OpenAI's latest "bizarre" mega-deal, datacenters in space, previewing Tesla's big announcement and more | E2189

Today's show: *How many weirdly circular mega-deals is OpenAI going to sign this year? On a new TWiST, Jason and Alex consider OpenAI's latest agreement with AMD, how the biggest American companies keep trading cash and chips back and forth, and whether or not the entire AI economy might be a house of cards. PLUS what kind of fan/leafblower tech is Tesla working on… what can Jevons Paradox tell us about the AI landscape… how easy is it to master games in the YC Arena… and WHY has NASA never built a base on the moon? We're asking the TOUGH QUESTIONS so you don't have to, only on the #1 tech podcast, "This Week in Startups." Timestamps: (0:00) Jason and Alex open the show discussing hunting and traditional Texas meat exchanges (2:16) ANOTHER weirdly circular OpenAI mega-deal? How many mega-deals can one company MAKE? (3:50) Are all these "bizarre" OpenAI deals creating a house of cards? (10:00) Stripe Startups - Stripe Startups offers early-stage, venture-backed startups access to Stripe fee credits and more. Apply today on stripe.com/startups. (20:00) Oracle - Try OCI and save up to 50% on your cloud bill at https://oracle.com/twist⁠⁠⁠ (21:14) Is the Tesla Roadster 2 coming soon? Or maybe a leaf blower?! (22:00) Datacenters in space! Is it getting crowded up there? (26:22) Why no moon base yet? Jason demands a moon base. (27:00) We're playing games in the YC Arena… Can Jason guess which pitches got accepted? (30:00) Coda - Empower your startup with Coda's Team plan for free—get 6 months at https://www. Coda.io/twist (32:00) How Jason picks companies to invest in, based on a few signals and metrics (04500) We found out what Figure's bots are actually doing for BMW (53:00) Sharpies figured out how to make their pens here in the US… who's next?! (57:00) Could ChatGPT really replace Deloitte consultants? Considering the latest controversy… (01:03:29) It's another Gamma Pitch: Welcome Ryan Yannelli of NextVisit AI, which helps therapists take notes 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 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: Stripe Startups - Stripe Startups offers early-stage, venture-backed startups access to Stripe fee credits and more. Apply today on stripe.com/startups. Oracle - Try OCI and save up to 50% on your cloud bill at https://oracle.com/twist⁠⁠⁠ Coda - Empower your startup with Coda's Team plan for free—get 6 months at https://www. Coda.io/twist 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

  I love living in the present, man. It's great. Like, we're talking about real data citizen space. So cool.

• 0:05Jason Calacanis?

  I mean, how do we not have a base on the moon 55 years later? It seems like we should. And if you asked anybody who watched the moon landing, "Hey, when do you think we'll have a base on the moon?" They'd be like, "I don't know, 10 years, five years? I mean, we're going to go up every year now, right?" And it's like, "No, we're just never going to go back. It has no importance. I want to know what the hell's going on. I hope I live long enough to understand something about the nature of the universe.

• 0:38Speaker 00

  This Week in Startups is brought to you by Coda. Coda empowers your startup by bringing words, tables, and teams together. Strategize, plan, and track goals effectively with all your valuable data in one place. Go to coda.io/twist to get started for free and get six free months of the team plan. Oracle. Oracle Cloud Infrastructure, or OCI, is a single platform for your infrastructure, database, application development, and AI needs. Save up to 50% on your cloud bill at oracle.com/twist. And Stripe Startups. Stripe Startups offers early-stage, venture-backed startups access to Stripe fee credits,

• 1:21Speaker 00

  expert insights, and a focused community of builders. Apply today on stripe.com/startups.

• 1:28Jason Calacanis?

  All right, everybody. Welcome back to This Week in Startups. It is Monday, October 6th. Oh, my God, the summer is over and there is snow in the mountains. So I should be able to get on my skis next month. Very excited about that. With me again, Alex Wilhelm. How are we doing, Alex?

• 1:44Speaker 00

  Fantastic. We were just discussing the importance of deer hunting before the show, and I just want to say it on record. Summer sausage is the reason why everyone should go hunt deer, because it's the best thing in the world and was a key food ingredient to my youth.

• 1:55Jason Calacanis?

  Oh, really? Summer sausage? Okay, good to know. You know, I'm living here in the great state of Texas. Frequently people, I'll see them and they'll hand me a bag. Oh, great to see you. I brought you some sausage. I went boar hunting. I went deer hunting. I, you know, whatever. And people just hand you meat. It's the nature of the place. Like, people are wearing guns on their hips. They're handing each other meat. I'm chewing on a cigar. I love it. I love it here. Uh, really enjoying my second year in the great state. Uh, yeah, deep into my second year. And, uh, let's get started. I saw OpenAI and AMD are doing a deal. And this deal comes on the heels of just

• 2:38Jason Calacanis?

  two weeks ago or last week, Jensen putting a hundred billion into

• 2:42Speaker 00

  Yeah.

• 2:42Jason Calacanis?

  OpenAI. So I'm confused. Tell me everything.

• 2:46Speaker 00

  Okay. So we're talking a lot about Project Stargate, Jason, and all the deals that are part of OpenAI's, the American AI model companies, infrastructure push. This is part of that. You are correct. A couple of weeks ago, they announced a $100 billion deal with Nvidia that appears to be kind of like a share trade for, uh, hardware. The AMD deal is a little bit different and it could be smaller. So the gist is this. AMD is going to supply OpenAI with up to six gigawatts worth of GPUs. Not all at once, in several tranches. The first one will land in the back half of 2026 when their new GPU comes out. I think it's the 4150 in their line of GPUs.

• 3:27Speaker 00

  As part of this deal, OpenAI gets to purchase stock in AMD at one cent per share, the par value of its stock in tranches again. So every time it buys a bunch of GPUs, it gets to buy a bunch of their stock for one cent per share. About 10% of the company is the way this one's going to shake out, but it's a lot of GPUs. It's a lot of stock. And soon Sam Altman will own a sizable chunk of AMD, the largest of any single shareholder in the world.

• 3:52Jason Calacanis?

  Well, OpenAI will own, uh, not Sam personally, obviously, just to make that super clear for the audience.

• 3:58Speaker 00

  Fair enough.

• 3:59Jason Calacanis?

  Yeah. Um, and so this is very non-traditional. To say the least.

• 4:05Speaker 00

  To say the least. Yes.

• 4:07Jason Calacanis?

  Yes. So.

• 4:10Jason Calacanis?

  OpenAI is buying a bunch of compute from AMD. Great. The money they're using to buy that is not AMD's money. AMD is just a supplier to them. AMD is not investing in OpenAI.

• 4:26Speaker 00

  Based on, yes.

• 4:28Jason Calacanis?

  Unlike Nvidia, which did invest in OpenAI, correct?

• 4:32Speaker 00

  That's my understanding of this. We do have an SEC filing in the case of the AMD offering, which is where we got the one cent per share point. And as far as we can tell, that's exactly correct, Jason. But no matter how you slice it or how the money moves around, it's OpenAI securing quite a lot more compute capacity for the next couple of years. So it all kind of fits into the same direction. They're just tinkering with the right methods to figure this out. But I just didn't see OpenAI buying a 10% stake in AMD. I just, that's, that, that was not on my bingo card, if you will.

• 5:03Jason Calacanis?

  Yeah. So if they're buying all these chips, it says here in our notes

• 5:11Jason Calacanis?

  that they could be spending as much as, I don't know, $90 billion in AMD hardware. So where does that money come from? Well, Nvidia just said they would invest $100 billion into OpenAI. OpenAI obviously has other investors. So did they take money from Nvidia and Jensen and then invest it into, and then are going to buy AMD shares? And their shares went up like 40% today, right? Like the market had a huge reaction.

• 5:42Speaker 00

  Huge reaction. But going back to the Nvidia OpenAI announcement, that the text is to support this deployment, including data center and power capacity, Nvidia intends to invest up to $100 billion in OpenAI as the new Nvidia systems are deployed. So essentially, they're going to buy stuff from Nvidia. And then I think Nvidia gets shares in OpenAI versus in the AMD deal, they get, they're going to buy GPUs from AMD and then they get stock in AMD. So I think it shows the relative power balance between Nvidia on one side lots and AMD on the other side less.

• 6:12Jason Calacanis?

  Yeah, um, this is bizarre and. Tell me why, tell me why. Well, obviously Nvidia and AMD are in competition. And so it's fine if you have a ton of money and you go out and you start buying from two different suppliers. I wouldn't expect anything else, right? You want to have a competitive marketplace. So that makes total sense, right? You you don't want all your eggs in one basket if you are OpenAI. But the thing I find weird is the equity components of these deals. So Nvidia, investing a ton of money and buying shares in OpenAI. And then OpenAI, OpenAI is obviously buying a ton from Nvidia. That screams of, uh, round tripping.

• 6:56Jason Calacanis?

  And I'm sure that they are well aware of that and have been very thoughtful about outlining that. And then you have this deal, which is, hey, we'll buy some from you and we get some warrants. That's not unheard of, but it certainly is non-traditional. It just feels like there's a lot of money circulating around. And the most critical interpretation of this is that, uh, people are investing into OpenAI. And they're buying more revenue. And buying revenue and round tripping is a big no-no. So I think that this is gonna create a lot of interesting.

• 7:44Jason Calacanis?

  You know, knocks on the door from like BSEC and places like that to just understand what's going on. And OpenAI wants to go public next year, so if they do go public, a lot of this information is going to be shared. But this is all based upon OpenAI successfully becoming a for-profit company. Sure. And that hasn't happened yet, so. This is like, I don't want to say it's a house of cards, but there are a lot of interesting variables here. It feels very non-traditional. It's, uh, yeah.

• 8:16Speaker 00

  But the other side of that coin, though, just thinking out loud with you as you talk about this, OpenAI is a non-traditional company in its scale and how much it's changed, I would say, the world. And it's also facing a, what appears to be a chronic compute drought somehow still this far into the AI cycle. So could it solve a non-traditional problem using traditional methods of raising money and so forth? Probably not. But I absolutely agree that what we're seeing here increasingly sounds circular, risky, and also like, it's a form of just leveraging Jason or risk. It feels like quite a lot could go wrong in many companies if demand for AI services doesn't yield the amount

• 8:57Speaker 00

  of usage that OpenAI is pre-buying capacity against. Because the AMD deal doesn't really kick off until the back half of next year, when these new GPUs come out, that AMD is so proud of.

• 9:06Jason Calacanis?

  That is another good point, is what if, um, they don't need this compute? What if, uh, it levels off, you know, the impact of compute on the product getting better? That's actually a very interesting question. A lot of people are having, we've made this analogy many times before, but it feels similar to the dot com build out of, uh, fiber. And they built up so much fiber and they're, you know, the music industry, the movie industry wasn't allowing their content to be streamed. There was no YouTube when that was being built out. So, and storage was wildly expensive. Transport of, uh, video across that fiber was still pretty

• 9:47Jason Calacanis?

  expensive. So, yeah, this, this is probably all, um, we might be building out far more capacity than we need if all these deals do, um... You know, come to fruition. Okay, there's so much exciting innovation happening every day in AI. And so many companies are just shipping all these amazing new tools. But hey, these AI startups pose several specific challenges. They require a lot of flexibility and an infrastructure that can scale up fast. Thankfully, Stripe Startups is here to help. Yes, our good friends over at Stripe are offering early-stage venture-backed startups access to a whole suite of perks. Stripe fee, credits, insights, and mentorship from experts in your field.

• 10:30Jason Calacanis?

  Tools that help you reduce decision fatigue and stay focused. And membership in an active community of real builders. More than three out of four startups in Forbes's AI 50 are already using Stripe for payments, billing, invoicing, and taxes. Giving you an overall view of your revenue so you can make smarter, more informed decisions. Learn more and apply for the program today by visiting stripe.com/startups. That's stripe.com/startups.

• 11:02Jason Calacanis?

  Or maybe superintelligence, you know, takes off. And we have so many jobs to run to cure cancer, to build bigger bridges, to solve math equations that will use it. And that's that Jevons paradox, I guess.

• 11:18Speaker 00

  Jevens, yeah.

• 11:19Jason Calacanis?

  Jevens paradox that people keep talking about, like the induced traffic paradox. So it's going to be a while to see. And I think I heard on CNBC today, they said 80% of the gains in the stock market this year came from the AI trade. I don't know if that's exactly true or how they're calculating it. But my Lord, you know, there is a lot of AI spending going around.

• 11:46Speaker 00

  Yes, as we record this, Jason, OpenAI is having its dev day. Thank you for everyone who tuned into us live in contribution of sticking around with Sam. But they did announce as part of that live stream that ChatGPT now has 800 million weekly active users, Jason, so plus 100 million from the last milestone. At least for now, implying there's plenty of capacity needed to be built out, so.

• 12:08Jason Calacanis?

  And for those of you wondering, producer Claude gives us a great, and you can pull this up, Alex, if you have a moment, Jevons paradox, J E V O N S is a counterintuitive economic principle that shows how improving efficiency can actually increase total consumption of a resource rather than decrease it, named after the 19th century economist William Stanley Jevons, who observed it with coal use in England. The paradox works like this. When you make something more efficient to use, it becomes cheaper to use, the lower cost then triggers several effects. Direct rebound, people use more of it because it's cheaper. Indirect rebound, the money saved gets spent on other things that also consume resources.

• 12:49Jason Calacanis?

  So your fuel savings might fund an extra vacation flight, which also uses fuel, or a second home. Economy-wise effects, the cheaper resources enables new applications in industries that weren't economically viable before, expanding total demand. And air travel would be an example of that. It just wasn't, it wasn't cost effective. And then it became so cheap that now, you know, Spirit Airlines can take you anywhere. So there you have it, folks.

• 13:14Speaker 00

  Yeah. And if you want to use Claude like we do, head over to claude.ai/twist. You can't do everything that we do without a paid plan, but Twist listeners get 50% off their first three months of Claude Pro. Go to claude.ai/twist to get started. All right, Jason, let's move on from the OpenAI buying the entire world and instead talk about one of your favorite companies, Tesla, which has a new teaser video out that has a very interesting sound effect in the background. I'm going to pull that up now and I want you to tell people what you're hearing in this clip.

• 13:46Jason Calacanis?

  I'm listening deeply. And this is like some sort of a fan blade. It looks like it's spinning, you know, those little fans you have in your computer, but it looks bigger. And it says 10/7, which I guess would be tomorrow. There'll be an announcement. I think I know what this is, not because Elon told me or I got some intel. The Roadster 2 is, I believe, coming this year or in another seven. This is like the Vanity Project of one Vanity Project. Sorry. And it's super late on Elon time. You know, he's frequently late, as I always tell people, frequently late, but never wrong. He always gets it done in the end and typically does it in such extraordinary fashion that your mind is blown.

• 14:28Jason Calacanis?

  So he did say at some point he was going to create a leaf blower, I think as a joke, a quiet one, because he was so annoyed with leaf blowers outside of his house that are gas powered, and we have those in the market. So I don't think it's a leaf blower. In order to drive really fast, you need to have downward draft. And there's a number of ways to do that. Typically, the air coming into the front of a car can go through different vents and push pressure down, where you have a spoiler at the back, which will push pressure down. And sometimes you'll see, as in F1 racing, as we've been talking about on the show, you know, a car goes flying, right? Wind gets underneath it, not a good situation.

• 15:10Jason Calacanis?

  There is an EV hypercar called the Murtry, if I'm pronouncing it correctly. M-C-M-U-R-T-R-Y. Hypercars are cars that cost over a million dollars and can go typically well over 200, maybe even 250 miles per hour. And, you know, this is like the higher level than your typical Ferrari or Lamborghini. Oh, yeah. And so this car, and we'll show a video of it, can literally drive upside down. And the reason it can do that, this million dollar car, is because it has fans underneath it that create that downward draft.

• 15:51Jason Calacanis?

  So these fans are pulling the car down, is my understanding of it. And here, they're showing the car with those fans on, and they're slowly rotating it. It says it's got 2,000 kilograms of downward on-demand force from zero miles per hour. So why is this important? If you're making some insane turn, you're going to grip the road. That's what the tires are for as well, obviously. So I think this could be the downward drift fan for...

• 16:19Jason Calacanis?

  The new Roadster 2.0.

• 16:22Speaker 00

  You know, the whole, the whole team was dying watching this clip right now because if their car drops, they have to build a new one. So can you imagine?

• 16:30Jason Calacanis?

  Well, there's also a driver in there.

• 16:32Speaker 00

  Oh, yeah, but he's fine. He's, he's fixable. He's replaceable. This car costs 1.27 million dollars.

• 16:38Jason Calacanis?

  No, it's driving forward and backwards. You just, you saw it drove a little bit forward? That's insane.

• 16:46Speaker 00

  It's absolutely insane.

• 16:47Jason Calacanis?

  I can't even believe they did this test.

• 16:49Speaker 00

  So prepping for this, I got to kind of poke around the McMurtry University people. That car, by the way, Jason's called the Spear Lane, and it's just about a million pounds or about 1.25 million USD. They took it around the Top Gear test track from the, the British television show. And not only did it set the fastest time of any car ever, including an old F1 car, it beat that by like five seconds. Like it was, it's crazy fast.

• 17:15Jason Calacanis?

  Yeah. The speed in these cars, there's, I don't know if Xiaomi or one of the electric car makers just went over three, well over 300 miles per hour in a car as well. So top speeds are going up. I think the top speed records though, will ultimately be a combination and the, and the winners are going to be hybrids where you have like the Corvette ZR1X, which I'm getting one of when they are not 100 over sticker. That car has a small, like the Corvette E-Ray, they took the lessons from the Corvette E-Ray. It has a small electric motor and battery. It can only go 10 miles on the battery, but it's just used to get you off the line really fast.

• 17:57Speaker 00

  Yeah.

• 17:57Jason Calacanis?

  And then you, you kick into the, to the ice engine. So.

• 18:03Speaker 00

  Jason, I'm going to show you just a really short clip here of the BYD Yangwang 09 Extreme hitting 308 miles per hour. This is in kilometers per hour in the top left. If you're watching the video. But what I like about this is just how the world seems so silly at this speed. Like the trees don't look real anymore as it accelerates past 500 kilometers per hour.

• 18:23Jason Calacanis?

  Don't recommend going that fast.

• 18:24Speaker 00

  Yeah, don't, don't do it. Especially if you're on a motorcycle near my house at night. Stop that.

• 18:29Jason Calacanis?

  Be careful, folks. Be safe. But yeah, so that's my best guess. The other guesses people had were the leaf blower. It could also be something to do with HVAC. He's been building the HVAC systems in the cars to be super efficient. And HVAC systems, like air conditioning and heat, these things have not advanced as much as they should. And he was talking about possibly building, in one of the calls, an HVAC system for like homes or for mobile homes, etc. So maybe there's an electric HVAC system coming.

• 19:07Speaker 00

  Don't some Teslas have that? Yeah, don't some Teslas though have that like pandemic mode when it like doesn't do outside air transfer? So that falls in the same kind of bucket to me.

• 19:17Jason Calacanis?

  Yeah, just efficient HVAC. What they found was the HVACs in ICE cars were never optimized because it's burn more gas. Who cares? You know, gas industrial complex wants you to burn gas. Why make it more efficiency? When you have a battery and you're trying to get miles and there's mile range anxiety, you look at every part of the car and you optimize. And the most inefficient part of the car, aside from the drag caused by air, is the HVAC system.

• 19:45Speaker 00

  Yep.

• 19:46Jason Calacanis?

  And that's why they would say like, oh, if you're running out of battery, turn off the HVAC. Well, they made their own. And yes, one of the features, the biodefense feature means it pushes air through very thick filters that can take out all those particles. It's quite nice, actually. I don't want to ruin your day, but have you taken a look at your cloud computing bill lately? They probably give you some kind of deal to start, but over time, those bills start to add up. Well, our friends over at Oracle Cloud Infrastructure want to help you cut your cloud bill in half. Yes, that's right, 50%, while you're getting better performance at the same time. OCI is a next generation cloud designed to work with any application, including AI. It's faster, it's more secure, and you can do

• 20:30Jason Calacanis?

  it for less. We're talking complete cloud infrastructure and services regardless of your specific setup or workload. And OCI costs significantly less than other Clouds with a span of 50 interconnected cloud regions and more than 150 OCI services apiece. So you can access your cloud from anywhere and keep your prices consistently low worldwide. So join modal, Skydance Animation, and more innovative AI tech companies who upgraded to OCI and saved. See if you qualify for half off at oracle.com/twist. That's oracle.com/twist. This offer is only for new US customers with a minimum commitment.

• 21:14Jason Calacanis?

  Especially if you have allergies here in Texas. It's kind of a necessity, but also keeping up with the, man, some of these places like Arizona and Italy and Texas, it gets so hot when it's 110 degrees. It's hard for your Tesla to keep up. And what they do here is, you know, all these cars have glass roofs now. Everybody buys $20 inserts on Amazon to block the roof. So you just get less sun into your car. So your air conditioner can keep up during July and August. The other option is to leave Texas in July and August. That's the option I'm taking most summers. Try to get out of here for six weeks.

• 21:52Speaker 00

  I mean, it's kind of like an inverse leaving New York for Florida in the worst of winter. You just got to get out of the heat. All right. One of my favorite startup categories in the world, Jason, is space. As a big science fiction guy, and one of the coolest companies that I've heard of is a company that wants to put data centers, not in the ocean, not on land, but up in orbit. And you flagged a great clip by Jeff Bezos talking about just that, which I have pulled up. I thought we would listen to it. And here what my fellow bald man has to say. Here he is.

• 22:22Speaker 02

  One of the things that's going to happen in the next, it's hard to know exactly when it's 10 plus years, but I bet it's not more than 20 years. We're going to start building these giant gigawatt data centers in space. So these giant training clusters.

• 22:37Speaker 02

  Those will be better built in space because we have solar power there 24/7. And the solar power there is, there are no clouds and no rain, no weather. So you can build, we will be, we will be able to beat the cost of terrestrial data centers in space in the next couple of decades. And so space will end up being one of the places that keeps making Earth better. It already has happened with weather satellites. It's already happened with communication satellites. The next step is going to be data centers and then other kinds of manufacturing.

• 23:15Speaker 00

  I cannot tell you how bullish I am about this.

• 23:18Jason Calacanis?

  It's, um, it's an exciting vision. I hope we live to see it. Uh, it's going to get a little crowded up there, I think. And of course you got to get the data back down to Earth. So that'll be a mitigating factor, uh, of course, but as the satellites, low Earth orbit satellites get faster, sure, it's completely possible. I don't think you're going to want, um, to do this too quickly because it's going to be expensive to put them up there. But as the cost to getting to space goes down and maybe the size and the weight of these H100s comes down, you also have the temperature. And I don't think in this clip, we had the temperature, he mentioned the temperature, but temperature is the other big issue.

• 24:01Jason Calacanis?

  It's pretty cold in space, as you know. And so you don't have the issue with, uh, having to cool down these, uh, you, you won't have the same cooling issues that you have here. So that's pretty interesting combination. The combination of, you know, more efficient solar and you don't need to cool it down could be a big win. I'm not sure when this happens, but, uh, there are a number of startups with crazy visions like this and they're worth keeping an eye on.

• 24:29Speaker 00

  Yeah, one of them is called Star Cloud, uh, previously known as Lumen Orbit. We actually had them on Twist, uh, January 17th of this year. If you want to check that out, episode 2073. And the company kind of got us idea for building space-based data centers, Jason, because they were working on doing space-based power. And then they discovered that they were going to lose 95% of that power they generated in space, beaming the power down via microwaves to the earth. So they thought, well, all right. If we're going to have power up in space, let's put the data centers up there. They want to use large modular four kilometer by four kilometer solar arrays. And to cool it, back to your point about in space cooling, they want to use these, they're building their own radiators, if you will, that are going to use black body radiation to get rid of the excess heat.

• 25:14Speaker 00

  And the CEO, Philip Johnson, told me that they need about, it's a one fourth as much space to do the heat dispersion than they need to collect the heat. So you can kind of, I think, glue it to the back of your solar panels and then have the heat go out that way. A lot of problems with this. They think that the biggest risk to this working is launch costs. So essentially, this company is a bet that SpaceX's Starship is going to not only get sorted out, but do lots and lots of trips up and down. One last note from them, just based on my interview, there's two markets for this type of work. One is you're dead on, getting data to and from the earth, processing in space and sending back down the results.

• 25:55Speaker 00

  But he also mentioned, the CEO of StarCloud, that there's a market in orbit for compute, which you can do via lasers between different satellites. So if you're, I don't know, Starlink, and you want to figure out your next array movement, maybe you just call up an in-orbit data center to do that very quickly without any disruption. So I love living in the present, man. It's great. Like, we're talking about real data centers in space. So cool.

• 26:18Jason Calacanis?

  I mean, how do we not have a base on the moon 55 years later? It seems like we should. And if you asked anybody who watched the moon landing, hey, when do you think we'll have a base on the moon? They'd be like, I don't know, 10 years, five years? I mean, we're going to go up every year now, right? And it's like, no, we're just never going to go back. It has no importance. I want to know what the hell's going on. I hope I live long enough to understand something about the nature of the universe. I'm just curious. I'd like to know.

• 26:48Speaker 00

  Y C, the video game. This is a find that we had a lot of fun with over here at the Twist offices. Jason, there's a new suite of online games called Y C Arena. This was put together by a student. He goes by M H I M E D 100 over on X, based in Berlin. TechCrunch covered it. I played with one of these games in the pre-show period, and I have my score. So I'm kind of curious, would you like to try to beat me live?

• 27:14Jason Calacanis?

  Uh, sure. Absolutely. I, I, I know exactly how the partners make decisions over there.

• 27:19Speaker 00

  All right.

• 27:19Jason Calacanis?

  I've talked to enough of them and I know the history of it. Uh, it's pretty straightforward and I will, uh, take this test. Now this is based on the fact that if you search on YouTube, there's a ton of people just post their Y Combinator applications to YouTube and then they put the URL into the.

• 27:38Speaker 00

  Yes. There are eight games though, Jason. So there's a variety of things. I was gonna have you do YC Guessr, but it sounds like you want to play YC Partner Simulator. And if you want to play and you're listening in, YCarena.com. But Jason.

• 27:50Jason Calacanis?

  This is the one where they play the video and you say if they got accepted, right?

• 27:53Speaker 00

  Uh, that's this one right here. Let's give it a try.

• 27:54Jason Calacanis?

  Okay, let's do it. All right, let's see. I'm listening in here. YC Partner Simulator. Start a game.

• 27:59Speaker 03

  I'm Omer Shor.

• 28:00Jason Calacanis?

  Hi.

• 28:00Speaker 00

  A little louder.

• 28:01Speaker 03

  Hi, I'm Arun. We're co-founders of Bada. Uh, we've been friends since, since 2010, being dorm, being dorm mates in college. Uh, post-college, we started this company called V Analytics, which was a driving behavior analytics startup. Uh, we were invited to interview for the, uh, Y Combinator Summer 2017 batch. And just last month, we exited V Analytics to a, uh, uh, larger telematics player entering India.

• 28:29Jason Calacanis?

  Okay, they're accepted.

• 28:30Speaker 00

  Okay, let's see what you got, right? Wrong call, rejected.

• 28:34Jason Calacanis?

  Uh, the reason I won't accept it before even hearing their next idea, it's three developers with an exit, where I assume they're three developers. They, they look like developers or kind of acting like developers or dressed like developers. Um, and this, it's always at, uh, Y Combinator, they want three people, they want two to be developers, they want multiple co-founders, they don't like idea people, they don't like pitchy people, they like hackers. But they're also Indian and depending on what time period, YC wasn't investing in India, uh, all that often. And then they started doing more investing in India. Okay, so I'm 0 for 1. Let's do the next one.

• 29:10Speaker 04

  Hello, I'm the CEO of Yellow Wave. And I'm Daniel. I'm the CTO. And our product enables companies to optimize deal profitability. We do this by connecting to their CRM system, getting sales and revenue data. And on the other side, connecting to the operational system, getting costs and resource data. And using this data, we analyze each deal to show its expected profitability, the different costs and how they're allocated.

• 29:35Jason Calacanis?

  Okay.

• 29:36Speaker 04

  Which enables our customers to optimize the profitability of each deal.

• 29:39Jason Calacanis?

  Hmm. Okay, let's pause this one. And oh, it has the year there. So this year is 2018, the application. So this is critical. So in 2018, SaaS was hot, and sales and CRM stuff, pretty hot. This seems like a small idea. I think they're Israeli, based on the accent. I could be wrong. And I'm going to say they accepted them. It's technical, it's niche. Let's see. You folks have any idea how many documents and spreadsheets I gotta look at every day, every week, every month? I'm reading this ad offer document right now. I'm gonna need my own personal data center soon. But this is why there's Coda.

• 30:20Jason Calacanis?

  It's the all-in-one collaborative workspace that's not only helping us here at launch, but working for over 50,000 teams all over the world. And they've got an amazing new feature that we've gotta tell you about. It's called Coda Brain. It's an AI that's been trained on all of your company's data and information that syncs to all of the tools you're already using. Coda Brain is not just going to eliminate constant searching and keep you organized, but it also crunches the numbers and provides you deep research and insights just based on simple prompts. And because it's powered by Grammarly, you know you're going to get clean, clear, crisp responses that are easy for you to understand.

• 30:58Jason Calacanis?

  So go right now to coda.io/twist and get six months of the team plan for startups free. That's C O D A dot I O slash twist for six months free.

• 31:16Jason Calacanis?

  Wrong again. So. These might be, both of these might be too niche, the ideas. Well, the first one, I didn't even hear the idea. But the second one, it might have been too niche. Okay, let's go next. Next pitch. Okay, here we go.

• 31:28Speaker 05

  I'm Jose, CEO and co-founder of The Mosted. Hi, I'm Daniel and I'm the CMO and co-founder of The Mosted.

• 31:34Speaker 06

  Hello, I'm Antonio Bernardino. I'm co-founder and CTO at The Mosted.

• 31:38Speaker 05

  The Mosted is a news content social media platform where people can discover the favorite news and start conversations and events.

• 31:46Jason Calacanis?

  No, reject. It's so- social, no.

• 31:48Speaker 00

  There you go.

• 31:49Jason Calacanis?

  Yeah, definitely not.

• 31:50Speaker 00

  So, so what, the point here though, Jason, is you can actually see historical YC pitches, see if they got accepted or not, and, and learn from them. Watching, I, I got six right, five wrong, so roughly the same ratio that you did. Uh, but it was fascinating to go back in time, see what was hot then, see how people present themselves, see what worked. And I gotta say, it's a great learning experience for founders who want to get in there and work on their pitching. Why not just go see what worked and what did not? I love it.

• 32:17Jason Calacanis?

  Yeah, it's, um, it's fun. You know, there's, there's a lot of like anti-YC vibes on X right now. It seems like there's a younger generation who finds them to be very establishment. Uh, and I think it's because they are very established, right? They've been around now for 20 years, so it is the establishment.

• 32:39Speaker 00

  Yeah.

• 32:39Jason Calacanis?

  Um, and there's so many people applying, which means more and more people don't get accepted. And their best advice to you is, oh, we'll wait six months and apply again. It's terrible advice. I mean, it's great advice for them. It's terrible advice for you as a founder. Um, if you get rejected, forward your rejection and your application, most importantly, to [email protected] and my team will take a meeting with you and give you some feedback and see if it's right for our program. I can tell you, nobody, when you get to a certain number of applications, nobody can tell you the difference between the top 5%. I could tell you, like, this is a top 10%, a top 5%, but amongst that 10%, I couldn't tell you,

• 33:20Jason Calacanis?

  this one's number one, this one's number 10, out of 10 companies, you know, out of the top in the 100. You probably would see, you know, reasonable investors from these programs pick a similar top, you know, five or six of the top 10 would be the same, but they're only accepting 1%, Alex. So, when you're accepting 1%, what they're doing is they're just looking for young people without families, who are developers. The more developers, the better, which means it's naturally going to skew more male. That doesn't mean they're hiring based on gender, or they're accepting based on gender. They're accepting based on developer or not. The percentage of female developers, I think, is still under 10% right now. Is my guess.

• 34:05Jason Calacanis?

  That could be old data that I have. But it's roughly, you know, in that range. Not computer science graduates. I'm talking about like developers working at a company. And sometimes companies will mix in UX and product managers and designers into the development group to kind of make their numbers look better. There's a lot of window dressing that occurs because people are under such a DEI attacks. Claude says it's about 20%. I think that number is a little inflated, but it could be one in five. But what that means is they're going to be accepting 80% males. Now, they will look for a female team member when they do their DEI stats, because all

• 34:49Jason Calacanis?

  these programs, all these venture funds were under so much pressure to share their stats. And I think to YC's credit, Techstars, they all shared their stats and They did. Yeah. And the way they gamed it was, is there a female founder on the team? And, you know, I'm not saying gamed it, but just the way they dealt with the criticism that it was overwhelmingly male is to just be like, do you have a female founding team member? And, you know, you can, you find a lot of them that have, you know, oh, the director of sales, the CMO, the growth hacker, the, you know, design, as if there are not gender differences in work. Like, there are, there are definitely careers that draw different groups of people. Doesn't mean that group of people can't do that career.

• 35:34Jason Calacanis?

  It just means there's a bias that people might pick different careers. The end, full stop. But that's all over now. In fact, if you were to do this kind of DEI reporting and stuff like that, you'd probably be advised not to do it and to tell everybody, do not pick based on gender, which I did from the beginning. Said, don't pick anybody based on gender. Don't pick anybody based on race. Do not pick anybody based on age, because I knew it was illegal to do that and you would get sued. But you had a countervailing force, which was, well, why is it so many white, Asian, Indian guys doing startups? And I just said, just make it based on merit. The chips will fall where they will.

• 36:13Speaker 00

  Speaking of things in merit, Jason, let's talk about launch for a second. You had a tweet that really caught my eye. You called launch, it's 35, launch patch 35 right now?

• 36:23Jason Calacanis?

  Yeah.

• 36:24Speaker 00

  Yeah, you called it the best accelerator class in launches history.

• 36:28Jason Calacanis?

  Yeah.

• 36:29Speaker 00

  Which is, I mean, honestly, I mean, after 35 classes, that's quite the claim. So talk to me about what's going on here at home.

• 36:34Jason Calacanis?

  Yeah, I just think we're getting more applications. I would say since All In started and became like a pop culture phenomenon, it's tripled the number of applications. And then we're now doing an explicit push to get to 50,000 applications a year. Well, most weeks have no problem hitting four or 500 applications, but I want to really get it to 1,000 a week. Now, we want 1,000 quality applications a week and we do 100 meetings a week. So we pretty consistently will do 100 first calls, 15, 20 minute calls. The more calls you do, the greater the chance that you're going to find a really outstanding company. That is the nature of what we do in Silicon Valley and in the investing game. So I'm just trying to get to 50,000 applications.

• 37:19Jason Calacanis?

  And then we stay in touch with folks and we have three ways to invest. They can come to Found University if they're extremely early, if they're in year zero, they're not incorporated, or they're recently incorporated, they haven't finished a product. Accelerator, if they have finished their product or close to finishing it, maybe have a couple of customers. And then the syndicate, we'll do a direct investment maybe from our fund. And then we have the syndicate, we'll send out high quality companies that are, you know, seed to Series A. So we have three ways to invest and if we can get to 200 investments a year next year and have 50,000 applications, that would be a pretty good number, I think, a pretty good balance. And so that's why we're saying no to good companies. We're saying no to great companies sometimes, which means if we do accept you, you're great

• 38:04Jason Calacanis?

  to excellent in our estimation. And the we try to do is just figure out, will a seed fund or, you know, a venture fund lead around in this company, either in this next round or in two rounds? Do they have that signaling? And I'm, I've developed quite an expertise in knowing what the signal is. Product velocity, deep understanding of customers, a kick ass team that really is inspired and hardworking. So when you find those things, and then obviously the business model, the go to market strategy, all those things will also matter, but team, product, customer, that little flywheel always wins. And you know, we're, we're humble enough to know that we're going to get it

• 38:47Jason Calacanis?

  wrong most of the time. And it's a very humbling, hard business to be a venture capitalist. You have these incredible moments where, you know, I wake up and my top two investments of all time, Robinhood and Uber, if you put the two share prices together at $250 and I paid pennies for those shares. So you can do the math as to like, you know, six, 7,000 X, you know, on Uber. And I don't know what I am on Robinhood. But yeah, it's, uh, it's humbling because those are two of my first hundred investments. And then there's 400 investments after there. Will those other 400 investments turn into Decacorns? Possibly. Or, you know, Centurion, I guess, for a hundred

• 39:30Jason Calacanis?

  billion dollar company. I, I hit two hundred billion dollar companies in my first 50 investments. It's kind of crazy.

• 39:38Speaker 00

  A trillion dollar company, it would be a thousand, thousand billion. So it'd be a milli- milli cord, I guess.

• 39:46Jason Calacanis?

  Who knows?

• 39:47Speaker 00

  Yeah.

• 39:47Jason Calacanis?

  Well, Centurions, I think, centimillionaires is what they call people who are over a hundred billion. So.

• 39:52Speaker 00

  Yeah.

• 39:52Jason Calacanis?

  Centacorns.

• 39:53Speaker 00

  The pathetic and miserly decimillionaires.

• 39:57Jason Calacanis?

  They're so annoying.

• 39:58Speaker 00

  I know. They always think they deserve a parking spot. Unbelievable.

• 40:01Jason Calacanis?

  Let alone millionaires. Oh, God.

• 40:03Speaker 00

  Oh, God.

• 40:04Jason Calacanis?

  So brutal.

• 40:05Speaker 00

  Uh, yeah. Don't mock the home team over here, Jason.

• 40:09Jason Calacanis?

  More work to do.

• 40:10Speaker 00

  All right. Uh, next up. So I'm really glad you talked about the three things you do, Angel University, the accelerator and so forth, because I found a really great question over on the startup subreddit. And I think it's actually a great question to answer in this context. So, um, Jay, Jay first, uh, asked, what do these investors want? They say, Jason, they invest as early as possible, that they're pre-seed investors, but Then the complaint was their first question is always what's your MRR or monthly recurring revenue? And this person put out a really funny kind of like translation guide for your venture speak. No traction required means you need traction. We invest in pre-seed really means we invest in seed stage companies that we're calling pre-seed.

• 40:55Speaker 00

  And then it goes on and on. But you're talking about the companies that you're picking. They're the highest caliber for both Angel U and also for Launch Accelerator. So what is this person either missing or not fully understanding about what the VC sees?

• 41:08Jason Calacanis?

  Sure.

• 41:10Jason Calacanis?

  If it's a team that is absolutely spectacular, that has worked together before and has had previous success. They will invest before the product is launched. For everybody else, you have to compete for those dollars. So if an investor, let's say a VC fund, you know, $300 million fund with five partners, they each do. They can each be on 10 boards, right? And there might be two or three funds in, which means net net, they probably put 20 to 30 names in each fund. In other words, each partner, if there's five or four of them is going to do five or six investments per fund. And then over two or three funds, they might have 12 active board seats or 10 or maybe as high as 15. So that's 60 board meetings a year, right?

• 41:55Jason Calacanis?

  They're quarterly, so keep that in perspective. They're going to do one deal. And if the fund is over three years, that means they're doing a deal a year. Maybe one year they do two, maybe another year they do one, but they're not doing, you know, a deal a month. Like we're doing a deal a week, two deals a week here because we're an accelerator and an incubator. It's very different. So you're in competition with everybody else. If you're an unknown group of founders, first time founders, the VC's probably got a line of people who have between 500,000 in annual revenue and 2 million who can't raise their series A. And those people are really frustrated. So as frustrated as you are, when you hear, oh yeah, no, we'll invest pre-revenue, pre-launch.

• 42:40Jason Calacanis?

  The caveat to that is if the team is legendary, if the team has had previous exits, if the team, you know, has an incredible skill and they built the most absurd product in the world, maybe. And it means if we can't find anything else, that's not a better bet. So you. Are taking, you know, what's on the, the, the website, hey, we invest pre-seed. They probably have. Oh, we invest when they have traction. Okay, they probably do that the majority of time, but you have to understand who they invest in pre-seed, which is legendary founders with track records.

• 43:19Speaker 00

  I'm trying to find the original news coverage of Brett Taylor's company, Sierra, that raised a bunch of money, Jason, right out of the gate as an example of how to get a lot of money early on, even if you don't have a product yet. Brett Taylor founded FriendFeed, which sold to Facebook. Then he became, he was high up at Facebook, then he was almost co-CEO at Salesforce. And he's done everything, right? So if Brett Taylor walks outside and says, I'm starting a company, checks fall from the sky. That's not everybody. I think that's the issue.

• 43:46Jason Calacanis?

  You're also obligated, Alex, if you made money with the previous founder's company and they have a new company, you're kind of obligated to say, okay, I'll seed the new one.

• 43:56Speaker 00

  Oh, because they made you money, they're not expecting you to come back around.

• 43:59Jason Calacanis?

  It would be rude not to. It'd be rude to turn down, you know, if you were a rule off and the founder of YouTube started a new company. Or, you know, you'd be like, of course we'll back it. Pretty hard to say no. And in fact, Sequoia, I don't think invested in Tesla and they had invested in X and PayPal, right? So, you know, it's pretty good evidence that you should, unless it's a complete vanity project, and even if it is a vanity project, you're probably going to throw in 250. And you might say it's not in the funds thesis, the partners couldn't get around it, but I'll personally put in 250K because you made me 10 million, right? So there's a little bit of that.

• 44:36Speaker 00

  If your friend stakes you in the poker game, you buy him lunch, you know?

• 44:39Jason Calacanis?

  Yeah, something, just common courtesy, let's keep it.

• 44:42Speaker 00

  All right, next up on the docket, an update from our friends over at Figure, the AI robotics company, Jason. We've talked about them quite a lot over the years, not only because they just raised a $1 billion round at a $39 billion valuation, but also because we talked about their use of their robots inside of a BMW plant where they actually live in production, where they just about to become live in production. We talked about the importance of not BSing your marketing, but the CEO put out a new video that I'm going to show you of their robot doing the thing we all thought it was going to do, repetitive work inside of a BMW factory. So Jason, for the folks out there on the audio version, tell them what's happening.

• 45:19Jason Calacanis?

  Uh, well, you've got a robot at a station with doors opening and closing and something being put in front of them for them to manipulate. Doesn't look particularly complicated, but it does look incredibly smooth. And it doesn't look like the robot is tethered, but it obviously is in a controlled box.

• 45:38Speaker 00

  Yes.

• 45:38Jason Calacanis?

  And the big controversy in the Wall Street Journal story, and I'm not sure when that story was, um, but maybe it was in 2024. I see there's a story with them for their funding round, but I'm not sure if that's the BMW story. Um, anyway, this BMW story came out, maybe it was in the spring of this year because Figure Robotics-

• 46:00Speaker 00

  April 2006. Sorry, April 6, 2025.

• 46:04Jason Calacanis?

  So there, the founder Brett is, um, obviously very talented. He has raised a ton of money and there have been realistic questions of how do you raise 675 million? How do you raise a billion without having a product in market to our previous conversation? Well, he's gone the non-traditional route in who he's investing from, according to his tweets. He tweeted, you know, he's got a different pool of investors. They're obviously not valuation sensitive. There's been a lot of criticism about SPVs, special purpose vehicles, which we do at the Syndicate, which is what Angel List does and other folks. We do it at an early stage, but these late-stage ones, people just take 10% of the money invested.

• 46:47Jason Calacanis?

  In other words, they don't take carry. So they're like, you want to put $10 million into Figure, I'll do that for you. I have an allocation. They go to a bunch of rich people and they, nine million goes into Figure and a million goes into that SPV person's pocket. And maybe the minimum check size is 500, so they get 20 people. And, and that's actually maybe a fair trade. Um, if that 10 doubled in value, it'd be 20%, so you'd take 2 million. Uh, but those SPVs, uh, can upset VCs who want to invest in the company at a reasonable price so they can get 10 or 20 times their money. Whereas retail investors might be happy to just be in a fun name and tell their friends. At the poker game, I own OpenAI shares. I own SpaceX shares.

• 47:30Speaker 00

  Yes.

• 47:31Jason Calacanis?

  And if I double my money, I triple my money. And if it's as good as the stock market index or better, I feel pretty good about myself. A VC can't make a living because of all the duds in their portfolio. In that way. So there's a bunch of tension. I think Figure has been caught up in that tension.

• 47:47Speaker 00

  Yeah.

• 47:47Jason Calacanis?

  Where these SPVs, and I think VCs are insulted by this concept that there are what they consider hucksters out there, running SPVs and running traffic between high net worth individuals or the dentist crowd, you know, and, you know, taking a vig, you know, a percentage of the investment as opposed to being long-term partners with the company. It feels transactional to them. But founders get to choose, and so do the dentists or the high net worth individuals who, you know, they fancy themselves stock pickers and they want to pick, I want to be in Figure. It's their right. I want to be in SpaceX. I want to be in OpenAI. We talked about the $500 million valuation for OpenAI. I could think of many different places to put your money

• 48:32Jason Calacanis?

  that could get a much better return in public companies, you know, that you can just buy without having to pay a 10% onboarding price or a 5% onboarding price or any carry. You don't have to pay carry when you buy stocks. So it doesn't make any sense to me. I would, I would almost guarantee that if you took the investment in, I don't know, something like Figure or something like OpenAI, and then you put it into the Mag7, I don't think you'll see much difference in 10 years.

• 49:02Speaker 00

  No, no.

• 49:03Jason Calacanis?

  Yeah. So at these high prices, because it's the entry price matters.

• 49:07Speaker 00

  These low-cost index funds that people now have access to are such an amazing vehicle for wealth appreciation. I don't think they get enough, enough love. But Jason, Brett got back to you. You asked him very specifically, what's going on in this video? And Brett responded, just a few minutes ago, actually. This is the Body Shop production line. Metal parts are picked up and loaded into a fixture that then gets welded together on the other side. So instead of having, you know, Eminem and Eight Mile standing there with the stamping machine, it's going to be our Figure robot. And, you know, in his original tweet, he said they're doing this in 10-hour shifts. Not bad.

• 49:43Jason Calacanis?

  Yeah, I mean, that 10-hour shift is probably predicated on a human monitoring it for now. And if they can do the simplest part of the task, which is aligning the pieces, that seems pretty reasonable. And then the other person has to do the difficult task, the welding of the pieces. That means they're only a couple of years from this robot doing the welding as well. And so...

• 50:05Speaker 00

  Can Figure afford to have that still be a couple of years out? Because I'm bullish, but also I'm long-term bullish, short-term uncertain about these companies.

• 50:14Jason Calacanis?

  I think if you raise a billion dollars and you're burning 100 million a year, you have 10 years of runway. So they can literally burn $10 million a month for 100 months.

• 50:27Speaker 00

  A billion dollars is a lot of money.

• 50:29Jason Calacanis?

  10 billion is a lot of money, folks.

• 50:31Speaker 00

  Wow.

• 50:32Jason Calacanis?

  Yes. I mean, it's almost, yeah. I mean, it's just, it's... Or if that money is just going to last them a year, let's say they were just going to, they were going to spend that money over a year. They could spend $3 million, $2.7, $3 million per day. That's a lot of money. So I think that they have plenty of runway. And so they're in no rush. Thanks for Brett for getting back to us. Appreciate that.

• 50:57Speaker 00

  Yeah.

• 50:58Jason Calacanis?

  Come on the show anytime.

• 50:59Speaker 00

  We would love, Brett, we'd love to have you on. We have so many questions about robots. Other companies in the space, of course, Tesla's Optimus, Agility Robotics, Boston Dynamics, Unitree, Apptronic, and the list. Jason goes on and on and on. Billions of dollars invested. Space to watch. All right.

• 51:13Jason Calacanis?

  Yeah, I think Figure will be one of the top three. I think Optimus will be number one. Figure will be in the top three, four, five. And then you've got a lot of people in China working on this stuff. So there'll be a lot of low-cost folks in China doing this.

• 51:29Speaker 00

  All right. Next up on the docket, Jason, the benefits of on-shoring. You flagged an article from our friends over at the Wall Street Journal talking about how Sharpies, the pen that everyone likes, found a way to make their actual items more cheaply in the US, which was a surprise to me. What here caught your attention?

• 51:46Jason Calacanis?

  Just the headline, I thought it was kind of funny that, you know, this is the least important product in the world to onshore. But the fact that it was able to be done cheaper in the US just led me to wonder why. Because the only cost difference I can think of is the shipping costs. And the shipping cost for pens doesn't, you know, it's not like a very heavy object, but it's a low margin, it's got to be a low margin business. And so I wondered if this was cap or not? And if this was being done as Trump bait?

• 52:28Jason Calacanis?

  Because Trump wants to on, President Trump wants to onboard reshore and build factories here. I could see people doing it to curry favor with the administration. But I would think that this had to happen before.

• 52:41Speaker 00

  Oh, yeah, this is a much longer project.

• 52:43Jason Calacanis?

  If they've actually completed it. But, you know, it's, also, the company seems to be a bit of a disaster. Their, their balance sheet, people were commenting on that. But what's the secret here? Why are they able to do this cheaper here?

• 53:00Speaker 00

  So, a lot of work. So they started this project back in 2018. This is a facility in Maryville, Tennessee, a town that I'm not going to lie. Until this article, I'd never heard of, Jason. But they've done a couple of things. One is they've invested in robotics and they've also invested in upskilling their staff. And the combination of the two has yielded a workforce that has lower turnover and higher efficiency. And so they're able to make products at a cost effective basis here in the United States.

• 53:26Jason Calacanis?

  So robots is the answer?

• 53:29Speaker 00

  Robots and more skilled humans. They did have a program to reduce turnover rate for manual jobs. And so I think they tried to reskill their staff so that they could support the factory versus just getting rid of the people. We've talked quite a lot about mentorship and upskilling people here on the show in the last 18 months as AIs come onto the scene. But I think that the thing that I want to show is just this picture from the journal.

• 53:54Jason Calacanis?

  And I love a good Sharpie. I'll be totally honest. I'm a Sharpie fan. I love the brand. I would never buy any other permanent marker because why would you? I trust a Sharpie. It's like a consistent brand promise. Sharpie. It's like Gorilla Glue. Like I was ordering some double sided tape from Gorilla Glue, you know, and like that really industrial stuff. And I'm like, why would I ever trust the Amazon choice when Gorilla Glue is available or Sharpie's available? I don't want to buy the Amazon basic. I want to buy the real deal.

• 54:25Speaker 00

  Yeah, because Sharpie is such a tremendous product. But this picture here, Jason, from the Royal Street Journal, I think, shows exactly what you're saying. This is a, this shows a woman working on a robotic, I'm going to guess, ink supply line of some sort here. And it's highly technical, but it does show that you can, with foresight, time, and investment, you can make stuff here at a cost effective basis. I think the difference is that it's hard. Like, I bet this was not easy. It's probably very easy to get manufacturing spun up in China, but there's a lower cost of labor, and they already have more industrial machines set up for this type of work. But you can do it. It's a will question, not a how question, I think.

• 55:06Jason Calacanis?

  Yeah. And if you think about people graduating from college or entrepreneurs, if I told you, you can design a product, have somebody else make it, and then you get to sell it and take 95% of the profits, and the person who made it is like marking it up 5% from their costs, which business would you want to be in? You obviously pick the former, not the latter. And Steve Jobs had this same realization. It used to be, his machines used to be made in Cupertino, then they were kind of assembled in Cupertino, and now they're designed in Cupertino. Foxconn, I think they're like a cost plus 5% manufacturer. What does Foxconn make on the average phone?

• 55:51Jason Calacanis?

  Like if the, versus what Apple makes. Apple, and I was, I literally was explaining this to my 15 year old about how even though the phones are made in China or India or wherever, all the profits reside here in America. And so, American workers, like, Turning tiny screws and, you know, doing six days a week, 10 hour shifts. It's just, it's not going to happen all that often.

• 56:17Speaker 00

  Oh, man. And Jason, this is brutal. So I'm on, um, so Foxconn, I'm on their latest monthly earnings report. Just going to quote here, gross profit margin, operating profit margin and net profit margin were 6.3%, 3.2% and 2.5% respectively.

• 56:36Jason Calacanis?

  Which is exactly what I said.

• 56:37Speaker 00

  I mean, that's.

• 56:38Jason Calacanis?

  They make 5%, something like that.

• 56:39Speaker 00

  That's almost groceries. That's almost groceries for some of the hardest work in the world.

• 56:44Jason Calacanis?

  Well, because if they don't make it, they know they can make it in India or they can make it in Vietnam. And if the factory in Shenzhen can't make it, they can go to the one in Guangzhou. You know, it's like, there's massive competition for this labor and you might be talking about making 10 million phones. In which case, if you're making 10 million phones and you're making $5 on each, uh, yeah, it's a lot of money. I mean, if you're making a hundred million, now you got a half billion dollars in revenue. It's good money.

• 57:11Speaker 00

  Yeah.

• 57:12Jason Calacanis?

  And if you've got more labor than you could ever use, it's great money.

• 57:17Speaker 00

  Ah, but that's changing. That's the interesting thing about the Chinese workforce is their, their, their past peak working age population, similar to things you see in Japan and so forth. So I think when we think about the, the great investment and acceleration of robotics in Chinese manufacturing, it's not only making things more efficient, it's also, I think, fending off just having fewer bodies to throw problems.

• 57:37Jason Calacanis?

  Um, absolutely. Let's do the Deloitte AI slop story because we're running out of time here. And this one, when I saw you guys talking about it, I was like, oh my Lord.

• 57:46Speaker 00

  All right. So Deloitte, of course, is a well-known global consulting group. If you know McKinsey, you know, Deloitte, they are a private company. So you can't go look up their stock price, but they did just get in trouble over in Australia because they got caught using generative AI, Jason, to put together a report that they charged, uh, in Australian dollars, 440K for classic generative AI mistakes, citing sources that weren't there, all sorts of things. But the real, the real killing blow, if you will, came from the, uh, Labor Senator, Deborah O'Neil. She says that, uh, Deloitte has a human intelligence problem. The situation would be, quote, laughable if it wasn't so lamentable. And then she said, perhaps instead of a big consulting firm, procurers would be better

• 58:30Speaker 00

  off signing up for a chat GPT subscription. I mean, that that's what consultants are afraid of being replaced by an AI chatbot.

• 58:39Jason Calacanis?

  Yeah, what you're gonna have to do, I don't think that these firms are going to go away. Like Deloitte, I think what they're gonna do is they will start and they will have these tools, you know, deep research tools at their fingertips. It'll present them a bunch of information, then their job is going to be doing first person interviews, acts of actual research, going to a factory, interviewing customers, all that stuff. Because if all the world's knowledge isn't just available online and your job as a consultant was to collate that information and make sense of it. Well, if the AI can collate, not not just collate it, but they can also make sense of it.

• 59:24Jason Calacanis?

  Great. If they do a reasonable enough job, it's your job to check it and then start your work from that point, not just hit publish or send and then go off and I'm sorry, but then go off and, you know, I don't know, do like these video, what we see in these day of the life of videos where people are like, then I got a matcha and then, of course, I went to yoga and then, of course, I went to the salad bar and then I met with my friends and we played foosball. You ever see these videos that they're on?

• 59:54Speaker 00

  I mean, I did it in 2021. I didn't know they were still making them.

• 59:57Jason Calacanis?

  They're back. And the second I see one of those, you post one of those working for me, it's instant firing, instant, like, somebody make a day in the life working for me and it's like, you see somebody's schedule, it's like, I met with four founders, then I ate lunch at my desk, then I did a meeting with seven of my teammates to introduce founders to VCs to see if they can help close their round, then I did four due diligence packages and then I collapsed at my desk.

• 1:00:24Speaker 00

  And then I died and I didn't even get my matcha.

• 1:00:27Jason Calacanis?

  Absolutely. Yeah. I mean, come on, like, the matcha bar is there for you to get to, you want to get a matcha because you got a customer, partner comes by the office and you want to hang out outside, that's totally fine. But get the matcha, like, let's get back to work, you know, take a little walk for 15 minutes, but like, it doesn't need to be like, you could do yoga after work. I'm not against yoga, but what is yoga at work?

• 1:00:47Speaker 00

  Yeah, what world do you think is Google in 2007? Like, calm down, everybody. Also, also, ProT, if you have a great life and you're getting paid a lot of money to not do a lot of work, shut up. Like, like, why, why would you tell on yourself? I've never had one of those jobs, but I would, and if I, if I ever get one.

• 1:01:05Jason Calacanis?

  Man, imagine we got that job, we do one podcast a week, but then we walk around and drink matcha lattes and get toasted bagels.

• 1:01:12Speaker 00

  Do you know what I would say? I would say in that situation, I would tell everybody, oh my gosh, I've never had more work to do. I am drowning.

• 1:01:17Jason Calacanis?

  Yes, yes. Anyway.

• 1:01:21Speaker 00

  Don't, don't cheat. Come on, guys.

• 1:01:23Jason Calacanis?

  It feels like the, the, this feels like cheating. That's the problem. And this is where I think you're going to have to show your work going forward. And it's going to have to happen when you're in high school and college, all the way to when you're, you know, if you, if you can get a job at like a place like McKinsey or Deloitte, you're going to have to show your work. And the way that's going to work is in a document, they now have a software in colleges where you write your paper and it doesn't let you cut and paste into the document. They've removed cutting and pasting. You have to type and you have to form your own sentences, which I taught journalists.

• 1:02:08Jason Calacanis?

  I had journalists who were cutting and pasting other people's work, pasting it into the document and then editing a bit and they would get caught. And they'd be like, are you guys dumb? Like literally just if you read in the Wall Street Journal that BMW had the figure robot and they were testing it, but they wasn't in production and then Brett said this on whatever, just say it in your own words. And if you don't know how to say it in your own words, you can just hit the tech, the speech to text button now, say it out loud, watch the text go by and then clean it up.

• 1:02:42Speaker 00

  Yeah.

• 1:02:42Jason Calacanis?

  I mean, it's so, I don't want to use the R word on air, but it is so R word. What's going on here with people? You've been given this gift of a tool. An LLM that can answer any question and then you decide, oh, that's how I'm going to do my job. I'm being paid money for it. No. If you can get that information in four minutes, the other 56 minutes of the hour is you improving it.

• 1:03:08Speaker 00

  Yes.

• 1:03:08Jason Calacanis?

  Find something to do, people.

• 1:03:10Speaker 00

  I now get to use chat GPT for a lot of small things and you know what that makes me, makes I'm able to do? More things. All right.

• 1:03:17Jason Calacanis?

  A better show, more facts, more answers.

• 1:03:19Speaker 00

  The dockets are longer.

• 1:03:21Jason Calacanis?

  Saying, oh, we'll, we'll get you that answer for the next show. It's like, no, we're going to get it this show. We're going to check the source.

• 1:03:25Speaker 00

  Yes. But Jason, speaking of founders, speaking of use of AI tools, why don't we hear from a founder that used Gamma to create an awesome pitch deck that they want to show to you?

• 1:03:34Jason Calacanis?

  Oh, I would love to do that. Is this our twist pitch deck competition brought to you by Gamma?

• 1:03:39Speaker 00

  It is.

• 1:03:40Jason Calacanis?

  I'm so excited.

• 1:03:41Speaker 00

  Pitch deck competition brought to you by Gamma.

• 1:03:43Jason Calacanis?

  Yes, we're going to, we're going to take pitches from 10 amazing startups and then I think we're going to invest in one of them. Yeah.

• 1:03:51Speaker 00

  I believe that's the plan. Today, we're going to have Ryan Yanelli from Next Visit AI. Ryan.

• 1:03:57Speaker 07

  Hi, Alex. Hi, Jason.

• 1:03:58Jason Calacanis?

  How are you? Oh, you're in the accelerator, I see.

• 1:04:01Speaker 07

  Yes, I am.

• 1:04:01Jason Calacanis?

  Beautiful. Oh, I can see by your background. Okay, so we'll get to hear your pitch. You ready to go? Share your screen.

• 1:04:08Speaker 07

  Absolutely.

• 1:04:09Jason Calacanis?

  And we'll start your pitch in.

• 1:04:16Jason Calacanis?

  Sure.

• 1:04:18Jason Calacanis?

  All righty, here we go in.

• 1:04:24Jason Calacanis?

  Sergio, tell me if it's okay.

• 1:04:28Jason Calacanis?

  Now, before we get started, Ryan, you went to Founder University, our 10th cohort, and then you're in Launch Accelerators, 35th cohort. Yeah?

• 1:04:36Speaker 07

  Absolutely. Yes.

• 1:04:38Jason Calacanis?

  Amazing. So when you came to Founder University, where were you at as an entrepreneur, as a company?

• 1:04:46Speaker 07

  I mean, after going through Founder's University, not being in the accelerator, looking back at it, it wasn't even a company before. It became a company once we actually followed everything that we were taught in Founder's University.

• 1:05:00Jason Calacanis?

  Yeah.

• 1:05:00Speaker 07

  So just invaluable for us.

• 1:05:04Jason Calacanis?

  Oh, great. So lots of blocking and tackling, incorporating, doing a cap table, accounting, all that important stuff.

• 1:05:10Speaker 07

  Yeah.

• 1:05:10Jason Calacanis?

  You learn some of those tactical things and then getting a product to market, obviously.

• 1:05:14Speaker 07

  Absolutely. Yeah. Hi, I'm Ryan Yannelli, CTO and co-founder of Next Visit AI. We solve burnout by doing the charting so doctors can do the healing. I spent years going to doctors, seeking answers, and ended up hours away from my death because my care was fragmented. My providers were overloaded with paperwork, my history was scattered, and it resulted in my care being neglected. I'm not alone. One in four patient charts contain errors. Clinicians spend over three hours a day on charting, and this leads to burnout. I want you to meet Dr. Rathor. Before Next Visit, he saw 16 patients a day, was burnt out, and had clinical errors. Now he sees 24 patients a day, saves time, and also saw 30% revenue increase.

• 1:06:00Speaker 07

  Here's how it works. Dr. Rathor selects a patient, starts a session, and Next Visit listens. Clinical data is built in real time with deep insights into the patient chart. When the patient leaves, the chart is finished, and the notes reviewed by Dr. Rathor, then it's ready for billing. It's fast, EHR-ready, and HIPAA compliant.

• 1:06:21Speaker 07

  Since launch, we've gained 311 users and have 68 paying customers, and our customers are addicted. We have 1.6% churn, 24% conversion, and a near-perfect MPS score. We've scaled to $9,000 MRR since launch. Our CAC is 189 with a $1,700 LTV, and our average revenue per user is $133 per month.

• 1:06:44Speaker 07

  We're starting with behavioral health in the US. A $2 billion TAM, capturing 5% or 60,000 customers, gets us to 100 million ARR. Most competitors are just scribes. We're a complete platform that providers trust. We provide real-time clinical decision support, build accurate data, and become irreplaceable. I'm a full-stack engineer with 15 years of experience in enterprise environments. My co-founder, Dr. Rafiq, is a psychiatrist with over 15 years of delivering patient care. We're Next Visit AI. We solve burnout by doing the charting so doctors can do the healing. Thank you.

• 1:07:19Jason Calacanis?

  Unbelievable, incredible. I'll give a little golf clap here, a little golf clap going. That was perfect, a perfect pitch. You explained exactly what the problem was. You explained what the solution is and the opportunity in terms of the total addressable market. And why you are uniquely and your partner, who's a psychiatrist, are uniquely qualified to do this. So this is as close to a perfect pitch as you can get. If I were to score it, maybe 8.5 out of 10. I don't give 10. So you know, 8.5, 9 and 9.5 would be the three choices. I think making sure people understand this is for psychiatrists and psychiatry and that you're very focused on that. Because, listen, it's only a two-minute pitch is what we gave you. So you can't get to everything in a longer pitch. Obviously, you would get into competition and the niche.

• 1:08:03Jason Calacanis?

  But as close as you can get to a perfect pitch. And I do wonder if you're charging too little, but at $133 a month is what you're averaging, Alex. That's, you know, what are we talking about here? We're talking about almost $1,500 per year per doctor. They use it for five years, $7,500. Those doctors make a half million dollars a year. So you're only charging, you're not even charging 1% of their total billable value. They charge, what do they, what do they bill out a year? A million dollars? Two million?

• 1:08:39Speaker 07

  I know from just our statistics that they can bill an extra probably $1,500 a day once they start using us, which is-

• 1:08:47Speaker 00

  You have to charge more. My wife is a practicing psychiatrist.

• 1:08:51Jason Calacanis?

  Oh.

• 1:08:52Speaker 00

  Bro, Brian, you could, like, I was on your site before, so I looked into this. This is what I was gonna say, Jason, is 199 a month for unlimited notes for your Provider Plus plan is just too small. Not only can psychiatrists afford it themselves if they're in private practice, but if you tell a hospital, they can get 30% more patients through one of their rare, hard-to-get providers, especially if they're a child psychiatrist. Man, that's worth two zeros more per month than your-

• 1:09:18Jason Calacanis?

  Yeah, and I think the way to frame it is, this is either another professional doing this. So this is your billing slash note taker. It's like a, it's a, it's a salaried person. So it's $20,000 a year equivalent or something, or to do it per record, or to do it per billing. And so there's consumption-based pricing, which you might want to experiment with at some time, which is, hey- Every time you do one of these, it's 10 bucks. And it's like, what is an average visit? $500? So that's not even, or $1,000? It's not even 1% of a $1,000 visit. So it might be that consumption-based pricing would be better here. Either way, if you're undercharging for it now, that means,

• 1:10:02Jason Calacanis?

  you know, that's why your conversion rate is so high. What are you converting right now, Ryan? In terms of, from a demo to a purchase?

• 1:10:12Speaker 07

  It's a very, you know, fluctuates a lot right now because last month, we had a huge uptick in users, probably 300 new users.

• 1:10:23Speaker 07

  And what we're seeing is like now, just this week, they're starting to actually start paying for it. So.

• 1:10:30Jason Calacanis?

  So it's hard. Yeah, it's hard to know early in a startup. So this is where you're, this is like a next card you have to turn over. It was a poker game. You know, you've seen the flop, but the turn is going to tell you like your conversion data. You get a lot more information on that turn card. Because 80% of the information is now on the board. There's only 20% left to come. That's going to be really important for you to understand is, you know, of this source, could be a conference, could be a referral, could be an insurance, an insurance partner asking people to use it, whatever it is. It could be from a paid ad. Of those, how many actually take a demo? Of people who completed demo, how many actually convert to paid? And then how do you convert them to paid?

• 1:11:14Jason Calacanis?

  So I would say you do the demo with them. And then at the end of it, say, can I have your credit card and sign you up right now? We'd love to sign you up right now. Can, can I get your credit card number? I'll put it in. It's only $150 a month. You can cancel at any time.

• 1:11:30Jason Calacanis?

  And that's the, then you might see your conversions. If you have the right people doing the onboarding. Like founder onboarding, this is what Raul did. Now, Raul is very successful executive at Superhuman. He did these himself. Just way as a founder, he got that knowledge. And when he on boarded me as one of the first users and the first investor, he said, okay, and now that you've seen it, I'll take you. Would you like me to sign you up? I said, yeah, of course, I may. He signs me up. He goes, and he gets to the screen. He goes, okay, now it's time for your credit card. Can I have a credit card? I'm at Cycles Coffee. I'm like, I just put $500,000 into this, and you're gonna make me pay 30 bucks a month? Absolutely. I gave him the card. I was like, absolutely, I want to pay for it. So I think they're gonna absolutely want to pay. Since this is so perfect, I don't have too much

• 1:12:13Jason Calacanis?

  feedback for you. You're also, for a CTO, you're a gifted natural presenter. Did you ever do a little summer stock or something? Were you in the poetry slam contest? What's the story, Ryan?

• 1:12:25Speaker 07

  No, I actually wasn't sure I was gonna do on this, because I just gave presentations in high school, and that was really it. But, no, I just really enjoy what we do. Like, you know, I'll get an idea at 3 a.m. I'll wake up, and I can't fall back asleep until I do it. So

• 1:12:42Jason Calacanis?

  Love it.

• 1:12:43Speaker 07

  I'm just very

• 1:12:44Jason Calacanis?

  You know, we call that, we call that founder product fit, or founder market fit. You really love the market, and you're engaged. And that comes through in a presentation. You can tell if somebody's faking it and going through the motions. It's obvious you're not. So even though you weren't trained to be onstage, man, your enthusiasm came through, your excitement, your passion for this product came through. You're gonna do fantastic with this business. I think this is gonna be a tremendous success, and I'm really excited that you allowed us to participate in it, Brian. Any questions for us? Any way we can be helpful, or any questions about how the business is going?

• 1:13:20Speaker 07

  I mean, I would just ask, if you were me, you know, what would you just obsessively focus on right now?

• 1:13:28Jason Calacanis?

  Okay, product and customer are probably the most important thing right now so that you have, you want to have very low churn because keeping a customer that you've already sold is a lot less work than finding another customer and onboarding them as you probably learned. So checking in with the people who aren't using it, figuring out why, figuring out, oh, do they need an onboarding in person? Or are they fine doing it over Zoom? You know, there could be all kinds of different factors, but really studying the churn data and the engagement data, you can't go wrong. So look at that engagement data. How are they using it? How often are they using it? Did they do 10 meetings today and not use it? What happened?

• 1:14:12Jason Calacanis?

  Was it they didn't like having their laptop out? Okay, maybe they need an iPad. Maybe they need an iPad mini is the best tool for this. Like, there could be all kinds of factors. Maybe like their desk, you know, like turning their monitor around on their desk is uncomfortable or whatever, and they don't like that vibe when they're meeting with the patient. So you get them a small computer with a small LCD portable monitor and a Mac mini underneath. Maybe that form factor works better. So there's going to be little nuances like that. You can never go wrong studying the engagement data and watching a customer use your product. So that's where I would spend your time. Alex, any thoughts there?

• 1:14:49Speaker 00

  I think that's dead on. I'm just really curious to see what they can do with AI on the, on the note-taking side because doctors spend too much time doing it and the resulting product is trash. So if they can make it not only faster and more efficient, but also better, that's going to make them, I think, an unstoppable market force because doctors hate notes famously. Just, they do them all the time and they hate them.

• 1:15:09Jason Calacanis?

  Absolutely. It is the bane of their existence. It's like for salespeople, like updating the CRM. They're like, ah, I'm a good salesperson. Why do I have to do this? Like, I'm a good psychiatrist. Why do I have to do this? You know, it's like, wow, because you want to get paid and...

• 1:15:21Speaker 00

  Yeah, because billing, that's what...

• 1:15:23Jason Calacanis?

  Billing is kind of important. All right, man. Great job, Brian. And you can find out more at nextvisit.ai.

• 1:15:32Jason Calacanis?

  So great when we have one of our founders come on because they've been in pitch training and you can learn more about Gamma. Where? How can they learn more about Gamma?

• 1:15:43Speaker 00

  If you're feeling inspired, my friends, head to gamma.app and start working on an idea of your own. And maybe we'll see you here on a future episode of This Week in Startups. We do it Mondays and Wednesdays and Fridays, Jason. There's always more twists on the way.

• 1:15:58Jason Calacanis?

  Awesome. All right, everybody. Speaking of that, we'll see you on... Is there a show tomorrow, Lon? Or is it Monday, Wednesday? Okay. Back on Wednesday. We'll see everybody on Wednesday, October 8th. Go to youtube.com, search for This Week in Startups and click Subscribe, hit the bell, get all the notifications so you can talk to us live. We'll see you next time. Thanks, Alex.

• 1:16:21Speaker 00

  Thanks, Jason. Bye, everybody.