Black founders are tailoring the ChatGPT experience, and crypto makes a comeback

This week on Equity, we discussed some big news that really matters: How Black founders are addressing the diversity gap in AI chatbots. We’ve all noticed how OpenAI’s ChatGPT and other AI chatbot tools struggle with cultural nuance, often coming up with answers that reflect a largely Euro-centric worldview. Now, a handful of Black-owned chatbots and ChatGPT versions – like Latimer. AI, ChatBlackGPT and Spark Plug – have cropped up to ensure Black POVs are included in the AI conversation, and that Black founders get a cut of this trillion-dollar industry. That’s not all Rebecca talked about on Monday’s show. We also looked at how different social media companies are playing around with what’s real and what isn’t, an increasingly salient topic in the age of AI. On the one hand, we’ve got TikTok’s introduction of generative AI avatars, which creators and brands can use to speed up ad campaigns and spread them out to a global audience. And on the other hand, YouTube is experimenting with a “Notes” feature that lets users add context to videos. It’s an attempt to combat misinformation as AI threatens to inundate us all with deepfake and misleading political content in the lead up to the 2024 presidential election. In IPO Land, Rebecca touched on Tempus’s 9% rise and $441 million raise on its Nasdaq debut last Friday. The genomic testing and data analysis company, started by Groupon’s founder, need have only hinted at its future genAI integrations for investors to throw money at it. Meanwhile, Chinese e-commerce giant Shein is struggling to get Beijing to approve its London IPO, reports the Financial Times. Shein’s executive chair reportedly angered Chinese regulators last month by saying its corporate values meant it “could be considered a US company,” so now the retailer is trying to walk back on those comments. Shein is trying to raise £50 billion (US$64 billion) from its London IPO, and it needs Beijing on its side to do so. Haje closed out today’s show with a teardown of Kinnect’s $250K angel deck. Founded just last year, the digital archive startup is already making waves with $100,000 in funding from Techstar’s Rising Stars program. Hit play to hear how they did it! Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo, and posts every Monday, Wednesday and Friday. Subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. You also can follow Equity on X and Threads, at @EquityPod. For the full episode transcript, for those who prefer reading over listening, check out our full archive of episodes over at Simplecast. Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:11Rebecca Bellan?

  Hello and welcome back to Equity, TechCrunch's flagship podcast about the business of startups. This is our Monday show where we take a look at the weekend and get you ready for the week ahead. Today is June 17th, 2024, and I'm Rebecca Bellan, a senior reporter at TechCrunch. It's a beautiful morning now, although we are getting ready for an incredibly hot week in New York. Just the thing to get us all hot and bothered for today's tech news. Let's get caught up. On today's show, we have how black founders are creating tailored ChatGPT experiences, TikTok's AI actors, IPO news from Tempest and Shein, the return of crypto, and to close out today, Hy is back with a pitch deck teardown for Connect. Let's get started.

• 0:50Rebecca Bellan?

  Let's dive into the big news that matters. For our first story today, black founders are creating tailored ChatGPTs for a more personalized experience. As you may have noticed, ChatGPT and other AI chatbot tools sometimes struggle with cultural nuance, often spitting out answers that largely reflect a Eurocentric worldview. A handful of black-owned chatbots and ChatGPT versions like Latimer.ai, ChatBlackGPT, and Sparkplug have cropped up to ensure black points of view are included in the AI conversation and that black founders get a cut of this trillion-dollar industry. As Tamara Huggins, founder of Canada-based Sparkplug, told TechCrunch, "We are the keepers of our own stories and experiences.

• 1:30Rebecca Bellan?

  We need to create systems and infrastructure that we own and control to ensure our data remains ours." What does that look like? Well, here's an example of the same question as to ChatGPT and ChatBlackGPT Beta. The question is, what is the culture? OpenAI's ChatGPT said, "The culture refers to a fictional interstellar society featured in a series of science fiction novels and stories from Scottish writer Ian M. Banks, one that's characterized by its advanced tech, post-scarcity economy, and highly anarchist socialist and libertarian aspects." Meanwhile, BlackGPT said, "The culture is a term frequently used within the black community to refer to the shared experiences, expressions, norms, values, and practices that are unique to the people of African descent who've lived in the US and across the African diaspora.

• 2:15Rebecca Bellan?

  Things like language, music, dance, fashion, religious beliefs, and social habits that have been passed down through the generations, from jazz and hip-hop to the ability to create spaces of joy and resistance in a society that has marginalized them." Chatbots like these are an important step in creating more racially inclusive and culturally accurate data to combat entrenched societal biases as AI becomes more a part of our lives. The problem of lack of representation in AI and how that presents in data sets and outcomes is something we've touched on this show before. So I absolutely love this initiative. Can we please have one for women? Next up, we're looking at what's real and what isn't on social media. First up, TikTok is introducing generative AI avatars.

• 2:59Rebecca Bellan?

  I guess TikTok creators aren't protected by the agreements from the Hollywood actor and writer strikes. The social media company, which I remind you is owned by Chinese parent company Byte Dance and is currently in a legal battle with the Biden administration to go American or go home, is bringing a new level of creepy to its platform. Creators and brands can now use custom avatars as digital representatives. That means creators can choose to scale their likenesses to create multilingual avatars and expand their global reach and brand collaborations. And brands can create avatars out of their own spokespeople or out of creators they've partnered with before to localize global campaigns. TikTok is also bringing "stock avatars," a new phrase that I already hate, into the mix. These are pre-built avatars that are created using paid actors and that are licensed for commercial use.

• 3:44Rebecca Bellan?

  The idea, as TechCrunch writes, "is to give businesses a way to add a human touch to their content." Oh, the irony. The new AI features should help TikTok and the creators and brands that use it sell more stuff on the platform. But while TikTok aims to warp your senses of reality, YouTube is introducing a new tool to help combat misinformation on the platform. TechCrunch got the scoop that YouTube is experimenting with a new notes feature, à la X's community notes, that allows viewers to add notes that provide more context and information underneath videos. Things like, "Hey, this song is a parody," or "This is actually an old event presented as current news." It's a push in the right direction of combating misinformation during a tense election year. Listeners, if this sounds familiar, that's because late last month, we reported on Google

• 4:28Rebecca Bellan?

  running a batch of cartoon ads on YouTube, Instagram, and Facebook called "Prebunking with Google." They highlighted common methods of spreading misinformation via email and social media. So we'll be keeping our eyes open for other companies walking the line of what's real and what isn't in the age of AI.

• 4:45Rebecca Bellan?

  Moving on in the last bit of AI news, I swear, Tempest is demonstrating investor appetite for a health tech with the promise of AI. Tempest is a genomic testing and data analysis company started by Groupon's founder, Eric Levkovsky. It had a warm welcome on the Nasdaq last week, rising 15% and raising $441 million on the opening. This is perhaps a signal that investors are frothing for startups that not only do health tech, but do it with a promise of GenAI. Never mind that Tempest's AI revenue only accounted for 1% of its total revenue in 2023. The company's prospectus clearly states that its AI product line is nascent, but it intends to "embed AI, including generative AI," in every aspect of its diagnostics tools.

• 5:29Rebecca Bellan?

  Also in IPO news, per the Financial Times, Shein's executive chair, Donald Tang, claimed last month that its corporate values meant Shein could be considered a US company. Now, the retailer is trying to walk back on those comments. Why does this matter? Beijing has not yet greenlit the company's application to list outside of China ahead of its planned London IPO, despite Shein submitting materials to the China Securities Regulatory Commission last November. A source told the Financial Times that Beijing signing off on Shein's foreign IPO would "equate to unofficially endorsing the founder's model of de-Chinifying to gain business success," something Chinese regulators have tried to halt in the past by blocking foreign IPOs. In our ongoing hunger for IPOs, regular listeners will know we've been watching Shein's

• 6:14Rebecca Bellan?

  progress and will be keeping an eye out for the e-commerce giant's future gains. According to Yahoo Finance, Shein is looking to raise £50 billion, which is about $64 billion US, from its London IPO.

• 6:29Rebecca Bellan?

  And before we head into today's Pitch Tech teardown, a question for you all. Is crypto back? Over the weekend, Bloomberg reported that crypto startup funding has hit $100 billion since around 2014, when we all started being like, "Wait, what's Bitcoin?" Many of you might have thought that increased regulation and the death of FTX was leading to crypto's downfall, but we're actually starting to see some more investment in the space as of recently. According to PitchBook data, crypto funding was up $2.5 billion in the first quarter of this year, up from a recent low of $1.9 billion in the fourth quarter of 2023. With that uptick, we're seeing the return of eye-catching billion-dollar valuations for startups like Farcaster, Barachain, and Hidden Drone Partners. Can we expect to see more? Per Bloomberg, some of the top VCs in the space are Coinbase Ventures, which tops

• 7:13Rebecca Bellan?

  the charts with 443 investments, or roughly 4% of all deals since 2017. Anamoka Brands and Outlier Ventures claim the second and third spots, respectively. So we'll be keeping an eye on activity from them and others. Aside from funding, we're also seeing consolidation. Earlier this month, we reported on Robinhood's acquisition of global crypto exchange Bitstamp for $200 million, a sign that more M&A activity could be on the way.

• 7:42Rebecca Bellan?

  That's it for me this morning, but keep an eye on TechCrunch for even more tech, startup, and venture news. As always, if you want to dive deeper into anything we talked about today, we'll have links to the stories we covered in our show notes. Now, let's check in with Haya Camps for today's PitchDeck teardown. Take it away, Haya.

• 7:59Speaker 01

  Thank you, Rebecca. All right, everyone. If you're new here, I'm Haya Camps, and it's time for another PitchDeck teardown. This week, we're looking at Connect's $250,000 angel deck. Connect is a cool new startup that's all about preserving those precious family memories. It's like your digital family scrapbook, but supercharged. It's not just for photos. Think of it as videos, audio recordings, and a slick timeline to keep everything organized like a pro. It was founded just last year, and it's already making waves with $100,000 in funding from Techstars Rising Stars program. And I took a quick look at the PitchDeck for TechCrunch, and here's what I found. One thing I really enjoyed is that the company really plays on your heartstrings and then backs it up with statistics. The stats are clear and impactful.

• 8:43Speaker 01

  Approximately 44 million American adults are significantly lonely, and more than 30% of older adults are feeling isolated. Now, the numbers specifically don't matter that much, but the use of emotive and powerful language effectively underscores the urgency and magnitude of the issue. And it makes it clear that it's both widespread and a pressing problem to boot. It also does a really good job of putting an emphasis on the impact of the problem. The company painted a vivid picture of the problem's effects, which really helps investors understand the depth of the issue and they are able to dream big about the potential market for Connect. The final thing I really loved was a "why me?" element in the team slide. The company's founder, Omar Alvarez,

• 9:24Speaker 01

  shared his personal experiences, including losing his grandfather to Alzheimer's a few years ago and losing a friend to leukemia a month ago. It paints such a vivid picture of his motivation and it shows that this isn't just a business endeavor for him. It's a deeply personal mission and that's an incredibly believable story. Now, it's not all rainbows and unicorns though. There's a couple of things that are not entirely right. There's a bunch of information missing, for example. Crucial details like a go-to-market strategy, user acquisition plans, team member credentials and concrete milestones are all not there. Filling in these gaps are essential because it helps give a comprehensive pitch and it shows that the founder knows what they're doing. Talking about the founder, his slide needs some polishing to really shine.

• 10:08Speaker 01

  The founder boasts over 10 years of experience, which is a cool story, but who cares if it doesn't tie back to the company? There's a glaring lack of founder-market fit here and even looking him up on LinkedIn shows that none of the past gigs even made a cut on their profile. So what exactly has he been doing all this time? And which roles did he play in all of these companies? It's a little bit of a womp-womp moment and it makes me really kind of nervous about continuing the conversation with this founder. There's a red flag and I don't really know what the red flag is. Easily avoided, don't make that mistake. The other thing I want to highlight is the business model. It's a little bit pie in the sky. The company says it's gunning for $200 million of annual recurring revenue and that's cute, but let's talk reality here.

• 10:53Speaker 01

  Finding customers that are willing to drop $80 a year on something that doesn't really scream urgent need is a really tall order. I would have loved to see some real-world examples of families that are happily paying that amount of money for similar services because right now it's a little bit of a head-scratcher. And even more importantly, what is this product doing that Facebook isn't already doing for free? Right, let's do a quick recap. So what can you learn from Connect's pitch deck? Well, first of all, if it's appropriate, tie your startup story to your own. It really makes things come to life. Number two, show the impact of your problem because it helps give a sense of scale and it helps investors get pretty excited. And make it feel urgent, make it feel of the now and make sure that it's like this,

• 11:36Speaker 01

  "Oh, we have to get behind this now." So what can you learn from Connect's pitch deck that helps you improve your own? Well, for one thing, make sure you use a checklist to ensure that you have all the info that investors are expecting. Make sure you have a great founder market fit. Why are you the right person to start this company? And make it believable. You get to be bold, you get to dream big, but remember, if you're relying on behavior change, make me believe that you can pull it off because that stuff is really, really hard. Right, so we've been doing pitch deck teardowns on the podcast for a couple of weeks now, and I'd love to hear your feedback. What do you want more of? What do you disagree with? What are you excited about? I want it all. You can email us at [email protected] and tell me what you think.

• 12:20Speaker 01

  All right, that's it for today's episode, but don't you worry, Equity will be back on Wednesday. If you want to keep up with us in the meantime, you can follow Equity on X and on threads under the handle @equitypod. And if you want to submit your pitch deck to a pitch deck teardown, check out today's edition in the show notes and follow the "Submit Your Deck" link. Thanks again for listening and we'll talk again soon.

• 12:41Speaker 02

  Equity is produced by Teresa Loconsolo with editing by Kel. Bryce Durbin is our illustrator and we'd like to give a big thanks to our audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thanks so much for listening and we'll talk to you next time.