, is I process things very quickly. So people felt like I didn't hear them out enough. And I didn't understand their vision.

• 59:54Speaker 06

  Faster than they could verbalize it.

• 59:55Jason Calacanis?

  Exactly. So that's like being a chess player. And you're just like, yep, I win. And it's like, we're four moves in. It's like, yeah, you made a mistake. And here's how it's going to end. That's not what they want to hear. You know, it's like a master Jedi with their padawan or something. And they're just like, yeah, I just took off your two legs and your arm and you know, game over. You gotta like, kind of slow down to speed up. So I just slowed down. And I asked very simple questions. And I started pacing the founder. Founder had high energy, it was going fast. I go high fast. If they're going slow, I just ask them. And then I edit something to the script when we meet with founders. Alex, very simple.

• 1:00:31Jason Calacanis?

  At the end of every call, when they pitch, I wrote the script for myself and then I trained everybody.

• 1:00:37Speaker 06

  Mm hmm.

• 1:00:38Jason Calacanis?

  Hey, Jeremy, may I repeat back to you my understanding of what you're doing here in the business to make sure I understand your vision.

• 1:00:45Speaker 06

  Yes, you can.

• 1:00:47Jason Calacanis?

  Okay. So you're building a business that makes a more affordable version of common mission critical SaaS products, and you're coming up with a new way to distribute it with these 2,800 affiliates. And at the same time, you're using a different business model that makes it easier and frictionless for people to give you money in advance of them using the product. Do I understand your vision correctly, Jeremy?

• 1:01:17Speaker 06

  I'd walk away with, how's this guy? How did you take? You remember that? That is so good. You know, like.

• 1:01:24Jason Calacanis?

  Yeah, that feeling you have is the feeling we all want to have, whether it's a friendship or a business. Alex wants me to be able to say to him, Alex, you know, it's great working with you. I know you care about your kids greatly, spending time with them, you love your wife, and you really care about journalistic integrity and fairness because you would even sacrifice your own salary when you were at TechCrunch to help the team. And cautious optimism, you know, really does embody what your passion is, which is to write every day and communicate these complicated topics. Like, he knows I understand what makes him tick because I listen to him, you know?

• 1:01:57Speaker 06

  And I can do Jason. Jason shows up to work every single day to make more money so we can play high stakes poker on television.

• 1:02:02Jason Calacanis?

  Basically, yes. I haven't been on TV for high stakes poker TV in a while. I gotta go back. All right, listen, Jeremy, you're awesome.

• 1:02:09Speaker 06

  Wait, Jay Cal, can I ask you one other question?

• 1:02:12Jason Calacanis?

  Please.

• 1:02:13Speaker 06

  And it was the one thing I wanted to learn while I was here at lunch.

• 1:02:16Jason Calacanis?

  Okay.

• 1:02:17Speaker 06

  Initially, on week zero, we had a what are your challenges?

• 1:02:22Jason Calacanis?

  Yes.

• 1:02:23Speaker 06

  And the one thing I came away with right there on the spot was I can come up with good answers, right? Like, I can come up with good answers. I eat, sleep, breathe the business, right? It's second nature. The thing that I would love to hear from you as the world's greatest moderator would be, how do you ask great questions?

• 1:02:47Jason Calacanis?

  How do you ask quick questions? You gotta listen to the answer. I'm gonna listen. You'll listen to the previous answer and then you form your next question.

• 1:02:56Speaker 06

  So it's always about proactively listening?

• 1:02:59Jason Calacanis?

  Active listening is a concept. It's interesting to say proactive. There is a concept called active listening in therapy and in the CIA and FBI and profilers, active listening, which is you're really thinking what the person's saying, how they're saying it, why they're saying it, boom, and you go from there.

• 1:03:17Speaker 06

  Yeah, I love it. Thank you.

• 1:03:19Speaker 00

  Jeremy, Jeremy, I was just throwing in 200% prep. That's my, Jason's dead on, but I undergird that with by doing more prep than anyone else will do. And when I talk to founders for like 2500 interviews and such, you can always tell the moment they realize that I cared enough to do the prep work and then they get so much happier. They just light up.

• 1:03:38Speaker 06

  I feel like I definitely get that sense from you. The way you geek out about S1s only wants to make me go public, you know? Every time I hear that, you get excited about it. I'm like, oh, I'd love to feed that excitement. You know, that's the only goal for us. So it really comes across.

• 1:03:55Speaker 00

  Air5.com and likeable.co are the two websites that I have up from you, Jeremy. Just wanted to give them a little shout out.

• 1:04:01Speaker 06

  Go there. We're launching the likeable.co today.

• 1:04:05Jason Calacanis?

  And we'll see you all next time on This Week in Service. Bye bye. Great job, Jeremy.