The Grammarly–Superhuman Megadeal, plus TWiST 500 chats with LabelBox and Apptronik's founders | E2146

Today's show: Grammarly is acquiring the beloved email app Superhuman! In today's extremely timely episode, @alex sits down with Grammarly CEO Shishir Mehrotra and Superhuman founder Rahul Vohra to unpack why they're merging, how they plan to combine apps and AI agents, and what it means for the future of email and work. PLUS they reveal how Grammarly's 40M+ daily users already rely on email—and why this deal is the key to building the ultimate communication assistant. Don't miss this deep dive into one of the most exciting AI acquisitions yet! #AI #Startups #Productivity #Grammarly #Superhuman #VentureCapital #MergersAndAcquisitions Timestamps: (0:00) Introduction to the future of robotics and AI regulation(1:11) Introduction of hosts and overview of today's topics(4:19) Cloudflare's new pay per crawl product (09:37) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit northwestregisteredagent.com/twist today!(10:41) Polymarket segment on Apple's acquisition prospects(14:29) Grammarly and Superhuman CEOs interviews (19:42) Retool - Visit https://www.retool.com/twist and try it out today.(24:09) AI in productivity tools and email agents discussion(29:23) AWS Activate - AWS Activate helps startups bring their ideas to life. Apply to AWS Activate today to learn more. Visit aws.amazon.com/startups/credits(30:46) Grammarly's AI platform and the acquisition of Superhuman(41:16) Introduction of Manu Sharma from Labelbox(41:47) The role of data labeling in AI and Labelbox's data factory(53:44) Labelbox's market position and capital efficiency post-ChatGPT(1:03:00) Advances in humanoid robotics with Jeff Cardenas from Apptronik(1:07:09) Market readiness and capabilities of Apollo 2 robots(1:13:27) Humanoid robotics: Google DeepMind partnership and international competition(1:20:54) US federal support for R&D in robotics(1:22:10) The evolution of humanoid robotics and Apptronik's growth in Austin 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: (09:37) Northwest Registered Agent. Form your entire business identity in just 10 clicks and 10 minutes. Get more privacy, more options, and more done—visit northwestregisteredagent.com/twist today! (19:42) Retool - Visit https://www.retool.com/twist and try it out today. (29:23) AWS Activate - AWS Activate helps startups bring their ideas to life. Apply to AWS Activate today to learn more. Visit aws.amazon.com/startups/credits 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

  So I think the days of hard coding something to you pick up a box, those days are over, right? So we, we have reached this inflection point, not just in humanoid robotics, but in robotics as a whole, to where it's very clear that learning is going to be the future.

• 0:16Speaker 01

  This Week in Startups is brought to you by Northwest Registered Agent. Starting your business should be simple. With Northwest Registered Agent, you can form your entire business identity in just 10 clicks and 10 minutes. From LLCs to trademarks, domains to custom websites, they've got you covered. Get more privacy, more options, and more done. Visit northwestregisteredagent.com/twist today. Retool. Bridge the gap between AI demos and business impact with technology that's designed for developers and built for the enterprise. Visit retool.com/twist and try it out today.

• 0:55Speaker 01

  And AWS Activate. AWS Activate helps startups bring their ideas to life. Whether you're just launching or already funded, apply to AWS Activate today and receive up to $100,000 in credits. Visit aws.amazon.com/startups/credits. Hello and welcome back to This Week in Startups. My name is Alex. I'm joined today by my co-host, Lon Harris. Lon, how you doing?

• 1:24Speaker 02

  Great to be here. How exciting.

• 1:27Speaker 01

  I'm very excited. There is a lot of news today. We are going to have, in a little bit, the CEOs of both Grammarly and Superhuman to talk through their enormous deal, the implications of it, what they're working towards, why the deal came together, how it came together, so much to get through. But Lon, first, there's a couple of news items we absolutely have to touch on. The first thing that I want to double click on for folks is that we've talked about AI regulation here on the show quite a lot. There was a push in the House and Senate to perhaps limit state-level AI regulation. It appears that that is currently off the table. So if you were hoping for one national policy on AI regulation, not a great day for you. If you wanted states to have their own shot at it, well, good news. Lawn your take.

• 2:11Speaker 02

  They were sort of sneaking that into the big, beautiful bill was the story. They were like a little, a little hidden, tiny little text at the bottom of the page that said, uh, no, for the next 10 years, I think it was right. Like no states can pass any limiting AI regulation. I mean, I do understand, like far be it for me to agree with the large AI companies. Like I feel like usually I'm, I'm in opposition to them and their policies, but on this one, I get it. I do understand 50 different states making their own AI regulations is going to be beyond a headache for these companies, like basically impossible if all the states are going in their own little direction. So I do get why you would want to make a

• 2:55Speaker 02

  federal level rule. I just think this one was a little aggressive. Like you don't want to maybe make it so that states have zero power. I think you just want common sense limits on what they can do that would massively impact development of the entire American AI industry. So I think to me, this feels like I, I understand the motivation, but it feels like a, a hammer when what you need is probably more like a scalpel.

• 3:22Speaker 01

  I think that's pretty fair. And there was movement on 10 years, five years, sticks and carrots, but does pretty be off the table for now. We'll see what the house does.

• 3:30Speaker 02

  Also 10 years, when you're talking about any kind of rule about AI is like, well, who even the, the AI will be making rules about itself by then, like we don't, that's so far out in terms of this stuff. I feel like it's almost useless. Like they're going to be laughing at whatever we thought about AI today in 10 years. Can you imagine?

• 3:49Speaker 01

  Maybe 10 years is just the time it takes to reach AGI. All right.

• 3:53Speaker 02

  The Westworld hosts are going to be like, ha, ha, ha, ha. They were so stupid.

• 3:58Speaker 01

  I only watched the first season of that. Is the second one worth watching?

• 4:01Speaker 02

  Um, I, if we're going to go deep on Westworld, first season easily by far the best. Season two gets real heady and philosophical and weird, which I like, but turned off a lot of people. I still thought it was good. Three and four then kind of completely skipped the rails. You don't need to keep going that far, but I do like two.

• 4:19Speaker 01

  All right, fair enough. Now, Lon, the other major story before we jump into our interviews today is that CloudFlare has essentially flipped the internet economics that we know and love on its head. The news here is that they have debuted a new product called Pay Per Crawl. Essentially, it's a way for websites to not only block AI scraping and AI pings, but also to set a price for scraping their content. This matters quite a lot in two contexts. The first one is training. We all know that AI models love to go out into the internet, collect a lot of information that they then use to train their systems to become, in theory, smarter over time. But I think the other context that's even more important is RAG, which is Retrieval Augmented Generation. Essentially, AI models going out to the internet, collecting information,

• 5:02Speaker 01

  and using that as they generate a response for users. This has become a more and more, I would say, frequent use of AI scrapers out there. The problem is, as we've learned from Tulbit, as we've learned from CloudFlare's data itself, those RAG queries don't really send people back. So the economics of value transfer, if you will, have become incredibly one-sided in favor of the AI companies. So Pay Per Crawl allows companies, allows websites to say, "If you want to crawl us, here's the price." And it allows for a kind of middle exchange with CloudFlare mediating the transactions. If this takes off, if this becomes the new standard, it would revolutionize the economics of online content. The question, though, Lon, is how many websites will take it up?

• 5:46Speaker 01

  And will the AI companies play ball?

• 5:49Speaker 02

  Yeah. I'm, it's interesting. The way AI outputs are structured, they purposefully don't send you to the third party. Like even in Claude, which we use all the time, shout out Producer Claude. They, they sort of, it like, they're making a big show of we are citing sources. Like, they don't want you to think this is hallucinated. So they're putting those footnotes, but they're so small and they don't even seem clickable. You have to really like take the onus on yourself to click through and see what websites Claude is referencing. They could make those pages look more like a Google result. You're getting a block of text explaining. Meaning what you asked Claude and then here are two or three

• 6:33Speaker 02

  well chosen curated links that would send you to the sources for those information. So I do feel like there, there are other ways around this, but sure, if paper crawl is the strategy that gets publishers and websites paid. Like I'm, I'm obviously all for it. I, I feel like the big concern these days is we're doing so much with AI, we're auto generating so many outputs where we're condensing the web down to these you know, little, little AI results. Eventually we need people to be actually doing the journalism, writing the original websites, creating the sources that Claude is then scraping.

• 7:13Speaker 02

  And like, we do need to foster those kinds of businesses or they disappear and there's nothing left for AI to reference.

• 7:21Speaker 01

  So the way that I think about this, just to kind of build on what you're saying, Lon, is the first order impacts of paper crawl from Cloudflare. If it becomes the norm is that there will be better online media economics.

• 7:32Speaker 02

  Yeah.

• 7:33Speaker 01

  From day one, the second order effect is that that could lead to more expensive AI subscriptions. If Claude and you know, OpenAI and other companies are forced to pay for content and data. It might mean that they have to raise their prices. Fair enough. Third order effects, there'll be a stronger online content ecosystem, better content will be rewarded. So there'll be more of it. And then finally, I think that will yield long-term better and stronger AI systems because there'll be more real data to pull from. But it's going to be expensive to get there. The question is, what's the uptake? How many websites want this? I founded a company to do this back in 2009 and we failed.

• 8:09Speaker 02

  You were just ahead of the curve, man.

• 8:10Speaker 01

  Yeah, but this is always going to choose to pull up the old TechCrunch articles of my companies like birth and death. But I'm just saying, people have been trying to solve this for so long. Micro payments for individual human visits haven't worked, but perhaps micro payments for agents are the way forward. All I know is I write on the internet for money, so I hope this works.

• 8:30Speaker 02

  Yeah. I mean, it does make sense to me, and I know we got, we got a million things to get to today. We've got to move on, but it does make sense to me to make the AI subscriptions more expensive. If that is then going to be your window into the world of content, for lack of a better term, like, we understand that, you know, your Netflix subscription is expensive, but then it's funding all of these international productions, like Squid Game and all the movies and whatever, like, all of that content gets created because of you're paying the Netflix subscription upfront. It could be the same way you're paying Anthropic upfront for your Claude subscription, but then that is in part seeding all of this great media

• 9:12Speaker 02

  and content from around the web that we still want to see. We just want to access it via Claude. It's like Jason says on the show all the time. It's not that he doesn't want to hear the New York Times Wirecutter tech reviews anymore. He just wants to get them through ChatGPT.

• 9:28Speaker 01

  Yeah, I think it's really cool that this could convert a portion of consumer and enterprise AI subscriptions into effective media subscriptions. It's a pretty interesting model.

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• 10:23Jason Calacanis?

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• 10:41Speaker 01

  But you're right, we have to move on. All right.

• 10:43Speaker 02

  Yes, we gotta do a poly market.

• 10:45Speaker 01

  Yes, we do. And I picked one that is very, very apropos to the current moment, because why not keep talking about what you and I love the most, which is, of course, mergers and acquisitions in the AI space.

• 10:56Speaker 02

  Of course.

• 10:57Speaker 01

  Mergers and acquisitions in the AI space because I speak English. All right, so this is a polymarket market that asks, will Apple acquire perplexity before September? Now, I had picked this before the Grammarly Superhuman news dropped. We knew long going into this that Apple has sniffed around perplexity. We've heard that Meta has sniffed around perplexity. And so I think this is a perfectly fine thing to bet on. I'm just surprised that it hasn't moved more in the wake of the Grammarly Superhuman deal, because I think we're seeing more AI-first products buy one another. And I think that that same pressure probably implies that Apple really does need to buy an AI champion. So I almost want to say this looks a little bit undervoted, if that makes sense.

• 11:43Speaker 02

  Yeah, I mean, I think perplexity of all of the major AI companies, it feels like it makes the most sense. We know Apple's looking around and senses that Apple Intelligence may not be ready for primetime and they may want Siri to be powered by a more established, you know, better sort of regarded model. And perplexity, we keep talking about, I think we keep coming back to this idea that the way we're gauging the best models and the most used models and the most entrenched, it's not by necessarily these benchmarks of like, can it take the, you know, the LSAT and get a perfect score? I don't even know what the benchmarks are, to be perfectly honest.

• 12:23Speaker 02

  But the way that people use them is, are they tied into something else that I'm already using? Like, the ChatGPT interface obviously gets the most use. And like Meta's AI gets a ton of use because it's baked into Instagram and Facebook. And Grok gets a ton of use because it's baked into X, comma, the everything app. And so perplexity doesn't have that. If you want to check out perplexity's models, you gotta just go, I think it's perplexity.ai. You gotta like, go there and purposefully look something up using perplexity's model. And so it makes perfect sense to me, like, this feels like an obvious collaboration.

• 13:05Speaker 02

  Like, Apple needs a model to power their consumer-facing apps that are already being used. And perplexity has this great model, but nothing to do with it. So like, bring those two things together and you have this seamless opportunity.

• 13:23Speaker 01

  Well, I think that people are my, I think people are not giving this as much credence because we have also seen news that Apple might work with either Anthropic or OpenAI to source their models as opposed to what's built in-house. And if they do that, the need for perplexity goes down a little bit, Lon. But I'll also just say, Apple has a history of small acquisitions, not big ones. And that's also leading against this being a possibility. But at the same time, if I'm Apple and I'm this far behind on AI, I'm probably looking for some help. So anyways, lots going on over on Polly Market, but Lon, we gotta get some interviews because there's a lot of news bubbling. As we said, we have the CEOs of both Grammarly and Superhuman here to answer all of our questions about their enormous deal that shook technology markets this morning. And then after that,

• 14:04Speaker 01

  we're going to hear from the CEO of Labelbox, all about AI data labeling, and how startups are working to fill the gap that Scale AI's exit to Meta may have formed. And in the background of that, you will see the glorious Stanford campus. So please enjoy the California sunshine. And then to close off, Apptronik, all about humanoid robots. How much progress have we actually made today? How quickly will we see these in market? It is a Twist 500 extravaganza. I hope everyone enjoys it. We've been working very hard to get a lot of these interviews done to bring you what you can't find over there on Twitter. All right, Lon, let's hear from the CEOs of Grammarly and Superhuman. This morning, Grammarly, an AI-powered writing tool, announced that it will acquire Superhuman,

• 14:46Speaker 01

  a well-known email service popular and beloved by power users around the world. Recall that Grammarly was in the news as 2024 came to a close for buying Coda, a startup that built AI-infused enterprise collaboration tools. The company also sports 40 million daily active users and more than $700 million worth of annual recurring revenue. To dig into the deal, to figure out why these companies are coming together, please welcome to the show, it's Shashir Merutra, CEO of Grammarly, previously co-founder and CEO of Coda, and Rahul Vohra, founder and CEO of Superhuman. Gentlemen, welcome, I guess, back to the show. I think of all of our guests, you two have to be among the absolute most frequent. So thanks for making the time.

• 15:24Speaker 04

  Back Alex.

• 15:25Jason Calacanis?

  Hello, hello.

• 15:26Speaker 01

  All right. So Shashir, earlier this month, you said that Grammarly is quote, "building a platform of AI agents that work seamlessly within your existing tools," a big vision. How does Superhuman fit into it?

• 15:37Speaker 04

  Yeah, sure. Really excited about this acquisition, this step today. As you mentioned, our goal is to build the AI native productivity suite with the apps and agents that drive productivity for every individual and every team in the world. We spent last time talking mostly about agents and how Grammarly is the OG agent. It serves as its communication assistant for over 40 million daily active users. And we're basically transforming that platform into a platform of agents that work with you beyond just your grammar agent. But simultaneously, we're also building a suite of application for where those agents work. And the Coda acquisition was actually the start of that. It gives Grammarly a natural home for one of the most common tasks that grammarly users do, writing.

• 16:21Speaker 04

  But as we work to fill out the suite, we naturally turn to the next most commonly used surfaces, which turns to email. Emails, for most people, the dominant communication tool people use, billions of different users, often the most used work app. It turns out that for Grammarly, it is actually our number one use case. So Grammarly is used more frequently in email applications than any other service. We help people revise something like 50 million emails per week and work across, you know, 20 different email providers, Gmail, Outlook, Apple Mail, so on, including Superhuman. So my view of this was, I actually looked at that category as the next obvious one for Grammarly to play in.

• 17:05Speaker 04

  Emails are a category I've been thinking about for a long time. As you were talking about right before the show started, I actually started my career in email. I was a developer on Microsoft Outlook in the 1990s, seems like a long time ago. And at the time, Outlook was the most innovative email tool in the world. And I got to Google right as the next one came. Gmail came in the mid 2000s. And then after that, basically, nothing happened. And until Rahul came along. And Rahul and I were starting. Superhuman Coda, similar times. Yeah. And I saw in him the same spark of I bet we can reinvent this very unappreciated old surface in a similar way that we were doing with documents.

• 17:49Speaker 04

  And Rahul had a really extremely clear view of how to do it and has done a really amazing job of it. So Superhuman was a very natural next step for us there. I think it's a complete mind shift in how people think about email. We'll talk more about that as well. But for us, it helps us bridge out from agents to building out the application services for the prominent places where people work.

• 18:15Speaker 01

  All right, so Rahul, Trisher just said that you had a pretty clear vision for the future. Talk us through from your end why this deal made sense and what you hope bringing Superhuman into Grammarly will unlock that you couldn't have before with just people using Grammarly as also being Superhuman users.

• 18:30Speaker 05

  Well, I think this deal, like so many, had its roots in a relationship that started a long time ago. We actually met Trisher and I back in 2017. We were at a conference and it was one of those special moments. This is why people go to conferences or why you should go when no one else was around. So we could get into some really deep conversation. This was the lobby conference, so shout out David Horne and team. They do an amazing job. And as I think you know, back then, we only did one-on-one VIP concierge onboarding. So I onboarded him right there and then, right by the pool. And as those who've been through one of these onboarding, so the very last step is I would ask people to close Gmail. And he's, you know, moving his hand around.

• 19:10Speaker 05

  He finally clicks the close Gmail tab and another tab catches my eye, which is an app called Krypton. And I asked what it was and Trisher then proceeded to give me the best product demo I'd seen in years. Like it was this document, but it was also a spreadsheet and a database. It was a collaboration tool. It was an app builder. And Krypton kind of stuck at the back of my mind because that's the home planet of Superman, which is adjacent to Superhuman. Obviously, they eventually renamed Coda and then Trisher was brought in as well as the whole Coda team and product into Grammarly.

• 19:43Jason Calacanis?

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• 20:26Jason Calacanis?

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• 20:56Speaker 05

  Now, last year, in his acquisition announcement, he wrote, and I have the quote here, "As I watched the foundational capabilities of AI change just about how every tool and service operates, I started drafting my 2025 planning memo for the team. I titled it 'The AI-Native Productivity Suite.' And that was a moment where my jaw kind of hit the floor, because I think, as you know, our vision at Superhuman has always been to build the AI-native productivity suite of choice. And email is a critical part of that suite. Shashir touched on it, but it is such a big problem. There's roughly a billion professionals in the world, and on average, this is the average number, we spend three hours a day on email. So that's 3 billion hours every single

• 21:37Speaker 05

  day, or more than a trillion hours every single year. It's sometimes easy to forget this in Silicon Valley, but in general, as professionals, we spend more time on email than we do any other work app. So we caught up, we had several conversations. It was clear that we share the same vision, which is to build the AI native productivity suite of choice. I think this is going to look a little bit different, maybe to what people imagine when they hear that it is not just apps, it's apps and agents. And that's what we're building.

• 22:06Speaker 01

  So I want to get into that because when Grammarly bought Coda, my, my thought was, okay, so Grammarly is a great tool. I use it around the web. Coda is a great tool. We use it for the twist500.com website, for example. Okay, that's the new pane of glass. That's the central interface for all things Grammarly, agents and Coda. Now with Superhuman inside the fold, I'm not sure exactly where the center of gravity rests, or alternatively, if agents are going to follow me around the web and I'm clinging to a dated understanding of what software should be. So which direction are we going?

• 22:38Speaker 04

  Yeah, I mean, I think our view is we'll do a little of both. I mean, I think the way we think about is agents should be with you everywhere you are. And it's very important that like Grammarly does, follows you into hundreds of thousands of different applications, but they also need a home. And I think the way we think about Coda is we think about it as the first party home for interacting with those agents. An analogy I use a lot with the team, the product I used to work on before Coda was YouTube. And for YouTube, imagine if YouTube only had embeds all around the internet, but there was no youtube.com. And so we kind of view that together. And that's how I view both Coda and Superhuman in this, in this world. So just to give you an example, imagine you're writing an email to a customer and not only

• 23:23Speaker 04

  do you want to have your Grammarly trusted communication agent that's making sure that you get your spelling and grammar correct, you get your tone correct, that you're accurate, but you also have a sales agent that ensures accuracy of all your sales facts. And maybe you have a support agent that knows everything about that customer's recent support issues. Or maybe you have a marketing agent that knows exactly which feature to suggest to that customer. And all of those should happen in that, in that same surface where you want to spend your most productive hours of the day. And so that's how we view them coming together.

• 23:57Speaker 01

  That's a pretty broad, multi-agent framework and one that seems to spread quite far beyond the companies you purchased today, Shishir. So being a little bit of a brat, but how many more companies are you planning on buying?

• 24:09Speaker 04

  I don't think I have a limit.

• 24:14Speaker 04

  I mean, I do think as you build a suite of the future, I think there's a lot of things that will build, will buy, will partner. I don't think everything has to be done in that way. It was very important to me to take ownership of the most important surfaces that people work in. If you were sort of divide people's work life into what do you do all day? You produce work artifacts, documents, spreadsheets, presentations, so on, and you communicate. And so that's things like email, chat, and so on. And so these were certainly the two most important. But we're ready to pull in whatever parts of the suite we need to complete that experience.

• 24:51Speaker 01

  All right. So Rahul, you wrote in a post over on the Superhuman website that email, quote, "turns out to be the perfect place to work with agents." We were joking before the show that I've almost on-boarded a Superhuman like four or five times. Sorry. But I'm very curious what that might look like in practice for folks out there who either aren't current Superhuman users, or are just not sure what an agentic email experience might look like in Shashir's broader vision of productivity.

• 25:15Speaker 05

  Absolutely. And I think the, you know, as an industry, we're still figuring out defining exactly what an agent is, which by the way, I think is fine. At Grammarly, we have a particular point of view. I think one of the things we believe, and this is a little bit unique about our position, and I love that Shashir has this position and the wider company as well, is that it should follow you around. It should be available, working wherever you do. You may remember, I have a very deep history in that idea. My last company, Reportive, I think was a proto-agent. Like, you didn't have to do anything. It was just always there, working on your behalf, researching people, putting it on the right-hand side of Gmail. Grammarly, the product is a proto-agent. Whatever writing service you're in, it's there, helping you write, helping you communicate, helping you be understood.

• 26:00Speaker 05

  And obviously, the capabilities of those things now are so much more advanced than what we could do back then. But that idea of someone sitting right beside you, or like this little thing on your shoulder that's just helping you be brilliant at what you do, very near and dear to my heart. So, zooming out a bit, we think that these AI agents, they're gonna work on your behalf, they're going to reason, they're going to problem solve, they're going to incorporate detailed context about your work, they're obviously going to interact with other systems, and as we've started to see over the last few months, other agents. And for so many people, email is the center of where they work. It's got things like project statuses, customer communication, meeting updates, deal execution, so much more. So you can imagine an agent triaging your inbox before you wake up. You

• 26:42Speaker 05

  can imagine another agent drafting, I know, right, responses in your own voice and tone. It's all gonna happen. We'll get you on the fifth time. An agent incorporating detailed context about your work, another agent servicing insights, scheduling meetings, and then syncing with your other systems of record, whether that's an ATS, a CRM, could be custom system, a custom integration. One of the cool things about agents is the API can literally be natural language. And so the glue is easier to build than it ever has been. And then one of the most far outside ideas, and we were talking about this just before the show, and you were asking, like, does email become the workbench to manage your agents? Well, I think the answer is we'll have multiple places to manage our agents. Sometimes it's

• 27:25Speaker 05

  gonna be in the flow of our work. That's the idea of the agent following you around. But sometimes, you're just going to want to go through a list of things, and mark those things as done, and snooze those things, and assign those things to other people, and have blazingly fast full-text search over those things, and have this app, whatever it is, work offline. And you know, it starts to look awfully like an email client at the end of the day. Email actually is nothing more than a list of things to do. And that will, that is what we're building. It's what we've always been building.

• 27:55Speaker 04

  I'll add two quick things, and Alex, I know you'll get you onboarded to the product again soon. I think just first off, the task of dealing with email is its own interesting task. This seems like an odd thing to brag about, but I've been a superhuman user for years, and I had Rahul pull the stat for me. So I have currently 144-week Inbox Zero streak, hitting Inbox Zero every week for two and a half years. And that is largely credit to superhuman. So if you view this as a chore, we can do much better than that. I think there's a next level, which is now, do you communicate better? Do you communicate more effectively? How much faster do you respond to emails? What's the quality of responses?

• 28:39Speaker 04

  And then you start to think about it the way Rahul was just describing, that it's your workbench for working with your agents. And part of our view of it was, why do we care so much about documents and email as being two surfaces we really wanted to have the best first-party experience in? Is the places you work with humans are the natural places to work with agents as well. That's how we think our teams are about to expand. It's a very natural surface for us.

• 29:03Speaker 01

  On the agent that follows you around, I love that idea. I love the idea of having an assistant that knows my context and can help you wherever I am. Is that something that you can build with technologies as kind of basic as a browser extension? Or do you need a different vehicle to bring that to market so that way it can interact with me across my workflow? Because not everything I do is inside of a browser.

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• 30:46Speaker 04

  Yeah, that's right. I mean, I think the, first off, the way Grammarly works, and if we think about Grammarly as really, I think it's a very misunderstood product because I think people understand it as a proto-agent, as that OG agent. But actually, it's two separate products. You know, there's one, we think of as the agent platform that brings AI to you everywhere. And the other, we think of as your agent. That's your high school grammar teacher in your pocket. And the platform is actually where most of the technology has gone. So Grammarly currently works in your browser. It works on your desktop. There's a desktop application that works on it and on your phone. So there's a, both on iOS and Android, a version of Grammarly that can work across all your applications. So across that, we work across 500,000 different applications.

• 31:30Speaker 04

  And yes, that's everything from your browser apps, Superhuman, Gmail, so on. But also your desktop apps. Slack is a great example. But people use Apple Notes. People use all sorts of things that are desktop applications as well. And we've done the hard work to be able to read what's on your screen, be able to annotate it in a way that is unobtrusive to you, and then be able to take action on your behalf. We call that the AI superhighway. That's the term we use for it, bringing AI right to the end user. And our view of it is that right now, we're only running one car on that highway. We're running your high school grammar teacher. That's the one car. And we're expanding that so that anybody can build an agent that works across all those different surfaces. So it is a key part of what we're doing.

• 32:14Speaker 01

  So then Grammarly is Kind of back in today is the platform on which many other agents can be built, filling out this AI highway with other cars to your analogy.

• 32:23Speaker 04

  That's right. And you're going to see a big shift in, in the product in the next couple of months, and that'll become much, much more obvious. We've been working really hard on it. And then we'll start opening up the platform. So anybody can do it. I mean, that could be, like we described a couple of examples earlier, it could be things that connect to a system, like your, imagine your Salesforce agent wasn't like a Salesforce app that you had to go to, but rather an agent that was with you everywhere and had all your sales data at your fingertips and was just going through and marking up your, whether you're writing an email or a document or so, and marking it up as you go. You could imagine agents that represent people. So I want an agent for, I'm a big fan of Kim Scott's Radical Candor, and Kim's building an agent that is, hey, you really want to follow this? Don't read the book and stick it on your shelf, but really have this person that's sitting next to you saying, hey, you're kind of not following the principles of the book right

• 33:08Speaker 04

  now. Here's what, here's what you should be doing. So I think that market of, you know, the set of people I want next to me as I'm working is, is sort of limitless. And we want to be the platform for doing that.

• 33:19Speaker 01

  So just to be clear, you're saying that Grammarly is eventually going to have a app, sorry, an agent marketplace where other people can build things and deploy them onto the foundation that we discussed that Grammarly's already built that interacts across a user's computing environment?

• 33:32Speaker 04

  Yeah, that's right. And it's, it's being built on top of a marketplace we built at Coda called the PAX Marketplace, which is already one of the most thriving marketplace in the world. There's about eight or 9,000 of those PAX that have been built, there's 800 or so in the gallery. And so there's already many of those agents already exist, and we're taking those and bringing them over to the Grammarly platform.

• 33:50Speaker 01

  All right, Raul, I want to get back to you because when this news dropped, first of all, I was a little bit shocked. I've since kind of figured out what you guys are doing. Frankly, I quite like it. Over on social media, some people were a little bit confused, expressed concern that their favorite product is going to be taken into a larger company. So for folks out there who are current Superhuman users who may not be Grammarly customers, what assurances can you give them, if any, that their experience is not going to become, to use a common phrase, Salesforce?

• 34:19Speaker 05

  Well, without commenting on Salesforce, you know, anyone who's watching this has mine and Shishir's absolute assurance that whatever that is, it's not going to happen. Shishir, as he mentioned, has been using the product since 2017. Credits his success in his email to the product and the entire team is moving over. This is an acquisition, not just of a product, not just of a team, but of a business, an ecosystem, a brand. It's something really, truly very special and we have every intention of fully accelerating what it is that we're building and what we're doing here. As a founder, one of the most exciting things about a deal like this is that you have access to significantly greater resources. So we're going to invest more than ever in AI, as we've talked about.

• 35:04Speaker 05

  We're going to invest more than ever in our core email experience. Even after building it for 10 or 11 years, we still have a laundry list of things that we want to make better. We're going to build out calendar and we're actually very close to that. Anyone who's in Superhuman today will see that. Tasks, we're going to connect calendar and tasks and email beautifully together. We're going to reimagine chat, redefine collaboration, pulling on everything that we've learned about work communication for the last 10 years. And then, of course, as Shishir said, we're going to connect all of this up with a new way of working with agents, which we think is going to free all of us up to be more creative, more strategic and more impactful. So I get it, it's reasonable to be concerned in a time of massive change. But one of the things that really appealed to me about this particular parapent and

• 35:49Speaker 05

  Shishir as well, being a genuine user of the product for so many years now, is this goal to build, that he mentioned to me in the past, to build a stable of some of the best AI brands in the world. And that's very different. He gave me some examples, for example, of when Facebook acquired Instagram, or when Facebook acquired WhatsApp, or how Google has treated YouTube. That is how we want to think about Superhuman at Grammarly.

• 36:20Speaker 01

  So a crown jewel, the one that retains its own identity and will be a piece of our larger puzzle. I like that a lot and I'm sure that a lot of folks are going to be very glad to hear that their Superhuman experience is not going to change. Now, Rahul, you sold Reportive after just a couple of years of building it. Now you've been working on Superhuman for a very long time. You had a pretty big round back in 2021. I'm curious, just from the founder's chair, why was this the right time to sell?

• 36:46Speaker 05

  That's a great question. I think there's a few things that people often say, oh, like, was it a growth thing? Or like, is it a runway thing? And, you know, mostly for the insider baseball and for the other founders, I'll share the following. We were actually growing faster than ever. We grew twice as fast in 2024 compared to 2023. We had runway for four plus years. We would have been break even probably early next year by this point. So it truly is none of those things. It really is that technology is changing faster than I've ever seen in my whole career. And towards the end of 2024, I think a number of companies realized the magnitude of the apps

• 37:28Speaker 05

  and agent opportunity that we just talked through. And also, they're looking at their own products portfolio. They're realizing they have an email size hole. And I think one of the, one of the skills every founder needs is to spot the zeitgeist, to realize when that kind of thing is happening, and then to be able to go and prosecute that opportunity. And so it was obvious to me at the end of last year that there were a number of companies that had that thought. And it makes sense, you know, there's, as I said, north of a trillion hours of time going to email every single year. There's no other work cap that we spend more time in. Superhuman is almost, oh, actually, definitely a one of one asset. Like, we spent 11 years grinding to get to this specific point. And so that was why I knew it was the right time.

• 38:12Speaker 04

  Yeah, just from the buyer's perspective, this idea of an email-shaped hole in everybody's productivity suite, I think is absolutely correct. I think there's going to be a race to build that new AI-needed productivity suite. And I felt very lucky to be able to work with Rahul and, you know, come up with a deal that I think will produce great impact for our overall company, for the current superhuman users, but is really a one-of-one product. I mean, there really is, the next best new email products on the market are, you know, almost unheard of. And so I think it's a, I think it's a great partnership to be able to bring that to a much broader group of people.

• 38:49Speaker 01

  Yeah, and it's not like Gmail's gotten a lot better in the last 10 years. Let's be honest. Now, Shishir, you recently secured $1 billion worth of growth capital with General Catalyst, pretty interesting way to fund growth at the business. I really liked it. You did note that some of that was earmarked for strategic acquisitions. I'm curious, did you use that capital for this deal? And did you have Superhuman already in mind when you secured that capital? Or did this come afterwards?

• 39:12Speaker 04

  Rahul and I have been talking for a bit. So it was, yes, it was in mind as we, as we went through it. The, the specifics of the deal aren't being shared, but it was an all stock deal. So the, the, the capital is being, allows us to take bigger bets here. But in general, we're working through how to expand our offering as fast as we can. And having access to an extra billion dollars is a, is a pretty good way to do it.

• 39:38Speaker 01

  Rahul, was that large pool of capital that you'll have access to now to probably use to grow superhuman an incentive? Or are you more interested in the engineering resources that Graham really can bring to bear on your quote laundry list of, of to do's?

• 39:52Speaker 05

  Well, definitely those two, distribution, greater resources. I mean, there were so many reasons to, to join forces here. It was almost a no brainer. Pretty clear actually in our first conversation that Shashir and I had.

• 40:04Speaker 01

  Wow. Okay. So Shashir, then just to wrap us up here, because I think everyone wants to know how this is going to play out in the real world, but your company is enormous. 700 million ARR, making a lot of big deals, IPO plans this year, next year. People are talking about everyone getting finally out. Are you one of those companies?

• 40:22Speaker 04

  Nothing to announce now. I think we're, we're pretty busy building. I think it is quite the gold rush right now as the, the world adjusts to AI changing many things that we just didn't think were possible. I mean, the idea that we're going to have agents rewriting and rewriting all our emails for us just seemed kind of crazy. And now it's completely possible. And, uh, you know, we're very focused on, on growing that. Um, and you know, when, when we're ready, we'll, we'll take it out to the public markets.

• 40:49Speaker 01

  All right. Well, here's hoping that you guys can eventually take these agents to become so smart that they can, instead of writing the email for me, simply contact someone else's agent, handle the communications and bring back the context I need, because then we can just cut out the whole middleman and short circuit email for the future. But in the meantime, Rahul, Shashir, thank you both so much for coming back on the show. Congrats on the deal and I guess go build.

• 41:09Speaker 04

  Thanks, Alex.

• 41:11Speaker 01

  Bye.

• 41:16Speaker 01

  Now, you may have seen a major news item in the last couple of days. Meta and Scale AI have come to a $14, $15 billion deal. That investment threw an enormous amount of light onto the realm of data labeling. And in the coverage of that enormous news event, a company called Labelbox said that they might generate hundreds of millions of dollars in new revenue this year. And actually, that got us thinking. We looked into the company. We absolutely had to learn more. So please join me in welcoming CEO and co-founder of Labelbox. It's Manu Sharma. Manu, welcome to the show.

• 41:45Speaker 04

  Thank you for having me, Alex. Really excited to be here.

• 41:47Speaker 01

  And if you're watching the video version of this, I will note that Manu is not using a virtual background. He is on the Stanford campus, which just goes to show, I think, the connection between AI work and academia is holding strong. But Manu, just to start, what is data labeling? And can you tell me a little bit about the difference between human-led data labeling and machine-led data labeling?

• 42:07Speaker 04

  Yeah, Alex. So nearly every AI breakthrough that we have experienced since AlexNet, all of these models have actually been trained on human-generated data. Back in the days, you know, when around, maybe let's say 2017 to 2020, supervised learning, which is a technique to build computer vision models, you may have seen like lots of self-driving cars work, starting popping up at that time. They were all trained with human labeled data and kind of labeling at that time used to be fairly trivial. You know, you're kind of looking at an image and saying like, hey, that's a car, that's a pedestrian and things like that. And that fundamental technology or technique was widespread for all kinds of computer

• 42:52Speaker 04

  vision applications. And after kind of the transformer kind of innovation or breakthrough appeared, a lot of the focus went into kind of making that unsupervised learning stack work. And turns out, even in that paradigm, you know, these models are learning from, let's say, all the web data, which of course is human-generated for all these decades on the internet. And then there's also a technique called post-training where, you know, the very ex- Experienced humans are teaching these AI models to be better assistant. And now the state of the art is that these models obviously are very capable across the board.

• 43:37Speaker 04

  However, they still lack reliability with agents and and you know, performing kind of day to day tasks. They're getting better, but even those kind of skills have to be taught by through human data, believe it or not. And now, you know, there is sort of perhaps a misconception that, you know, the like it's kind of machine generated data or human data. The state of the art or the frontier is essentially hybrid data. Like there are like most of the latest cutting edge data sets that are being generated that, you know, improve these model capabilities are fundamentally kind of AI assisted.

• 44:19Speaker 04

  So, you know, these experts, humans across wide range of domains in human knowledge, coding, mathematics, physics, you name it, they they actually use AI systems to to kind of produce a very best signal that is then used to enhance the capabilities of the models.

• 44:40Speaker 01

  So we've had machine led data labeling, we've had human led data labeling, and now we have AI assisted human data labeling. Do you think that's going to be the state of the art for a long period of time? Or is this just one more iteration on a cycle of constant change?

• 44:54Speaker 04

  So I I believe that the there is a long road to make these models highly capable and kind of be fully integrated in the economy. So when you look at kind of the adoption of these AI systems, they are obviously amazing and really changing the the way we do work.

• 45:19Speaker 04

  However, these agents are still not as reliable. These agents still need to be taught how to kind of fully automate a task. You know, whether it's maybe even software engineering, like, you know, you can. You're coding with humans in the loop essentially. But I think, you know, when will be the time where AIs can actually write code for days or weeks? And humans are sort of like steering or sort of managing them. And these examples kind of are across the board, you know, when will the AIs be able to be hundred percent act as a customer service on on your business behalf and sort of like resolve all these issues? And, you know, these kind of capabilities are very lucrative to solve.

• 46:03Speaker 04

  And they require a ton of new kinds of data. And you have to generate this data somehow. And one of the best techniques that, you know, we are pioneering and is essentially using a kind of technology, AI and software and workflows with human experts to very cost effectively capture human expertise in the data, which then is used to kind of train these models through reinforcement learning.

• 46:38Speaker 01

  All right, now, when I think about you guys, I think that what you describe falls under your kind of data factory concept. Can you explain that for folks who might not be familiar with what you guys were saying there?

• 46:50Speaker 04

  Yeah, for sure. So in the data labeling business, or let's call it like data generation for post-training for these models, there is a number of kind of ingredients that goes into it. So first of all, you have to have a a network that is attracting and assessing really high end talent who exhibits certain knowledge that is superior than the AI. It could be, you know, just sort of like a base kind of IQ, like, you know, so humans can have like high agency to learn new things and kind of do things that AIs can't do. But then also there is kind of deep expertise, you know, whether that's, let's say,

• 47:35Speaker 04

  an aircraft design, it could be medicine and healthcare and so forth. And so you have to have that sort of network. And that's really just a starting point. And so you may have seen like a number of companies popping up as a export staffing agencies model.

• 47:51Speaker 01

  Yeah.

• 47:51Speaker 04

  And they're all they're really doing is helping some of these AI labs to hire talent. Now, we take that idea further. We call it data factory because you you kind of need a workforce to obviously

• 48:05Speaker 04

  operate in some sort of a setting to actually produce human data. So Labelbox has been in the, you know, in business for over like seven years, building that technology platform. So so we build all the tools, the workflows and techniques to actually produce the data. And so we have a network. And then on top of that, there is a kind of fairly complex and sophisticated technology platform, which uses AI and software and things like that to allow these experts to work in a manner that produces the very best data at a very cost effective kind of parameters. And that verticalized stack, what we call is data factory.

• 48:49Speaker 04

  And sort of this analogy kind of really holds where, you know, when you're building a factory or you're operating a factory, you've got to have infrastructure, machines, assembly lines, the workflows, the practices, but then you also need the workforce. And Labelbox is fully verticalized in the sense that we actually produce the data and and offer that to the our customers that that in a manner, you know, that they can actually get the data very quickly in a matter of hours, if not days. And it's really the data that, you know, these AI labs want ultimately to to continue to win in the race.

• 49:26Speaker 01

  Yeah, it's interesting because if you go back to the SaaS era, there was a lot of discussions about software versus services and how you wanted to be a majority software business. You might sell services at cost simply as an enablement tool for your software business. But it really feels like the way you're describing the data race for AI, there is a strong human component in it, at least at the expert level. How does that impact how you price and sell Labelbox services? Because I'm curious how you think about the two different sides. Of the data factory.

• 49:55Speaker 04

  Yeah, totally. So it's a fantastic question and observation. So you know, for first five years of our company, we primarily sold SaaS. We basically built the world's leading data labeling platform. And our platform would be as used by over thirty percent of Fortune 500 companies. And they kind of, in this context, our customers are bringing their own workforce and operating the entire data labeling operations on our platform. And, and you know, in those contexts, it would be sort of like a SaaS based pricing systems, you know, where it's based on how much consumption or data customers are generating and they're paying some kind of kind of a correlated cost that to us on that.

• 50:39Speaker 04

  And when we decided to fully verticalize and get into kind of data services business, you know, just over a year ago, we, now we are pricing essentially on the data, like how a per as example perhaps, and, and, and sometimes it's the value that our data is bringing among our customers. So for example, just even

• 51:01Speaker 01

  Interesting.

• 51:01Speaker 04

  A couple of weeks ago, you know, we were, we enabled one of our, one of the leading AI labs to increase the state of the art performance by fifteen percent on a data set that we created for them. And that could be like valuable, like extremely valuable to that company, you know, in the order of hundreds of millions of dollars of value generated. You know, the models is bumps up in a leaderboard and they are able to onboard more workloads and things like that. And so, so that is fundamentally like how we are pricing. It's based like on the value of the data we are generating for the customers.

• 51:33Speaker 01

  Is it hard to price? Because I feel like value from data is squishy and you guys, if you're pricing that way, probably want to charge more because you think it's more valuable and they might want to say, oh, you know, it was only so good. So how do you handle that tension?

• 51:46Speaker 04

  Yeah, there's always that kind of a discussion around the data and the cost and the value. And you know, we are, it is fundamentally hard to price. And it's a new frontier for not just us, but many other companies, the native AI apps companies, who are essentially like a very similar model where they're kind of automating some workflow and so forth. And in our business, particularly the challenging part is that every few months, the state of the art is kind of at a much higher end. You know, so for example, a year ago, a lot of the data we were generating was around

• 52:27Speaker 04

  kind of basic assistance, like teaching English skills, like how to write great essays. Now we are producing RL involvements for these labs to kind of like do this reinforcement learning with variatable rewards. Very different technical skills that needed, very sophisticated data sets. And you know, ultimately, data is actually becoming more costlier. And the reason is that the expertise needed is becoming more kind of more complex or more nuanced. However, with that said, we are proud to be saying that we are actually one of the leading companies in the sense

• 53:10Speaker 04

  that when you look at the data and the cost, we are able to, we are the unmatched in that performance or then parietal curve. And we are able to do that because of a very strong technology stack that is operating on top of the kind of the expert network.

• 53:26Speaker 01

  I really appreciate that answer. That explains it kind of top to bottom. Mono, I want to go back in time. You guys last raised, the publicly known round was 110 million led by SoftBank, and it was announced in very early 2022. That was pre-ChatGPT's launch and what you might call the starting gun of the Gen AI era. I presume the market moved towards you in that year. So how much did the release of ChatGPT speed up demand for your company's services? And then, if you can, how much did you guys grow last year?

• 53:57Speaker 04

  Yeah, so the the demand has increased substantially. I mean, it's really all engines on fire, you know, over since since since actually like when we decided to enter the data services market. So kind of a bit of a history, just about up to less than a year ago, we decided to enter data services market. Up until then, we were essentially selling enterprise platforms across across the world, across these like enterprises. And I'm proud to say that we are powering most of the AI labs now. And and so we've grown from basically entering the market to now powering a substantial workloads

• 54:40Speaker 04

  for nearly all the big AI labs. And, you know, we've been growing very fast since then. And basically in hyper growth kind of trajectory. And I think this latest news, kind of the market dynamics that over the last two weeks has further catalyzed or accelerated that growth. And, you know, so it's been really exciting times at Labelbox and, you know, there are challenges around like, how do you scale that quickly and, you know, meet customers and all that. And so, you know, this I call it still to be a challenge, but at least it's a fun challenge.

• 55:16Speaker 01

  I do want to just verify something. You did say that they the the sale of scale to Meta and its customers leaving could actually generate hundreds of millions in new revenue for Labelbox. Is that a 2025 metric or is that a total contract value over kind of a multi-year period number?

• 55:34Speaker 04

  We expect substantial revenue over the next 12, 18 months for sure. We're experiencing it already right now at a much higher steep curve. And, you know, it gets harder and harder in larger numbers, but, you know, we are very, very excited about what's next in next 12, 18 months.

• 55:51Speaker 01

  I appreciate that. Now, with the exit of scale, it could kick off some consolidation in and around your space. You mentioned some other startups that are kind of popping up in your domain, admittedly targeting kind of a fraction of what you're doing. But I'm curious with your history of capital raises and success of the company and growth, are you guys interested in going into the market and maybe buying some smaller companies?

• 56:13Speaker 04

  We do get quite a few interests or inbounds almost every other week from kind of smaller players or companies and you know we are always assessing when the right fit is and when it makes sense. So certainly like we're very, very open to it. A lot of it really comes down to you know the complementary complementary kind of strengths and weaknesses and sort of that match. But we are actually seeing a lot of M&A activity and interest kind of boiling in the market across within our industry.

• 56:53Speaker 01

  Just because I have you here and I get to ask you this, by M&A activity bubbling up, is anyone trying to buy you or is this all companies that are reaching out to you as a possible acquirer?

• 57:02Speaker 04

  It's the latter, yes.

• 57:04Speaker 01

  Okay, any names that...

• 57:08Speaker 04

  It wouldn't be wise to say that here.

• 57:11Speaker 04

  It wouldn't be wise to say those things, but you know, but let's just say like many, many players are interested in joining forces with sort of leading companies and so forth. So you know, I think like any other category, right? Like there's a lot of enthusiasm, there's a lot of interesting players that have different techniques and different bats that they make. And at some point you expect like, you know, there will be some sort of consolidation. And I think now that the markets are more opening up for M&A, I think we're feeling it. We're seeing that through just like all kind of movements.

• 57:52Speaker 01

  Absolutely. Now, one thing that I was surprised by, just given how well the company appears to be doing from where I sit, is that at least publicly, you guys haven't gone back to the capital markets and raised more. Is that simply because you've been running the company pretty efficiently?

• 58:05Speaker 04

  Yes, that's right. We've, you know, we've generally ran the company...

• 58:11Speaker 04

  Fairly conservatively when it comes to capital and efficiency and things like that. And and we really wanted to be very sure and intentional. You know, when we go into kind of data services market that we are going to enter to win. And have all the key components and kind of capabilities needed for us to kind of demonstrate that. I mean, just over a year ago, we were not doing anything in this space entirely. And and so in this like last four or less than like less than four quarters. Now that we are plugged into all these labs and we're getting winning the market share from kind of the other providers. It's really exciting. And I think, you know, we are, we might, you know, we might do something in the future.

• 58:57Speaker 01

  So one thing that struck me as interesting about your background is that you've worked with drones before. And kind of a tangentially related point, I was also surprised to see that Uber is getting into the data labeling game in a more serious way. What's going on with people that deal with real world hardware systems getting into the the data side of AI? What should we take away and learn from that?

• 59:19Speaker 04

  Alex, so I've been very interested in technology across the board. And so when I was in school, I actually was doing a lot of research in neural networks. In fact, I remember my earliest times was I was trying to make flight control system in airplanes. Like powered by neural networks and you don't believe like at that time, the neural networks were like three or four layers. And you could count the neurons in MATLAB and Simulink and, you know. It's just a testament on how fast the technology has moved just from like a decade ago. And so so in engineering, of course, you know, a lot of my work was in genetic algorithms and like these algorithms to optimize things.

• 59:59Speaker 04

  And so a lot of my interest kind of, I suppose, when I was in software technology startups in Silicon Valley. Drone Deploy and Planet Labs, I saw computer vision starting to take off. And then I sort of like all these things kind of came to me and said like, hey, you know, I would love to build a company here. And I think there's an opportunity to build some enduring company that kind of sits in between this what we call AI and humans. I do think that, you know, over the next few like. Like, we are going to, we are moving into a world where we will be steering multiple, if not millions of AIs, and we would still want to be able to manage them

• 1:00:41Speaker 04

  and kind of keep them aligned. And I do believe that to do that, you still have to talk to the AI in some fashion, and that data interface is essentially what Labelbox is trying to build. And the techniques and all these like details will continue to evolve. You know, just how like the labeling has changed over the last six years. I think it will be very different in the next few years, too. But I do think the intrinsic need to continue to manage the AIs will remain the same. And so we are kind of at that frontier and always want to build awesome tools and services there at that layer.

• 1:01:20Speaker 01

  Manu, if I'm tracking you correctly, you're saying that the way to speak with or interact with AI models is essentially through bringing them data. Is that correct?

• 1:01:29Speaker 04

  That's right. That's right. Hundred percent. The way you ensure AIs are behaving the way you want it to do, or is representing your businesses, or is performing, you know, certain agentic tasks, you still want some checks and balances. You still want some, you know, evaluation data sets to, you know, test it before you roll things out. Or when, when things go wrong, when exceptions happen, you want to be able to have some sort of a human in the loop to make that sort of judgment, like, hey, why did it got wrong and how to teach it to get better? And, you know, I think we are very early in the innings of, like, you know, in AI adoption. I think it's going to power a ton of the economy over the years.

• 1:02:13Speaker 04

  And there's going to be just an insatiable appetite for new forms of data that ultimately represents humans, human preferences and human intent to translate that to AI systems.

• 1:02:29Speaker 01

  Manu, thank you so much. What's the URL and where can people find you on the internet?

• 1:02:34Speaker 04

  So, labelbox.com. I'm actually not as kind of present on the social media, but you could probably find me on LinkedIn, Old School Guy, and on Twitter, I have a handle, ManuEro.

• 1:02:48Speaker 01

  All right. Well, please enjoy Stanford in my stud. I miss California. Manu, we'll have you back on in a couple of months. Appreciate you.

• 1:02:54Speaker 04

  Awesome. Thank you for having me, Alex.

• 1:03:00Speaker 01

  Today, we have another TWIST 500 interview for you. Today, we're not talking about just LLMs up in the cloud. No, we're going to go back to planet Earth and talk about physical things, robots, but not just robots. My favorite subcategory of that group, it is humanoid robots. There's a lot of companies working on this space. Everyone from Tesla down to a number of startups, and they're making really big progress, moving us towards a world in which we are not as reliant on human labor as we are today, but instead can ask our friendly robots to do some stuff for us. So please join me in welcoming to the show. It's Jeff Cardenas from Apptronik. Jeff, how you doing?

• 1:03:34Speaker 00

  I'm doing pretty good. Thanks for having me on.

• 1:03:36Speaker 01

  I want to point out that I did ask about the cactus and his background before we started, and he said, quote, "It's a Texas thing." So I didn't know that, but Jeff, I do love to learn, and I'm glad you've taught me about, I guess, Austin-based botany. Is it actually a Texas thing, or is that more of a you thing?

• 1:03:50Speaker 00

  Well, I think what I said was, "I'm from Texas, so we have to represent." But no, it was a joke. We Texans are very proud of being from Texas, though, so I like to represent.

• 1:04:00Speaker 01

  I have noticed that. I have noticed that. All right, so Apptronik is a company that's been on my radar for years now. I think pretty much since you guys announced Apollo, that was back in 2023. It is your humanoid robot. I think it's five foot eight inches, about 160 pounds, can carry about 55 pounds, and has a relatively smiley and happy demeanor to it. So just to start, what did I miss there? And what has changed in the Apollo model since it was first announced?

• 1:04:29Speaker 00

  Yeah, I think, I mean, I think you covered the basics pretty well there. We've made a lot of robots, particularly a lot of humanoid since we got started. We're on our 15th iteration of robots since we got started. We've done about 10 iterations of humanoids. I think, you know, the key thing for us is really a much more robust version. So the first version that we showed of Apollo 1 was really an engineering prototype, not designed for mass manufacturing. We only made a handful of those systems. We have the new version of Apollo. Apollo 2 is now built and online in the lab, much more robust, much more scalable.

• 1:05:08Speaker 00

  Really wins in every sort of performance category we care about. Still roughly targeted the same payload. Little bit larger battery to achieve that four hour runtime that we're targeting. A lot of times there's a caveat in robotics where if you look at runtime of the robot, it depends on what it's doing. So if you're lifting peak loads the whole time, you're going to get one runtime versus you're doing something light duty. So we've learned a bunch from Apollo one and then poured that all into Apollo two. But we'd already done a lot of humanoids. We had a pretty good perspective of what we wanted to build and Apollo at the time was the robot that we always wanted to build and really just continuing in the same legacy that we started with.

• 1:05:49Speaker 01

  So you said the word robust a couple of times. I'm curious what that means in a robotic context. Does that mean just literally more durable or does that mean just more capable of a wider array of tasks?

• 1:06:01Speaker 00

  I'd say both. You can think of the, you know, the hardware is you don't want to be hardware limited, right? So you need a stable platform that you can train and build models on top of. So if the robot's breaking every, you know, day or for, you know, whatever your mean time between failure is, you can only make so much progress. There's a huge overhead cost of maintaining unstable hardware. So sort of the foundational thing you have to get right in this space is you need a stable platform that you can build on top of. And once you have a stable hardware platform, you can start to build more, you can make them more affordable and cheaper, but kind of that's the base case thing that you need. And these humanoids are pretty complex as you, as you really dive into it.

• 1:06:45Speaker 00

  So that was the key thing we wanted from the next version is a really stable, robust platform to build on.

• 1:06:50Speaker 01

  So going from Apollo one to Apollo two, is Apollo two sufficiently robust and market ready to kind of go past the testing stage with partners? And we can talk a little bit about with whom you're working in a second, but is Apollo two a robot that you're ready to kind of take to market in numbers?

• 1:07:09Speaker 00

  I mean, I think we're probably going to build, you know, in the hundreds of Apollo 2s. So I would say we're still going to be piloting. I've tried to be very honest about where I think the humanoid market is at overall. You know, the thing I like to point out is, humanoids are something that humans have been thinking about for thousands of years. You know, we conceived of humanoid robots before we conceived of computers.

• 1:07:32Speaker 01

  Yeah.

• 1:07:32Speaker 00

  The idea that we could build, you know, mechanical machines that could do things we didn't want to do. And we're at the very front end of the humanoid market overall. And so we're still going to be piloting for all intents and purposes for the next year. And we're going to be learning a lot from these pilots as they advance. And I think it's important to sort of define what we mean by a pilot, because everyone defines this differently. But we're not at the point where we have a turnkey humanoid that you can drop into your environment and you can just pay it to do work 24 hours a day, seven days a week. I would argue that nobody has that yet, though I think we're, there's several companies that are really on the path to get there.

• 1:08:13Speaker 00

  So I still think of Apollo 2 as the next generation of system that is out in the world. It's doing meaningful work, but we're still learning a lot from it. We don't have it dialed in. We're ready to start building tens of thousands of these things just yet.

• 1:08:29Speaker 01

  Yeah, well, there's a range there between can drop it in and it can do anything and needs to be hardcoded to lift a box. So can you just, for me, who's not spending every day in the lab, in the warehouse, watching these things grow and develop? How far along is Apollo 2 compared to, I don't know, a human laborer in a warehouse setting or in, say, a factory setting?

• 1:08:50Speaker 00

  So I think the days of hard coding something to, you pick up a box, those days are over, right? So we, we have reached this inflection point, not just in humanoid robotics, but in robotics as a whole, to where it's very clear that learning is going to be the future. So really, everyone's, that's why there's so much excitement and or hype, depending on, you know, how you think about it, is because there's this paradigm shift in the way that we can train robots all together. And learning is clearly the winner and the new paradigm. I think what we're working on now is as we get the ability to do these tasks, we're starting to climb the ladder towards task mastery out in the wild. So can we actually start to do these tasks at the same rate that a human can do them?

• 1:09:34Speaker 00

  And in that, it depends on the task that we're working on. So we're working on a range of different tasks and we're not as fast as a human today. So I'm not gonna make that claim. There's narrow portions of a task or a use case that we can start to approach parity with humans. But if you look at the range of things that are involved and even a single use case, we can't do everything at rate for a human. And so this is the work that we're doing is we're climbing this ladder of performance towards task mastery.

• 1:10:03Speaker 01

  Does it matter if a humanoid robot can be at parity with humans for a task at speed? Because my thinking is if you can take a humanoid robot and plop it in where you had a human, it can work not 24 hours a day, but call it 22 hours of the day. So it has more capacity to do more total time at work. So does it need to be at the same kind of speed parity?

• 1:10:25Speaker 00

  No, it doesn't. That's a great point. I think that's something that some folks get confused about. No, it doesn't. It depends on the application though. So, you know, at the end of the day, it's simple ROI math, right? Is how much does the robot cost relative to what you're paying today to do a task? And then what's the rate of that system? And you're just gonna do a calculation to determine is the ROI better? And sort of moving to this new technology? Or should we stick to the same thing we're doing today? In many cases, the interesting thing is that businesses don't have that decision to make because there's a massive labor shortage. So they don't, you know, this idea of do I stick with what I have today? It's like, well, I have a huge shortage and this is a big challenge and a big pain.

• 1:11:06Speaker 00

  And so this shift towards technology to humanoids is very interesting. But some of these tasks run already today, three shifts a day. So they're running 24 hours a day, seven days a week. So there's not that bleed over time that you're talking about where if the robot was half the price, you could put, you know, less robots and let it run, more robots and let it run longer. So it depends on the application. But there are plenty of applications that might be two shifts a day where you could let the robots run longer or you could throw more robots at the application, have twice the robots running, and you could still accomplish the same effective amount of work. So yeah, that's interesting.

• 1:11:45Speaker 01

  On the ROI point, I just did some quick Googling and I live near Massachusetts and apparently, according to the internet, Amazon warehouse workers and investors make about 16 bucks an hour. So when I consider ROI for a humanoid robot that might go in and take on a task where you can't find a human, should I be considering like the value output of that humanoid has to be at least like X dollars per hour and kind of set that rate compared to human wages? I guess my question, Jeff, is that just feels a little outdated to me as a concept. And so I wonder if I'm chasing the rabbit down the wrong hole here.

• 1:12:18Speaker 00

  I think that's the simplest way of viewing it, but it all depends on really what, you know, what customers are interested in. So there's a whole component where a lot of times in logistics and other things, you might have a line that's actually doing the work, that's kitting or sorting something, then you might have a quality control line where you have a separate process where you're checking to make sure things are done properly. There's opportunities where you can have a robot do both of those things at the same time. And so then you can look at that equation differently. There's also sort of fully burdened labor rate. If you look at many of these applications, we're looking at about a $25 an hour fully burdened rate where you have overhead. Sometimes in logistics, you're paying temp agencies for many of these workers and they're

• 1:13:03Speaker 00

  trying to flex up and flex down depending on the total work that's needed. And so you sort of have to take this holistic picture where it's maybe very rudimentary, but sort of coming in, if you're way out of the ballpark, if you're $40 an hour compared to this $16 an hour, you're just not in the game. But there are more sophisticated ways of looking at it and it depends on the customer, really.

• 1:13:26Speaker 01

  Yeah, fully burdened labor costs, if you've never had an employee, it might not make sense to you, but if you've had an employee, you know exactly what we're talking about. I want to talk about Google DeepMind, though. You guys announced a partnership with them. Google, of course, is deep in the AI game. I was watching F1 this weekend and they had written Gemini on every single thing they could. And so I'm kind of curious what that partnership unlocks for Apptronik. Is it just a lot of like help, support? Is it just cheaper model access? Are you guys collaborating directly on feeding in, you know, your data into their systems? What does that look like and how does it help?

• 1:13:57Speaker 00

  Yeah, well, I think it's interesting if you look at, you know, Apptronik and Google working together. I've characterized this as the space race of our time, and it just so happened you have Apollo and Gemini kind of teaming up here. We didn't plan that, you know, that working out that way. But, you know, my view is, is this is something that humans have been thinking about for thousands of years. And if we really want to solve it, we need the best people in the world working together on this. I think there's another story, which is if you look at the East versus the West, if you look at, you know, what's happening in China relative to what's happening in the West, I think that's another thread that we could pull. But my view coming into this was, you know, this is the future I've dreamed about since I was a kid. And now that we're in the window

• 1:14:39Speaker 00

  to make it happen, we don't want to have an ego about doing everything. We want to work with the best teams in the world that are sort of mission aligned in terms of what we're trying to do. And, and for us, it was very clear that, you know, Google really had the legacy and the scale to really help us make a dent and really make some progress here. So what we're doing is a range of things. We're working together in a very deep way. Google's a big investor in Apptronik as well. And we're really working together to try to push, you know, the boundaries of what's possible here, really push the industry forward. So them on the model side, us on the platform side, but then really coming together and testing this out in the world and getting it out, you know, from the lab out into the

• 1:15:23Speaker 00

  real world, hopefully in a really big way.

• 1:15:26Speaker 01

  Does it also imply that Google might become an Apptronik customer at some point in time in the future? Because they have a lot of facilities, data centers, like they have a lot of physical inventory that they have to take care of.

• 1:15:36Speaker 00

  I think the sky's the limit, you know, it's still early in terms of our engagement together. We've been working together for about a year. We have a lot of respect for what they're doing, not just the technology they have, but the way that they've done it. I think if you think about things like AI safety and other things, I think it's going to be even more important as you start to put this on a highly capable, dexterous, humanoid robot. And I've always respected the way that they've handled this. And so, you know, we'll see the partnership's still pretty early on. We've still got a lot to prove on our side as well. But yeah, the sky's the limit in terms of what we can do together.

• 1:16:12Speaker 01

  Well, just as a small aside, as you approach commercial viability over the next year, I really would love to stay as at best as possible at what you guys are working on. So please keep me in the loop because it sounds like this is the kind of rubber meets the road moment of all the work that has come before. And now, you know, you're out in the field actually testing and trying things. But Jeff, you're not the only one. You mentioned China earlier. I've been thinking a lot about competitiveness between our nation and our economic and political rivals over in China. Now, I think everyone watching this is familiar with a number of American humanoid robotic companies, Etronik, Figure, etc. Where does China stack up compared to us in terms of their similar projects? And do you think we're going to be leading

• 1:16:56Speaker 01

  at the national level? Or do we have some catching up to do?

• 1:17:00Speaker 00

  I think we're leading today. You know, the US made early bets in the humanoid space. We did something called the DARPA Robotics Challenge in 2013 to 2015. So we injected, you know, call it 100 million plus into this sector over a decade ago. Google itself actually made big investments in the humanoid space almost a decade ago as well. They bought up a lot of humanoid companies and really injected a lot of capital into the space even then. So we've had a head start in this space, but China's going to be a real contender and they're moving very quickly. And they have a national strategy, which is something we don't have yet. We're working on this today. But they, you know, they're several years into their national strategy. They also just announced a 1 trillion

• 1:17:44Speaker 00

  yuan national fund to fund their domestic robotics ecosystem. That's about $138 billion for those that want to do, don't want to do the math or the, you know, the conversion.

• 1:17:56Speaker 01

  Just divide by six and a half. It's close enough.

• 1:17:58Speaker 00

  Yeah. So I mean, they're, they're going to be a real force. And I think they have the supply chain and they have the manufacturing prowess and they have the will to do it, right? This is society transforming technology. Think about what an economy is. An economy is productivity per person. Change the number of productive units in an economy, you change what an economy is, right? And so this is something that we really need to take seriously and that we We need to really compete. And one of the things I think the Chinese are doing well is they're working together. So so much of what I hear in Western media is this focus on competition. How do we stack up versus Tesla or any of the other groups that we're competing against?

• 1:18:37Speaker 00

  And if you look at the Chinese, they're sharing data, they're sharing models, they're really working together with sort of a national strategy. And so I think that's something that we really need to think about as we sort of play this out, because the implications are going to be really big as we move ahead. But there are some great companies over there and they're moving quickly.

• 1:18:56Speaker 01

  So I don't disagree from a high level about your point about sharing data, working together, moving ahead as a group. But also, your last round was 350 million plus another 50 and change that came on. So there's a lot of money behind you, expecting you to win. How do we balance the power of private investment and free range capitalism with the idea of sharing and being a little bit more collaborative? Because to me, those seem to be at odds with one another. But if there is a way to to move forward faster as a national industry, I would love to hear it, Jeff.

• 1:19:33Speaker 00

  Yeah, well, I mean, I think I should say we're playing to win. You know, we've been at this for a very long time. I think, you know, this is, we talked about the partnerships that we have. But I do think there are things we can work together on. For example, we worked with groups like Agility and Boston Dynamics, pushing a national robotics strategy. That's something where a rising tide lifts all boats. We should be both sort of funding at the R and D level, sort of more investment in research labs and other areas. This is what something that China's done a good job of. And we should also be encouraging uptake of robotics nationally. This is a challenge that we've had sort of broadly in the US is sort of uptake of automation overall across a variety of different sectors.

• 1:20:18Speaker 00

  And so these are areas that we can work together on, that we can help push together. And, you know, we're still going to be competing as fiercely as anybody else. But, you know, where we can find ways to work together, we should.

• 1:20:30Speaker 01

  Trying to avoid politics as much as possible. I'm going to phrase this in a way that I think you can respond. It doesn't seem like right now there's a rising appetite at the federal level to invest in basic R and D. Is that something that could slow down aggregate improvement in the American humanoid robotics industry? Or is that actually not a concern in this particular domain?

• 1:20:54Speaker 00

  I mean, the simple answer is yes. I think if you look at just competitively us versus China, you know, if they're going to pour $138 billion into their sector, you know, what's our answer to that? Right? And so people talk about the money that us or Figure have raised, but if you compare that, you know, it's a drop in the bucket. And, you know, we do have, you know, Tesla that has a significant balance sheet, and we have others. But I do think at the fundamental level, we're still early days for humanoids. There's things, batteries, motors, all sorts of, you know, areas of fundamental research that we want to advance. And so, you know, my view is, is that's maybe that's not where this administration wants to play. So then let's look at other areas that are going

• 1:21:38Speaker 00

  to be important. Let's focus on the uptake and the adoption of these robots across different sectors. How do we incentivize businesses if they're going to compete globally and we're going to reshore manufacturing? How do we incentivize those businesses to buy American robots? And this is an area that I think that they can and will play. So, you know, it's early days, right? This is thinking of this is the 1980s for personal computers or something like that, where it's the beginning of a major industry. I think we're at the front end of a 40 year cycle here in robotics. And so there's a lot of different ways that we can build and grow this sector as we move ahead.

• 1:22:16Speaker 01

  If we're going to make fun analogies, I have to make one in return. So does that mean with us being in the 1980s equivalent of the PC era today, humanoid robotics, does that make the Apollo one like the Commodore 64 of? Humanoid robotics, like where would you rank it compared to the historical progression in PCs?

• 1:22:34Speaker 00

  I mean, I hope it's like the Apple II, right?

• 1:22:37Speaker 01

  Well, I was gonna say the Apollo II is gonna be like the Apple II. I was trying to throw you a bone.

• 1:22:41Speaker 00

  Yeah, yeah. No, I mean, look, I think, you know, these analogies don't hold perfectly, but I do think the PC analogy is the best analogy. I sort of characterize traditional industrial robots like mainframe computers. And you can think of humanoid robots as effectively the personal computer. My view is that humanoid robots are the best chance for robotics to scale beyond the limited applications that they're in to the broader market as a whole. We need this general purpose platform that's much more versatile than these than these robots that we had in the past. And if you sort of take that analogy, I think it's important to point out that it's early days. I think 50 years from now, there's these debates in humanoids that I sort of get a kick out of

• 1:23:24Speaker 00

  that are like, are humanoid type or they reality, you know, is it actually going to be next year? Is it going to be two years? And it's like, in the grand scheme of things, nobody's going to care if it's plus or minus two years. My investors certainly care, and I try to be very sort of honest about where I think we're at. But I think we have reached this inflection point. And I think 50 years from now, everyone's going to be telling their grandkids about being alive at the time when humanoid robots came about and all of the ways that the world change and improve as we sort of roll these out into broader society.

• 1:23:55Speaker 01

  They're also coming at a great time because as the world ages, we need more caretakers and so forth. And, you know, that's going to, I think, open up a lot of spaces for this kind of labor over the next 15 to 20 years, which is long enough to get it right, in my view. All right, Jeff, just one word before I let you go. You guys are building in Austin, Texas. We started the show with that with a little bit of a joke, but honestly, there has been a lot of folks that are moving to the Texas area to build hardware companies. Also a lot in Southern California, especially in a defense context. I'm curious why the company picked Austin and has it proved to be net accretive to the business to be in the little blue dot in the middle of a sea of red?

• 1:24:33Speaker 00

  Yeah, um, you know, I mean, we, we picked Austin because we're from Austin. So we, we spun out of the University of Texas at Austin.

• 1:24:40Speaker 01

  Oh, sorry. I had it backwards.

• 1:24:43Speaker 00

  Yeah, hook them. Close enough. But, you know, my, my thesis was though, I sort of looked at what I called the new economy in Texas. And, you know, we are traditionally an oil and gas state. One of the ways I've sort of explained is you can think of us like Saudi Arabia where, or the Middle East, where it's not just that we want new industries, we're going to need them over some time period. And we have this legacy industry that's been built up. And so my thesis coming out of grad school was that robotics is going to change. AI was going to make a big impact in what robots were going to do. And we were going to need major domestic robotics companies, major domestic OEMs. And the options were really the East Coast in Boston, or the West Coast in California. And for a number of reasons, I always believed

• 1:25:27Speaker 00

  that Texas was the best choice out of all of those. I think in robotics, geography matters, right? We can, we have the Texas Mexico corridor, component manufacturing and things that are going to be very difficult to do here in the US can be done in Mexico. We can build a supply chain up, or we can leverage the existing automotive supply chain in Mexico into robotics. And then we can get anywhere in the US in less than 24 hours. And so this is my thesis 10 years ago, was that Austin would be the place to build this kind of company. This was prior to Tesla and many of these other groups moving to Austin. And I think it's been a good bet overall. So I think Texas still remains a good bet. It's still early in the Texas and sort of story. If you think about tech and you think about

• 1:26:11Speaker 00

  Austin, where it's going to go. But yeah, it's been great for us. It's been awesome to see, you know, all the folks move here. And it's been really interesting to see these bets that you have when you don't know any better as a graduate student, actually start to pay off where people are starting to talk about Austin and humanoid robots. And, you know, we were, we were kind of right about some of the bets we made early on, and we'll, we'll see how it develops.

• 1:26:35Speaker 01

  See, everyone, it's not just podcasters. And Austin, there's a lot more going on there. Jeff, thank you so much. And by the way, when you do ship my Apollo 2, my address, I'll just text it to your team and you can just have it delivered whenever you want. No worries.

• 1:26:46Speaker 00

  Appreciate it. Sounds good.

• 1:26:48Speaker 01

  Jeff, what is the website? And quickly before you go, a role that you're hiring for, you're having a hard time landing the right person?

• 1:26:56Speaker 00

  The website is apptronic.com, A.P.P.T.R.O.N.I.K. com. And we're always hiring technical talent. So all across the engineering stack, if you're a great engineer, you want to build a future, you want to do it in a way that is designed to have the best future for humans, then you should come work for us and come check out what we're doing at Apptronik.

• 1:27:16Speaker 01

  All right, thanks, Jeff. Talk to you soon.

• 1:27:18Speaker 00

  Thanks for having me. Thanks.