The framework for building AI startups from a product design genius

Join me as I chat with Mike Hudack, CEO of Sling Money, as we deep dive into AI startup strategy by discussing frameworks for building AI companies, product development approaches, and go-to-market strategies. The conversation covers practical advice for entrepreneurs considering AI ventures, from choosing between B2B and B2C models to pricing strategies and competition analysis. Hudack shares insights from his experience at Facebook and current venture Sling Money. Timestamps: 00:00 - Intro 02:12 - AI agent framework and startup ideas 08:19 - Discussion of successful AI companies 16:20 - B2B vs B2C strategy 19:28 - Product development philosophy 25:20 - How to think about Competitors 28:40 - Go-to-market strategies 33:46 - Pricing and monetization discussion 39:16 - Mark Zuckerberg's Perspective on AI Key Points: • Framework for AI agents: single clear action, instant feedback, bounded decisions, zero friction • Three promising AI companies discussed: Greenlight (fin-crime), Granola (note-taking), Gradient Labs (customer service) • B2C vs B2B strategy: B2C has higher potential but higher risk, B2B offers more predictable outcomes • Product development approach: focus on solving genuine pain points and building with meaning 1) On picking AI startup ideas: Look for repetitive, time-consuming tasks that: • Have clear actions • Provide instant feedback • Make bounded decisions • Create zero friction Examples: Flight booking, restaurant reservations, scheduling 2) The most promising AI companies right now: • Green Lite - Automating financial compliance • Granola - AI-powered collaborative note-taking • GradientLabs - Next-gen customer service • Domu - AI debt collection with empathy All solving specific, manual problems with tight feedback loops. 3) Framework for choosing what to build: Run a "regret minimization" exercise: • Imagine yourself 5-10 years in the future • Consider all possible outcomes • Pick something meaningful you'd be proud to work on • Must be excited to wake up for it every day 4) On B2B vs B2C products: B2B: • Easier to validate • Clear path to revenue • Lower failure rate • Smaller outcomes B2C: • Bigger potential upside • Harder to get right • Need to catch lightning • More glory (if it works) 5) On pricing AI products: Formula: (Human labor cost saved + Emotional damage prevented) × (20-50% discount) = Your price Pro tip: You CAN raise prices later if you build something people truly love. 6) Go-to-market strategy for AI products: • Build in public • Create early waitlists • Find your core believers • Let them help shape the product • Focus on native content for your audience's platform 7) On competition: Don't be afraid to copy primitives (basic features everyone needs) BUT: • Stay true to your vision • Keep a mental tab on competitors • Don't get sucked into being reactive • Maintain consistent narrative Most important lesson: Build something YOU deeply care about. The most successful products come from genuine passion, not just market opportunity. Notable Quotes: "We don't make services to make money, we make money to make better services." - Mike Hudack (citing Walt Disney/Facebook) "If you build a thing which is beautiful and people love and has a place in their lives, you can charge more for it later." - Mike Hudack Want more free ideas? I collect the best ideas from the pod and give them to you for free in a database. Most of them cost $0 to start (my fav) Get access: https://www.gregisenberg.com/30startupideas LCA helps Fortune 500s and fast-growing startups build their future - from Warner Music to Fortnite to Dropbox. We turn 'what if' into reality with AI, apps, and next-gen products https://latecheckout.agency/ BoringAds — ads agency that will build you profitable ad campaigns http://boringads.com/ BoringMarketing — SEO agency and tools to get your organic customers http://boringmarketing.com/ Startup Empire - a membership for builders who want to build cash-flowing businesses https://www.startupempire.co/ FIND ME ON SOCIAL X/Twitter: https://twitter.com/gregisenberg Instagram: https://instagram.com/gregisenberg/ LinkedIn: https://www.linkedin.com/in/gisenberg/ FIND MIKE ON SOCIAL Mike’s Website: https://hudack.com/ X/Twitter: https://x.com/mhudack LinkedIn: https://www.linkedin.com/in/mhudack/ Sling Money: https://sling.money/

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

• 0:00Greg Isenberg?

  What haven't we covered that we should?

• 0:03Speaker 01

  Pricing, monetization, how you make money?

• 0:06Greg Isenberg?

  Yeah.

• 0:08Speaker 01

  It's important.

• 0:08Greg Isenberg?

  Oh, yeah.

• 0:10Speaker 01

  The first thing I'll say is that one of my favorite lines about this is, I think it's originally Walt Disney quote, which is, "We don't make movies to make money, we make money to make more movies." And Facebook co-opted this, and it's in the Little Red Book, you know, which is, "We don't make services to make money, we make money to make better services." And I really believe that the most successful companies in the world have that view. I think that you can build an incredibly successful company that makes you millions of dollars that does not have that view. You know, that's kind of like the more mercenary approach, but you kind of need to decide who you are

• 0:48Speaker 01

  before you start with your pricing strategy.

• 1:12Greg Isenberg?

  So today, we have a very special guest. I would say on my Mount Rushmore of product people, I only, I think I only have two people that come to mind. One is Scott Belsky, who I've had on the pod before, Chief Product Officer of Adobe. He advised my last company. Super, super smart guy. And the other, way less known in the internet world, but people who know, know. Mike Udack. So I appreciate you coming on here and lending your brain to get people to think bigger about startup ideas and spaces that you're interested in.

• 1:50Speaker 01

  Thanks, dude. That's really kind of you to say.

• 1:54Greg Isenberg?

  It's true. It's true. And it's, you know, one part of the show I'm trying to do is like, people who who might not have as much internet fame, like bring them and give them the platform. Because dude, you're a smart guy. So, so.

• 2:10Speaker 01

  Thank you.

• 2:10Greg Isenberg?

  Yeah. Well, what, uh, what's on your mind today?

• 2:16Speaker 01

  Oh, my God, so many things. You're, okay, so you asked me to come up startup ideas. So what are the most annoying things that you've had to do in the last, like, week? That have taken you a bunch of time that you feel like an AI could do, you know, with by just throwing some compute at it?

• 2:33Greg Isenberg?

  Yeah.

• 2:34Speaker 01

  Do you have a list? Do you know what they are?

• 2:37Greg Isenberg?

  Um, I can probably, I can probably figure that out.

• 2:43Speaker 01

  Like, can you find like, because I mean, I can tell you off the top of my head, right? Like, I would pay an AI agent to book me a flight.

• 2:52Greg Isenberg?

  Right.

• 2:53Speaker 01

  I'd pay an AI agent to book me a hotel. I'd pay an AI agent to book me a restaurant or find me a restaurant. And I'd probably spend a lot of money on all three of those things.

• 3:05Greg Isenberg?

  Yeah.

• 3:07Speaker 01

  And I think that those are all things that they could be really like tremendously good at.

• 3:12Greg Isenberg?

  So it's funny you bring this up. So I was writing this down for myself. Maybe I'll post this on my newsletter. But I was thinking about, okay, what, like, what's a framework for thinking about creating AI agents? From a product perspective? So here's what I wrote down. A single, clear action.

• 3:31Speaker 01

  Yeah.

• 3:32Greg Isenberg?

  Instant feedback.

• 3:34Speaker 01

  Yeah.

• 3:35Greg Isenberg?

  Bounded decisions and zero friction. So I wrote down smart agents that can actually think, that can understand what you mean, learn from mistakes, explain decisions, handle new, new situations. So then I wrote down, by the way, I wasn't planning on sharing this. So these are just some rough notes. So I was like, okay, how do you build a smart agent that is going to be valuable? Start with one action that matters. Add LLM, understanding. Build tight feedback loops, learn from every interaction and expand slowly. What do you think about that?

• 4:09Speaker 01

  I think that's exactly right. And I like, I think about, okay, so these are all things that I've had to do in the last week. Right. I've also had to deal with scheduling, which is really annoying. And I was really struck, I had a really amazing like personalized AI like LLM experience recently where I used. I was trying to find this investor I was talking to who's Japanese. I remember that when I spoke with him, he was in California. And he's on the board of

• 4:35Speaker 01

  some Japanese financial conglomerate, but I couldn't think of the name. And so it's going to be a nightmare to find in in superhuman. But I realized that there was Ask AI and I just said all of that. And it came up with the wrong answer the first time. And I said, no, no, no, the guy I'm talking about has a Japanese name. And I came up with the right answer the second time. And it was the first time that I've had like a really personalized, like I'm just talking out loud, trying to like find recall moment where like an AI actually really solved that problem for me. And we use AI, I'm building this thing called Sling Money right now.

• 5:18Speaker 01

  And we use AI for a bunch of stuff for customer service, for for financial crime, compliance reasons, you know, all sorts of things. It automates repetitive tasks, which are a real pain, like going in, we use this thing called them Greenlight to do EDD, like enhanced due diligence on people. So it goes and searches the web and then comes back with all the information. You can just click one button, you know, it's great.

• 5:44Speaker 01

  And I, I think that if you were to catalog all the things in your life, which are like a real pain in the ass that fit your criteria, it's a good list.

• 5:53Speaker 01

  You, you could very quickly like train an LLM on your past restaurant visits or your Google Maps history or your email to like learn about what kind of stuff you like. And then it can just, have you seen the new Arc, the new browser company Browser?

• 6:10Greg Isenberg?

  Dia?

• 6:12Speaker 01

  Yeah, I think that's what it's called.

• 6:13Greg Isenberg?

  Yeah.

• 6:14Speaker 01

  They've been kind of teasing it a little bit and it goes and it browses and it explains what it's doing. You know, you just type, you're like, hey, you know, do this for me. And it's like, oh, okay, I'm gonna go do this. I'm now going to click on this thing. Like, why can't you just have that for like all the things that I have to do every day? That's like a pain in the ass. And I'd pay five bucks for each one of them.

• 6:33Greg Isenberg?

  Yeah, I mean, I shouldn't be sharing this because like my team told me not to share this, but I can't help myself is agencies are a really good business right now because it's super manual, like it's humans doing things. It's in a particular niche, like a good agency is focused on SaaS, fintech, they're the best at, you know, just this one niche. And if you think about agencies, like, you know, I wrote down in the same document, I was like, agencies, like agent are the new agencies.

• 7:09Speaker 01

  Yeah, for sure.

• 7:11Greg Isenberg?

  So I think if I was trying to build an AI agent that I can sell to someone, of course, we can, you know, come up with consumer ideas, but like, I'd probably start by just becoming a, I'd either build or buy an agency. Quick break in the pod to tell you a little bit about Startup Empire. So Startup Empire is my private membership where it's a bunch of people like me, like you, who want to build out their startup ideas. Now they're looking for content to help accelerate that. They're looking for potential co-founders. They're looking for tutorials from people like me to come in and tell them, how do

• 7:54Greg Isenberg?

  you do email marketing? How do you build an audience? How do you go viral on Twitter? All these different things. That's exactly what Startup Empire is. And it's for people who want to start a startup but are looking for ideas, or it's for people who have a startup, but just they're not seeing the traction that they need. So you can check out the link to startupempire.co in the description.

• 8:18Speaker 01

  That's so interesting. So some of the best AI stuff I'm seeing right now, there are three that I think are really amazing. So Greenlight is one, which we use for Fin Crime. Another one is Granola, which is like a personal, like note-taking app.

• 8:33Greg Isenberg?

  Wait, hold on, Greenlight? I haven't heard of this. Let me, let me pull this up.

• 8:36Speaker 01

  G R E E N L I T E. It's like a Fin Crime. It's like a. Compliance thing.

• 8:43Greg Isenberg?

  Let me share my screen real quick and we can, we can learn together.

• 8:47Speaker 01

  This fits into the same category of task where when you're running like a bank or a financial product, you often have to do research on people to clear an alert. Or you have to like, figure out what somebody's trying to do with a transaction or something like that. And that's like a lot of really manual work. And most of it now can just be completely automated.

• 9:14Greg Isenberg?

  Dude, this is crazy.

• 9:16Speaker 01

  Yeah.

• 9:18Greg Isenberg?

  This is crazy.

• 9:20Speaker 01

  So I was their first customer. Sling was their first customer. And we were like their design partner and they're, they're crushing it now. I mean, just unbelievable.

• 9:32Greg Isenberg?

  Yeah, this is, this is gonna be a huge business.

• 9:35Speaker 01

  Massive.

• 9:35Greg Isenberg?

  Yeah. Okay. What was this? The other one?

• 9:39Speaker 01

  So Granola, which is a note taking app.

• 9:42Greg Isenberg?

  Right.

• 9:43Speaker 01

  I should say I'm invested in all three of these. So.

• 9:48Speaker 01

  So this is an AI like notepad. So it can listen to your meeting and then write notes for you. But you can, it's very cool because it takes notes collaboratively with you. So you can write notes and then it fills them in. And if you want to restructure its notes as you go, you can do that.

• 10:08Speaker 01

  It's super cool. It's like an amazing, like human machine hybrid.

• 10:15Greg Isenberg?

  How do you use it?

• 10:16Speaker 01

  Very low crafted. I use it for a subset of my meetings. I don't like to have most of my meetings recorded, but I, I use it for like a subset of meetings and I take notes, usually stuff which is like, somebody's pitching a product or service or like a new partnership or something like that. And I'll take a bunch of notes and then share it with the team, you know, like as part of follow up. That's like my main use case.

• 10:42Greg Isenberg?

  It looks beautiful, just like, yeah, I played with a bunch of these apps and I don't know, they haven't really stuck with me, just because, you know, like you, I'm like, the product needs to be tight. So, but this, this looks worth trying.

• 10:59Speaker 01

  It's great. And then the third one is called gradient AI. There you go. Again, naming is hard, all these collisions. And so these guys are building amazing customer service agents that I don't know how much I can say, but they dramatically outperform, like, you know, Intercom has AI built in. These guys are dramatically outperforming Intercom in all of the, with all the customers that they have. They're early stage. I, I used to work with, well, most of the team at Monzo, which is like a neo-bank in the UK, the CEO, the three founders were on the data science team there. And they're brilliant.

• 11:44Speaker 01

  And they're building like, again, it's like a discreet, very focused, very tight thing that solves a very specific, very manual problem.

• 11:57Greg Isenberg?

  Have you seen Bland?

• 11:59Speaker 01

  No.

• 12:02Greg Isenberg?

  So.

• 12:05Speaker 01

  This is great.

• 12:06Greg Isenberg?

  Yeah, like, right? You look at it and it's like, so basically for people listening, not on YouTube, it's, it's for, it's AI phone calls, basically. And you, yeah, tell Bland your use case, sales, customer support, operations. It's in any language, which is crazy. And you can pick your voice, teach it like an employee. So there's intelligence there and it integrates with your tools. So you can like integrate it with Salesforce or whatever. I have a friend who.

• 12:43Greg Isenberg?

  Contacted a company like Bland and was like, I want to build the bland for Germany, for example, and making that country up.

• 12:52Speaker 01

  Yeah.

• 12:52Greg Isenberg?

  And I think that there's a huge opportunity in taking some of these businesses, partnering with them and being like, I'll just do your, you know, Canadian arm.

• 13:02Speaker 01

  Sure.

• 13:03Greg Isenberg?

  You know, people think, oh, that's so small. It's such a small way of thinking, but like,

• 13:09Greg Isenberg?

  you know, Well, Simple, which is the Robin Hood of Canada, is still like a three and a half billion dollar company, you know?

• 13:14Speaker 01

  For sure.

• 13:15Greg Isenberg?

  There's, there's, there's opportunity in geographies.

• 13:18Speaker 01

  Yeah, for sure. For sure. For sure. This is super cool. This is super cool. There's another one I invested in recently. It's a Y C company that is doing debt, AI debt collection, which I would have thought was like a terrible idea. I can't think of the name off the top of my head, but the way the guy explained it, which I thought was really amazing, was that they, like the best debt collectors on the phone are actually like deeply, that's it, Domu.

• 13:50Speaker 01

  Yeah, the fourth one, Domu, or the second one, yeah.

• 13:55Speaker 01

  They do sales and stuff too, but he's like, they're just like deeply empathetic and thoughtful. And they say things like, oh, well, you have a thou-, you owe a thousand dollars. Do you think you could afford to do a hundred dollars right now or a hundred and fifty dollars right now? And they're like, actually very kind. And it's hard to, it's hard to get that kind of kindness maybe consistently out of people and, but there's like an automatable script there and you can learn a lot.

• 14:23Speaker 01

  I think they're doing incredibly well, like incredibly well.

• 14:29Speaker 01

  And I just think, again, there's just like a million of these kind of tasks out there that either you experience as a consumer or a, or a company goes through that you can just like build a very highly customized AI engine around with a really tight feedback loop and just crush it.

• 14:50Greg Isenberg?

  Yeah. And you could, I mean, you could just open up, for example, Claude and say,

• 14:59Greg Isenberg?

  you know, list me all the pain points in social media management.

• 15:05Speaker 01

  Yeah.

• 15:10Greg Isenberg?

  Right? And it'll give you some ideas.

• 15:14Speaker 01

  Yeah.

• 15:18Greg Isenberg?

  So I'm just, you know, I'll just read a few. Content creation and scheduling, consistently producing engaging, high-quality content across multiple platforms, managing content collars and approval workflows, community management, so managing crisis communication, negative feedback, like each of these could be multiple agents.

• 15:36Speaker 01

  For sure. Creating platform-specific formats, I mean, you know, brilliant, like give it the assets and tell it to like pump out all the jams across all the platforms.

• 15:49Greg Isenberg?

  Right. And how do you think about, because I, you know, I know you've built consumer, like earlier in your career, you were really consumer, like you were Blip TV back in the day, which I think is now owned by Disney, Facebook, like can't get more consumer than that, you were at Facebook, I think, running their ads.

• 16:11Speaker 01

  I did a bunch, I did ads there and I did sharing, so like photos and video and everything, yeah.

• 16:16Greg Isenberg?

  Right, so how do you think, you know, that, yeah, how should people think about, should I build a B to C thing or a B to B thing?

• 16:26Speaker 01

  I'll tell you the way that I think about it is I think B to C is often like a bigger opportunity, can scale to be really massive, but go to market and finding product-market fit and then growing the thing is really, really hard and you have to catch lightning in a bottle and your odds of failure are much higher, the size of success could be larger, I mean, depending on what you choose to do, you know, so there you're optimizing for like high dynamic range and there are a lot of things that are like super difficult about it. I think B to B. You know, the dynamic range is not as large.

• 17:09Speaker 01

  Like, you can go to a person and say, hey, tell me about your problems. Okay, cool, I'm gonna build this thing that looks like this. If I do, and like, does this thing for you. And can you just tell me, if I do that, like, will you pay me for it? How much? And then you can like, go and talk to a hundred other people and get their views. Then you can like, build the thing that they tell you to build, as long as you're good at interviewing people. And sell it and make money. And it's great. It's amazing. And so I think that you can build like a, it's like a tighter range, if that makes sense. Like a tighter range of outcomes. You're less likely to fall, you know, face first and just like, face plant into the dirt.

• 17:52Speaker 01

  But you're also probably not gonna create like, a hundred billion dollar company in doing that, you know?

• 17:58Greg Isenberg?

  Totally.

• 17:58Speaker 01

  If you want to do that, you gotta go consumer, I think.

• 18:02Greg Isenberg?

  Totally. Consumers is more glory in consumer.

• 18:05Speaker 01

  Yeah.

• 18:05Greg Isenberg?

  Like, there's also something interesting about, like, hitting your face against the dirt, kinda like, it hurts, but it also feels nice in a way.

• 18:19Greg Isenberg?

  Like, people who do consumer are sick like that.

• 18:21Speaker 01

  Yeah.

• 18:22Greg Isenberg?

  You know what I mean?

• 18:23Speaker 01

  I do. You gotta iterate and iterate and iterate. I mean, I've been building this thing. We're trying to build like WhatsApp for money or a global Venmo, you know? We've been building for two and a half years, it's super difficult. You know, you iterate, you keep building, and then, you know, maybe you have a moment. We had a moment last week, we like, suddenly just went viral in Kenya, and our graph just went right angle, straight up. But you know, who knows whether or not that would have happened or not happened? And, you know, you just spend a lot of time, kind of like, trying to find that thing. And you may never find it.

• 18:58Greg Isenberg?

  A hundred percent. Okay, and going back to our AI agent world, so I think a lot of people listening to this, like, they wanna get their hands dirty. They see the opportunity, they're like, you know, we're sharing all these products. They're like, yes, yes, this is cool, this is cool. But they don't, they don't know.

• 19:20Greg Isenberg?

  Like, should I, should I build a granola competitor? Should I build on top of, you know, one of these platforms? Like, how, how should people think about what startup idea to pick? Like, do you have a framework for that? Like, why did you pick Sling versus the hundred other, you know?

• 19:38Speaker 01

  So I have a framework. It might be different than other people's framework. So my, the way that I ended up deciding to do this thing was I, I did this kind of like regret minimization exercise. So I imagined myself, I kind of like discovered this thing, right? Which is, I sent USDC on Solana from the UK to California and the transfer was instant and free. And everything else about it sucked, but I was like, oh, okay. Like, I know how to fix all those other things. And then, like, you suddenly realize, oh, wow, you can build like a global Venmo on top of this. You can build WhatsApp for Money on top of this. This could be huge. This could be a multi-billion user product. It's going to be really hard to build. You might fall flat on your face, you know?

• 20:22Speaker 01

  And so like, I've got three kids, you know? How is this gonna go? And so I imagined myself five or 10 years in the future and I imagined every possible, like, logic branch. So like, I don't do this. Somebody else does it and they succeed. How am I gonna feel? I'm gonna feel kind of shitty because that should, you know, I, I would have felt like, oh, that should have been me. I, I don't do it and somebody else does it and they fail. How am I gonna feel? Oh, well, I'm still gonna feel bad because I would always wonder whether or not I could have made it work. Okay. What if I do it and I fall flat on my face and I fail? How am I gonna feel? Well, you know what? The default in this thing is failure. Like, if you, if you try to build a really big consumer thing and you take a really big

• 21:07Speaker 01

  swing, you're gonna fail nine times out of 10, you know? So like, there's no shame in that. It'll be painful. It'll sting, but like you say, you know, there's also like a certain joy in it. And if I do it and it works, it's gonna be great. And so like I, you know, and it's an idea that I deeply care about. It's a thing that I think is like really important for the world. I think if everyone in the world can like send money to everyone else in the world instantly and like for free or almost for free, like that's a transformative thing that will literally change the world. And so it also feels like a worthwhile endeavor. Like it feels like a nice thing to spend, you know, three to 10 years of your life on, right?

• 21:47Speaker 01

  And which I think is really important because like if it were just like, you know, selling like candy or like food coloring that like causes cancer or whatever, or like, you know, plastic clothing, I think that even if it worked, I would feel really shitty about myself. And so that I think really truly matters a lot, at least to me. I like to find meaning in my work, you know, positive meaning in my work. And I, so I, that's how I ended up doing this. And I've worked on food delivery. I've worked on banking. I've worked on, you know, social media sharing. I've worked on advertising.

• 22:30Speaker 01

  I think you can kind of like, you know, when we worked on ads, like, you know, a lot of people were like, advertising is bad. And we were like, no, no, no, no, no. Advertising is good because it helps connect people who are building a valuable thing with people who need that thing as efficiently as possible. And that's actually like a service which makes the world a better place, you know? And I think you can think about a lot of things in a way that, you know, creates value and doesn't destroy value. The question is whether or not you're going to enjoy it, whether or not you're going to love it, whether or not you're going to get up every morning and, and want to work on it for maybe a long time.

• 23:07Greg Isenberg?

  Yeah. And I think, I think that, that last part is probably the most important part. When I look back at all the products I worked on, the best, the most successful products were the products that I

• 23:21Greg Isenberg?

  I cared about the most, even though I didn't have high expectations that it was actually going to work out. The ones that I actually was like, oh my God, there's a huge market opportunity here and like, I'm going to sell it to Adobe and I'm like trying to time something. That hasn't worked out for me personally. Quick ad break. Let me tell you about a business I invested in. It's called boringmarketing.com. So a few years ago, I met this group of people that were some of the best SEO experts in the world. They were behind getting some of the biggest companies found on Google. And the secret sauce is they've got a set of technology and AI that could help you outrank

• 24:06Greg Isenberg?

  your competition. So for my own businesses, I wanted that. I didn't want to have to rely on Mark Zuckerberg. I didn't want to depend on ads to drive customers to my businesses. I wanted to rank high in Google. That's why I like SEO and that's why I use boringmarketing.com and that's why I invested in it. They're so confident in their approach that they offer a 30 day sprint with 100% money back guarantee. Who does that nowadays? So check it out. Highly recommend boringmarketing.com.

• 24:35Speaker 01

  Yeah, I feel you, man. I think that like, I'm not the sort of person, other people may be like this, maybe, you know, like, I'm just not the sort of person who is like good at that kind of like, I don't know, like mercenary business thing where it's like, oh, I see a lot of people with dirty cars around. I want to build a car wash. It's just like not the way that I think about things. Like I think about like wanting to create new things or like interesting puzzles or gifts that you can give people or whatever and joy you can get from the work. I get bored. Otherwise, you know, it's just like not interesting. Like, oh, you know, sure, maybe it's a nice way of making some money, but like ultimately, who cares?

• 25:20Greg Isenberg?

  In AI startup land and also in financial services, it's an extremely competitive space, right? Your smartest people in the world are going after this space. How much do you, as a product person, think about competition? And like when you're, when you're building out your product roadmap, are you like mapping it to how the competitors work? How should people think about it?

• 25:44Speaker 01

  Not directly, but I do think that like there was a point in my career when I felt really bad about copying anything. I was like, oh, no, you have to come up with everything yourself. And like, I no longer believe that at all. Like, I think there are just certain primitives or certain ideas that become commonplace and like should be replicated by everyone. And you have to be like, you know, it's like impossible that you're going to come up with all of those yourself. And so it's like a big world, you know. And so I think you have to watch what all your competitors are doing and other people in adjacent spaces. And when they do something really great or something really brilliant, be like, oh, okay, like, we missed that, or we shouldn't prioritize that earlier.

• 26:29Speaker 01

  All right, well, let's do that. And I, and the way that I think about that now is like, these are just primitives. Like, if somebody had said, well, I'm not willing to copy the wheel, that would be really stupid. Like, if the only person who could ever produce a wheel is like the person who originally conceived of it, we would all just be in the dark ages, you know. So I think that you have to kind of like, look around and see what all the smart people are doing and have a deep respect for competition and the noise around you. While, and this is so important, and I'm curious your view on this, right, is like, while not getting pulled in a million directions, you still have

• 27:11Speaker 01

  to be true to your vision and the thing that you want to see created in the world. And you, you know, you can't just be like, oh, oh, that's a shiny thing over there. It seems to be doing well. Let's change what we're doing and change the thing that we want to exist in the world because of that. And it's a balance. And I, you know, I struggle with that balance all the time of like, oh, well, there are a million things I want to build. How do I pick the two? That are like the most important and true to what we're trying to accomplish. You know?

• 27:39Greg Isenberg?

  Yeah, I mean, I agree. I think it's like, like everything in life, balance is really important. And the way I think about it is, I do keep tabs on competition. And I, I don't have a running list of what the competitors are doing, but I have a mental running list. Like, I literally do. In my head, I'm like, competitor X is doing Y. I look at their, their Twitter accounts. I follow them on Twitter. And, but I, I try not to get sucked in with, oh, my God, they just launched this thing. It's really smart. And then, because you don't want to be a me too.

• 28:20Greg Isenberg?

  Product builder.

• 28:22Speaker 01

  For sure. For sure. Yeah. Yeah. And I think that you have to have a consistent narrative and a consistent, like a consistent narrative internally and externally. And, and in yourself as a human about what you're building and what you're trying to accomplish too.

• 28:37Greg Isenberg?

  A hundred percent. Okay. And, you know, you said you went, you're going viral in, in Kenya, like, you know, how, how do you think about, you know, once you've built the product, getting people to the actual product? You know, is, and I know, and I know you, you've, you know, with, with Facebook, I mean, you, you attracted millions or hundreds of millions of people to the, to the platform directly or indirectly. Is this, you know, if you're trying to build an AI startup, let's say, you know, do you go and like we've done, you know, you, you, you, you map out the, the problem, you build a landing page, you know?

• 29:18Greg Isenberg?

  Like, how, how do you think about, you know, you build a product? How do you think about getting people to the actual product?

• 29:24Speaker 01

  Yeah, yeah. Well, I, I think like, I mean, I used to work on ads and I, I, think that there was probably a golden age in which the answer would have been like, you know, target exactly the right message at exactly the right people on Facebook, find the like 3,400 people who are your early adopters. And just like get it in front of them 15 times. I'm not sure that's the thing anymore.

• 29:47Speaker 01

  I think that the auction has gotten saturated and tracking has become worse and like all that kind of stuff. I think that like, You know, Twitter and LinkedIn and podcasts and everything are probably the way to do it. And I think, you know, the way that we've done it so far is just to kind of like build, build in public, sort of. I think that probably means like a specific thing where you know, like the letters are capitalized or whatever. But we've just been like, from the very earliest time we could, we introduced the product, we, we kind of like shipped it with a waitlist. And then people would come to us and be like, oh, can I try it? Or our friends would ask to try it and we'd let them in and then we'd get their feedback. And sometimes it was really

• 30:28Speaker 01

  broken. And like, even now, people ask me, like, when did you launch? And I'm like, I don't know. Like, what do you even mean by launch? I don't know what that means. You know, do you mean like the first time we were at an app store? Do you mean when we started to remove waitlists? Do you mean when like, you know, something happened and we were in a bunch of WhatsApp groups and went viral? Cause we've been in some stage of that thing in a bunch of places around the world for like a year and a half, two years now. And the company's only two and a half years old. We've been talking about it. We've been posting screenshots and animations and finding our people around the world who are like interested

• 31:06Speaker 01

  in it and like helping them find us. So that like, before we went viral in Kenya, we had like a few hundred people there who loved the product already. And like my co-founder went down to Nairobi and gave a talk at a conference and, and it all happened kind of like when he was down there and a couple of other people from the team. And there were people at the conference coming up to him and being like, I'm so proud of you. Like, I feel like I built this thing with you, you know, like I'm like, couldn't happen to a better product or whatever, you know? And they, they like, I think, you know, felt like they helped us build it and hopefully they continue to feel that way because we

• 31:47Speaker 01

  kind of found each other as we were creating this thing. And I, I now think that that's like the way. And I, I think even like the presidential election, like the US presidential election kind of shows that too. Like, you know, the difference between running a bunch of ads the old fashioned way versus like being out there and mixing it up in, you know, Online native forums in an interactive way, just like a huge difference.

• 32:15Greg Isenberg?

  Hundred percent, hundred percent. Yeah, I started thinking about short form video and how do you like reverse engineer the viral TikTok? So building for mobile specifically or AI startup, like thinking about, okay, I need to give something to this group of micro influencers that is going to get them to create a 30 second or 15 second clip that is, you know, going to go viral. So what is that product? And then reverse engineering that? That's been really helpful in terms of like creating an AI startup that gets like millions of views and downloads.

• 32:59Speaker 01

  Yeah, I think that totally works. And, you know, it all depends on who your audience is, like who you're trying to reach and what you're trying to do. A bunch of them are going to be on TikTok and like, you know, that's a great way to get them into the funnel. And you can just like watch the top 10 clips at any given time and be like, okay, I'm going to like emulate this format. I know that the algorithm likes this right now. And I know a lot of people who are really successful at doing that right now. If you want to target like techie people, you probably want to do it on Twitter, X. If you want to target salespeople, you probably want to do it on LinkedIn, you know, bike it just, you know, and there's a format and there's a way of thinking and a way of talking and a way of interacting, which is like native

• 33:42Speaker 01

  to those platforms. And you have to behave that way to be successful on them.

• 33:47Greg Isenberg?

  Okay, I want to end on, I think I'm going to name this episode, something around like the framework for starting an AI startup. So we've covered, we've covered kind of ideas and coming up with ideas. We covered some really cool startups, like granola and how they're doing it. We covered user acquisition, we've covered competition. What haven't we covered that we should?

• 34:12Speaker 01

  Pricing, monetization, how you make money.

• 34:14Greg Isenberg?

  Yeah.

• 34:16Speaker 01

  It's important.

• 34:17Greg Isenberg?

  Oh, yeah.

• 34:18Speaker 01

  The first thing I'll say is that one of my favorite lines about this is, I think it's originally Walt Disney quote, which is, "We don't make movies to make money, we make money to make more movies." And Facebook co-opted this, and it's in the Little Red Book, you know, which is, "We don't make services to make money, we make money to make better services." And I really believe that the most successful companies in the world have that view. I think that you can build an incredibly successful company that makes you millions of dollars that does not have that view. You know, that's kind of like the more mercenary approach, but you kind of need to decide who you are

• 34:56Speaker 01

  before you start with your pricing strategy.

• 35:00Speaker 01

  But putting that aside for a moment, I think you just, with an AI company, it feels really clear to me that you look at the number, the amount of human input that you're saving and the cost of that human input. And I mean total cost, I mean salary, emotional damage that you have to sustain in doing the work, you know, all of that stuff. And by the way, those two things are very important because like, you know, some things in the world are really, really annoying, but only take like five or 10 minutes. But if you automate them away, I'll pay more than the time saved because of the emotional damage you're saving me or the frustration that you're saving me, right? So you have to kind of like apply that lens or that adjustment factor. And then, and then I think you just apply a discount.

• 35:44Speaker 01

  Like, okay, like I just saved you $100,000 worth of labor, $50,000 worth of emotional damage, 150 grand. Okay, it's a machine doing it, so I'm going to price that at a 75% discount or a 50% discount or an 80% discount.

• 36:05Greg Isenberg?

  Yeah, and that makes it like a no brainer offer, which is kind of the goal, right?

• 36:10Speaker 01

  I think so.

• 36:11Greg Isenberg?

  Yeah.

• 36:11Speaker 01

  And maybe you could do, maybe you get away with an 80% discount. I don't know, sorry, a 20% discount, charge 80%. I don't know, but I assume it isn't that bad to do 50.

• 36:22Greg Isenberg?

  Are you of the belief to start, you know, you can, you know, people say you can always go down on price? You can never go up? What's your thought on, on, on that?

• 36:31Speaker 01

  I believe you can go up, but I think you need to be thoughtful about it. So when I was working at Monzo, which is like a big neo-bank in the UK, we had a, we had a bunch of problems. I mean, one was that we were a regulated bank and people didn't think of us as a bank. So you're, you have the, you have all the downside of being a bank with none of the upside.

• 36:53Speaker 01

  And another problem was that we just didn't charge quite enough money. Like, we didn't have enough things that made money. And that was kind of okay before COVID. But then our number one revenue stream was actually people using their debit cards overseas and the interchange you get from that, and that went away overnight. And we were totally screwed.

• 37:11Speaker 01

  And I remember spending weeks on a spreadsheet with the finance team going through every line item. And we knew that we had a gap that we had to fill, trying to figure out how to fill the gap. And we were terrified of what was going to happen when we started charging for like, you know, your fourth ATM withdrawal and what was going to happen when we started charging for replacement cards? And, you know, we had a list of things.

• 37:37Speaker 01

  It was totally fine.

• 37:40Speaker 01

  It was completely fine. Nobody cared. People loved the product. Like, maybe a few people complained or whatever, but like, honestly, like, everybody just thought it was really fair. And they were like, oh, we've been getting this thing basically for free this whole time and we really appreciate it. And yeah, okay, that seems cool. Like, if I use the ATM for a third time, I'll, I'll pay a little fee, you know? And that has really stuck with me, like, that lesson. Like, if you build a thing which is like beautiful and people love and has a place in their lives, you can charge more for it later. And

• 38:16Speaker 01

  You know, that goes against conventional wisdom. And I think if you have that knowledge,

• 38:22Speaker 01

  it's a secret weapon because it's easier to get distribution for something that costs less.

• 38:27Greg Isenberg?

  Yeah. And there's, I mean, I remember Uber, for example, like when we first started using Uber in Uber and Lyft and SF when it first came out, it was like, well, not the black cars, but it was, it was cheap. Like, I remember, you know, they basically got us hooked on the product. And we, once we were hooked and we were in the network, then we're like, okay, you know, they were like, okay, let's see if we can charge 10% more, 20% more, 30% more. I think customers, customers don't remember your, your pricing. They remember the value, right?

• 38:59Speaker 01

  I agree.

• 39:00Greg Isenberg?

  Yeah.

• 39:01Speaker 01

  I agree. That's exactly right. And if you create great value, you can then find the efficient frontier of your pricing over time.

• 39:08Greg Isenberg?

  That's it. And probably use AI to help figure that out, too.

• 39:11Speaker 01

  For sure. For sure.

• 39:15Speaker 01

  Absolutely.

• 39:15Greg Isenberg?

  Okay. Okay. What I just have to ask, I know, I know, you know, before we leave, I know you spent some time with Mark Zuckerberg. What do you, what do you think Mark Zuckerberg is thinking about with AI and this whole AI world? Does he, you know? Yeah. What's going through his mind?

• 39:34Speaker 01

  I don't know. I mean, I think that he's one of the smartest, most determined, most principled people I know, you know, and deeply thoughtful. And he has a quality very few people have, which is, you know, he's also kind of fearless, you know, he like, once he makes a decision about a thing, you know, he kind of goes all in while still being open to input on the other side, you know, he's, I guess what I'm saying is he's very good at what he does.

• 40:02Speaker 01

  I think that the strategy that they have right now of like open sourcing a bunch of models, you know, makes a ton of sense. It's like the right strategic move. If you're in their position,

• 40:14Speaker 01

  you're kind of like salting the earth in a, in a pretty meaningful way, you know, giving everybody access to this thing instead of so that it's no longer a war between like two or three or four titans. It's just like, okay, we're all in this together, you know?

• 40:30Speaker 01

  It's very smart.

• 40:34Speaker 01

  And we'll see. I think it's going to become, I think that one of the really significant advantages that Facebook has, and again, this is one of the reasons why distributing the models in this way makes so much sense, is, you know, Facebook has one of the largest permissioned training sets in the world. It's not clear whether or not OpenAI really can train on all of the things that they train on. There's a really great clip, I think, of their former CTO, you know, being asked about whether or not they trained on YouTube. And, you know, she just goes like, oh, you know, like, the face that she makes. And like, you know, Facebook actually has the right to like, you know, has just like

• 41:17Speaker 01

  a giant content library. So I think that there's a lot of stuff that they're doing, which, you know, takes real account of like, what are our strengths and what are our weaknesses as an organization here? All right, let's change the landscape around us to favor us with our set of advantages. And, you know, I, I think it, you know, they're doing a very good job at it. A very good friend of mine is actually running Generative AI, Generative AI there now, who I think is totally brilliant.

• 41:53Greg Isenberg?

  Cool.

• 41:54Speaker 01

  Yeah.

• 41:55Greg Isenberg?

  Mike, thanks for coming on. People, if you enjoyed this episode, please like, comment, subscribe. So, so we know that you enjoy this type of stuff, you know? So I'll see you in the comment section. Mike, where could people get to know you better?

• 42:14Speaker 01

  My website is H U D A C K dot com, U D A C K dot com, and I'm M U D A C K on Twitter, and sling dot money.

• 42:22Greg Isenberg?

  Sling dot money. We'll include both those in the description. And yeah, go check it out. Hope you learned something valuable. I know you did. And Mike, I'll see you, I'll see you soon.

• 42:35Speaker 01

  Sounds good. Thanks, Greg.

• 42:37Greg Isenberg?

  Thank you.

• 42:38Speaker 01

  Bye.

• 42:39Greg Isenberg?

  Cheers.