Why We Invested In Cluely

In this episode, a16z general partner Bryan Kim joins TBPN hosts John Coogan and Jordi Hays to discuss the recent launch of Cluely , a consumer AI product. The conversation covers early traction, evaluating distribution and momentum, and how investors assess go-to-market strategies in emerging AI applications.

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

• 0:00Bryan Kim?

  I have a saying where momentum is a moat today in this sort of era of AI applications. And when I say momentum is a moat, I don't mean just distribution. I also mean product iteration. And so the calculated risk here is that Roy can convert this awareness into people clamoring to work at the company that are highly, high and exceptional, great people to build products and then use that to continue to iterate on innovation on the product format that is already amazing.

• 0:29Speaker 01

  Yesterday, A16Z partner Brian Kim joined TBPN with host John and Jordy. The discussion centers on Clouly, an AI product that has generated significant attention online. Brian shares his perspective on the decision to invest, how he evaluates early traction and distribution, and what he looks for when backing founders with unconventional go-to-market strategies. Let's get into it. As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice, or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund. Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast. For more details, including a link to our investments, please

• 1:12Speaker 01

  see a16z.com/disclosures.

• 1:20Speaker 02

  Brian, welcome to the studio.

• 1:22Speaker 03

  How are you doing? Good to meet you.

• 1:24Bryan Kim?

  Good to meet you. Great to be here. Thanks, John. Thanks, Jordy.

• 1:27Speaker 02

  Your notifications must be crazy right now. Clouly, you guys decided, hey, Friday, let's throw it out.

• 1:33Speaker 03

  Took over the timeline.

• 1:34Bryan Kim?

  That's right.

• 1:34Speaker 02

  Nobody's crazy to launch.

• 1:36Bryan Kim?

  Everyone's going on a weekend.

• 1:38Speaker 03

  Yeah, there's no other Andreessen deals that are really taking up mind share right now. This is the one.

• 1:43Speaker 02

  Yeah, you guys, the thinking machines was leaking to the FT.

• 1:48Speaker 03

  Steamroll the $2 billion deal.

• 1:49Speaker 02

  And of course, Clouly is just gonna suck all the attention out of the room.

• 1:52Speaker 03

  For sure. This is the hot one.

• 1:54Speaker 02

  Anyways, we got, we got your, we got your launch post here that we read

• 1:58Bryan Kim?

  There we go.

• 1:59Speaker 02

  Earlier on the show, but why don't you break down background on you and then let's break down the deal, why you invested. And then, then of course, we're going to have Roy on in just 10 minutes.

• 2:08Bryan Kim?

  Fantastic. Background on me, been at A16D for four or five years. Look at a lot of AI applications. You met a bunch of my colleagues here and had them on already. That's an 11 labs function house of the world. And prior to this was a, was a snap as an early employee and with the CFO.

• 2:25Speaker 03

  Were you down in LA?

• 2:27Bryan Kim?

  Yeah.

• 2:27Speaker 03

  Are you in LA now?

• 2:29Bryan Kim?

  No, I'm in New York right now, but my heart is in LA.

• 2:32Speaker 03

  Okay. Yeah. We gotta get you back. LA is, LA is coming up.

• 2:35Bryan Kim?

  It was too, too nice to live, you know? All right. So deal rational, anatomy of deal, or as you said.

• 2:42Speaker 03

  The anatomy.

• 2:43Bryan Kim?

  I think it like really, really breaks down to a couple of things, but really three points. One is, you know, distribution. It's really, really hard to get distribution these days. And to get it repeatedly is a little bit of a dark art.

• 2:55Speaker 03

  Yep.

• 2:56Bryan Kim?

  And so I think Roy had that in abundance. So one, got the distribution. We invest for strengths of strengths, as you know, not lack of weakness. And so that's really exciting for us. Second, I love the product. You know, I grew up on Dragon Ball Z. And I always wanted to do one of those scouters that tells you how strong is Jordy, how strong is John? Like the thing goes up, right? And that's essentially what it is on your rep browser, right? Talking to people, you just click command enter and it just gives you all the things you need to know while reading it and looking into your eyes. I think that's special. I think that sort of is right for a lot of the use cases, whether it's consumer or enterprise. So I love the product.

• 3:37Speaker 02

  So that's, that's one thing I'll call out today. We've had our intern over on the intern cam testing, testing the product all day long. And I've been impressed.

• 3:46Speaker 03

  Yeah.

• 3:46Speaker 02

  Impressed. He's there.

• 3:47Speaker 03

  Tyler, give us your review. How are you liking it so far?

• 3:51Bryan Kim?

  Yeah, it's been really good. I mean, it's very fast. The answers are really good. I think it's like a great product.

• 3:56Speaker 03

  Well, that's amazing. Out of 10, what would you rate it?

• 3:59Bryan Kim?

  Why did you put it? I would say nine.

• 4:03Speaker 03

  It's our version of kind of like the the office in a box. What do they call it?

• 4:07Speaker 02

  Yeah, a lot of people have like these toll booth.

• 4:11Speaker 03

  Yeah, yeah, yeah, yeah.

• 4:12Speaker 02

  Phone booth style.

• 4:14Speaker 03

  I think the world economic forum says like live in the pod and our version of a pod is a Maybach.

• 4:19Speaker 02

  Yeah, it's very perfectly, it's perfectly soundproof. So when we don't want to hear him.

• 4:23Speaker 03

  He just rolls up the window.

• 4:24Speaker 02

  He just rolls up the window.

• 4:25Speaker 03

  But he's got a desk in there. He's got a comfortable setup.

• 4:29Bryan Kim?

  Phenomenal, phenomenal.

• 4:30Speaker 02

  Massage chair.

• 4:31Bryan Kim?

  Good ergonomic.

• 4:33Speaker 02

  Yes.

• 4:34Bryan Kim?

  Yeah, and maybe the last bit.

• 4:35Speaker 03

  Yeah.

• 4:36Speaker 02

  Yeah, so that was, so we've, we've had Roy on the show a couple of times. We've covered some of the various stunts. And we got some pushback. One of the times we had him on because we hadn't used the product and somebody was calling us out. And now as a company, we're paid, we're paid subscribers of Cluey. We're customers. Throw, you can throw the TVPN logo on the site.

• 4:57Bryan Kim?

  Excellent, excellent.

• 4:58Speaker 02

  I've been impressed, like, we were kind of firing back questions, using it more in that interview functionality. And, and the answers were very good guestimates of, of, you know, if somebody that had generalized knowledge on a topic, being able to answer quickly.

• 5:12Speaker 03

  I think it answered a better question on, it answered, it answered the 747 question better than my chat GPT 40 direct answer question.

• 5:20Speaker 02

  Clearly mogged, clearly mogged 03.

• 5:23Speaker 03

  Yeah, yeah, yeah. Whatever, whatever the fine, whatever, I wasn't 03.

• 5:26Bryan Kim?

  Clearly mogged 03, love that.

• 5:27Speaker 03

  But it did well.

• 5:29Bryan Kim?

  I guess the last point I'll just add on, you know, it's a, you know, revenue conversion. A lot of people think, oh, it's just hype and what's happening? Is it all distribution, all the stunts? The truth is that he, he is actually converting that to revenue, right? Whether it's consumer or enterprise. So that to me is sort of the, I guess, the seriousness that underlies the crazy stunts that people see outside. And that combination works for me. I'm excited for it. And, you know, let's go.

• 5:58Speaker 02

  Let's go.

• 5:59Speaker 03

  Let's go back to the first one. Roy is clearly great at distribution, breaking through, getting attention.

• 6:06Speaker 03

  It feels like earned media does have a cap versus paid media or brand marketing or some of the other flywheels, the, you know, referral programs or, or, you know, some viral mechanic.

• 6:21Speaker 02

  It doesn't have a cap, John. He's gonna be in front of Congress, you know, using Cluely and some spectacles.

• 6:25Speaker 03

  Well, that's a good question.

• 6:27Speaker 02

  Cheating when he's dragged in front of Congress, you know, for antitrust.

• 6:30Speaker 03

  Do you think it has a cap or, or, or, and, and because you could, one, one scenario is, is this is his, this is not, this is not his, uh, this is not his permanent go-to-market motion. It's, it's merely the beachhead. It's, it's the way to break through, get attention, hire the first 50 interns, but the next thousand interns will come through recruiters and kind of standard practice and he'll be on a more traditional podcast circuit when he has news, uh, but we won't be hearing from him every single day. Uh, the other is that maybe we're in a new era and he actually can, and the company can go viral every single day. And you're seeing kind of the, the Mr. Beast playbook in reverse instead of Mr. Beast going viral every day and then launching a, uh, a snack brand, uh, the other way around.

• 7:13Speaker 03

  So he's builds a company and then becomes famous on the back of that company. Uh, which one of those feels right to you?

• 7:20Bryan Kim?

  Yeah, I think, uh, maybe I'll just comment one, Mr. Beast follows Roy. So that, that's.

• 7:25Speaker 03

  There we go.

• 7:26Bryan Kim?

  Fun, fun fact one.

• 7:27Speaker 03

  That makes sense.

• 7:28Bryan Kim?

  Fun fact two, I think from a media and audience perspective, John and Jordy, I think, I think of it as like a bunch of oceans. There's no one ocean. There is Indian, Pacific, Atlantic, and that's Twitter, you know, Facebook properties as well as like, you know, more organic and all of these pools of water are very, very deep.

• 7:48Speaker 03

  Yeah.

• 7:49Bryan Kim?

  And in terms of general population, who I lovingly call our, you know, consumers, I still think it's so early. The only consumer AI product people are using are really ChatGPT.

• 8:00Speaker 03

  Yep.

• 8:01Bryan Kim?

  And for them to actually learn about products like this and use it, I think the, the, the sort of oceans way deeper than we imagine and we're just scratching the surface today.

• 8:10Speaker 02

  Talk about calculated risk. This feels, you know, this is a calculated bet. You guys invested 15 million in the company. He's clearly talented on the product side, clearly talented on the attention side. You know, he's charismatic, he's fun to talk to, he's well spoken, all these things. So there's a lot of reasons to love it. And then the pushback and other VCs that maybe didn't do the deal would say, oh, Roy's like a wild card. Like, do you think that more investors need to be comfortable with like a very potential real risk? And maybe the average VC has just gotten a little soft?

• 8:49Bryan Kim?

  Good things. I think, look, like if you think of the history of large, general population products, you see a lot of them actually being pretty risky early on. Sot or not for Facebook? Where does Snap begin? What was, you know, Reddit initially? And sort of thinking about that, I think there is a beginning of a lot of the consumer products and products that are used by many people have a funny beginning sometimes. And I think, so one, calculated risk side, we're comfortable with that. And I think second thing is when I, you know, I have a saying where momentum is a moat today in this sort of era of AI applications. And when I say momentum is a moat, I don't mean just distribution. I also mean product iteration.

• 9:32Bryan Kim?

  And so the calculated risk here is that Roy can convert this awareness into people clamoring to work at the company that are highly, high and exceptional, great, great people to build products and then use that to continue to iterate on innovation on the product format that is already amazing. So that's sort of the bet, if you will. And when those two come together, I think we'll be surprised.

• 9:54Speaker 03

  How do you think about restrictions or dynamics from the major, like big tech companies? Because you mentioned that, you know, there's a consumer angle here, but when I see the product, I see it as a desktop app and many consumer interactions happen on the phone. And so, you know, Roy was fantastic at creating a viral moment around the idea of like using On a first date and yet you're not going to have a first date over a Zoom meeting on your MacBook Pro.

• 10:28Speaker 02

  Maybe, maybe Roy's planning another pandemic.

• 10:32Speaker 03

  Maybe, but, but, but, but people do talk to each other on the phone and on FaceTime, but it's much harder to plug in and do screen recording and do picture in picture and all of that. So it feels like there needs to be some sort of transition point if you're going to go broader to killer use cases for consumer. But at the same time, you're going to bump up against a ton of pushback from the platforms who just say, we don't want to give you access to that API. We don't want you to screen record for, for, for privacy reasons, good or bad.

• 11:05Bryan Kim?

  So I don't disagree. We are techno optimist and I would believe that there will be another innovation that actually allows the likes of truly to live and be omnipresent and everyday interaction. That said, you know, AI is like a digital god we created and we trapped it behind the little chat box. So it is natural to me that it should live on a thing that you actually work and interact with the most. And we're starting with computers today because that's where the power is. Like that's actually the digital god is not godly enough on the little, little, you know, little devices today. So we put it in a little larger box. And the little boxes will get better and we're excited for that future.

• 11:45Speaker 02

  Awesome. Well, I'm excited for you guys. Congratulations on the deal and we got to get Roy in here. We should pull up, we should pull up the launch video as well. But thank you for joining. Thanks for having me. Brian, thank you for being bold and making a real bet.

• 11:56Speaker 03

  Probably had to fight it out with the American dynamism team because as we know, they're working on hardware, they're working on reindustrialization, they're doing everything over there. Thank you so much for stopping by. We'll talk to you soon.

• 12:06Speaker 02

  Cheers.

• 12:09Speaker 01

  Thanks for listening to the A16Z podcast. If you enjoyed the episode, let us know by leaving a review at ratethispodcast.com slash A16Z. We've got more great conversations coming your way. See you next time.